The purpose of the recent second edition of the Legal Ombudsman’s Guidance on Good Costs Practice is to encourage solicitors to be clearer, more precise and more transparent when discussing the likely costs of legal matters with their clients.
This guidance is needed as 13% of complaints received by the Legal Ombudsman during 2018 – 2019 relate to poor information about legal costs to clients.
The Legal Ombudsman is an agency of redress for individuals, but as we all know dissatisfaction with cost estimates and communications is not limited to the consumer legal market.
Tips and Tools
In this post I will dive a little deeper than the Legal Ombudsman. Focusing on a few aspects of the Legal Ombudsman’s report for illustrative purposes, I will provide some tips and explain some tools which help deliver a good cost service to clients.
As you will see, some of the tips are from my colleagues at the International Institute of Legal Project Management (IILPM).
All IILPM approved legal project management training courses cover areas such as scoping, estimating, communicating and managing variances. The need for lawyers to adopt and apply these skills were highlighted by the Legal Ombudsman’s report.
Everyone attending IILPM legal project management certification courses also receives a set of IILPM approved templates. The templates have been designed with the needs of busy legal service professionals in mind.
Straightforward to use and distributed in widely available formats (Microsoft Word and Excel) the templates are real time-savers. They also act as a baseline for good practical implementation of legal project management.
Users can (and are encouraged to) amend and adapt the templates so they more precisely fit their particular circumstances.
The need for clear communications
The need for clear and consistent communications is a theme running throughout the Legal Ombudsman’s report.
Communicating clearly to potential clients about costs (and other issues) is essential. An obvious point to make but as the Legal Ombudsman’s report shows, many solicitors still do not do this properly.
I have used this well-known quote of George Bernard Shaw’s before where he said
The biggest single problem with communication is the illusion that it has taken place.
I am sure we have all suffered the effects of this illusion at some time.
Communication is a two way process. A fundamental aspect of successful communications is allowing the other person enough time to tell their story.
Clients of all kinds have their stories to tell: what their issues are, how they came about, why they feel they need help from a lawyer.
Lawyers need to listen, understand and acknowledge these stories at the outset. This is not just a nice thing to do. It is essential for scoping matters properly.
The need for continued communications
Being clearer about costs at matter outset is just the beginning.
The Legal Ombudsman noted that
many complaints arise because lawyers have not updated the customer [client] about the cost of the case as it progresses.
A fundamental aspect of project management is the setting up of a communications plan. In terms of messaging, this plan will outline the type of communication to be sent to clients (and other stakeholders), its frequency and content.
If a simple communications plan is followed then lawyers will keep their clients updated about costs and other points of interest regularly throughout matter progress.
The IILPM templates assist with stakeholder analysis (vital for effective communications) and communication planning. Creating a communication schedule, and sticking to it, is a hallmark of a competent project manager.
Providing initial estimates
The Legal Ombudsman recognises that ‘it is not easy to provide precise cost estimates at the outset’.
A dictionary definition of ‘estimate’ is ‘an approximate judgement or calculation’ of something.
I think it a pity the Legal Ombudsman used ‘precision’ in the context of estimates as this is often, with good reason, a red rag to lawyers.
The aim should be to arrive at initial estimates which are reasonable, understandable and based on a sound method of some sort.
Lawyers providing estimates will have experience of managing similar matters previously. They will also have data in their practice management system (including time records) to help give them some guidance.
So long as lawyers take time to explain clearly to clients the basis of their estimates, the factors considered in arriving at their estimates and their confidence level in the estimate they should be OK.
As an easy start, simple 3-point estimates could form the basis for initial estimates and client discussions.
Providing more detailed estimates
I think more lawyers should get into the habit of breaking work down into smaller units to the level of discrete tasks.
Smaller units are easier to estimate in terms of what work needs to be done to complete the task, the level of skill and experience required to complete the task and how long it will take to complete the task.
The classic project management tool for doing this is called a Work Breakdown Structure (WBS).
The IILPM provides its students with a WBS template. The WBS template can also be used as a tracking tool too, with space for tracking the amount of work completed and cost accrued to date.
During IILPM courses we show our students how to complete the WBS template properly and place it in the context of other project management tools and practices.
Managing changes (variations)
The Legal Ombudsman also finds that some lawyers do not keep clients informed about options open to them in light of changes which occur during matter progress.
Different options will usually have different cost implications for clients. The Legal Ombudsman says that solicitors should present clients with a cost-benefit analysis of the potential legal options available to them at any one point in time.
Change (or variation) control is another fundamental aspect of good project management.
At the very least a log recording all changes which have cost implications should be kept. The impact of any changes, especially if they are deemed significant, should be discussed with the client and other key stakeholders. After such discussions agreement can be reached about what course of action should be taken in response to any changes.
As I am sure you will have guessed by now, change control (variation management) is also discussed at some length on IILPM courses and templates are provided to help manage change (including communicating the effects of any change).
There is more to the Legal Ombudsman’s report that I have outlined here.
My reading of it is that lawyers of all kinds are able to provide a better cost service to their clients by applying some well-known principles of legal project management.
Lawyers find applying these principles easier when they understand the context of their application. The IILPM 4-Phase LPM Framework helps with this.
The principles become easier to translate into practice when there are clear processes in place supported by easy to use tools such as the IILPM templates.
We can take you through legal project management principles, methods, processes, tools and much more besides.