The Ethics of Legal Project...

Project Management for Lawyers 2015

The Ethics of Legal Project Management

January 22, 2015

4:15 Session

2 PLI: Project Management for Lawyers | January 22, 2015 | The Ethics of Legal Project Management

PANELISTS

Aileen Leventon President

and Founder

Robert L. Denby Senior Vice President -

Loss Prevention

David A. Rueff, Jr. Shareholder and Legal Project

Management Officer


Agenda

1.Introductions

2.Evolution of malpractice claims

3. Malpractice and ethics rules and overlaps

4. How LPM helps lawyers avoid malpractice and

complements ethical obligations

5. Relevant LPM tools: Scoping the Work

6.Q&A


Evolution of malpractice claims


Overview of ALAS Services

The

ALAS

Perspective

220+

firms

58,000+

lawyers

35 years’

experience

13,000+

claims


Where Do ALAS Claims Come From?

* Includes corporate, securities, banking, tax/ERISA, and real estate

Frequency

Litigation

39%

Transactional*

43%

Other

18%

Data as of 11/30/2013


Mistakes Conflicts of

Interest Unworthy

Clients

Problematic

Lawyer

Behavior

Common Themes


Mistakes Are On the Rise


12 Major Claims

4 Major Claims 3 Major Claims 6 Major Claims

69 Claims

32 Claims

21 Claims 19 Claims

0

10

20

30

40

50

60

70

80

Mistakes Conflicts of Interest Problematic Lawyers Unworthy Clients

of which

of which

We included claims in multiple categories if more than one type of act drove the loss (e.g., a claim involving a mistake and a conflict).

Blue column represents claims that received $500k or more in reserves during fiscal 2013.

Major” claims were claims to which we posted $5M or more during fiscal 2013.

2013: Top 99 Claims by Type of Problem


Mistakes Come in Many Flavors


Recent Lawyer Mistakes

• Filing UCC papers in wrong

state

• Missing statutes of

limitations

• Dawdling with amended

pleadings

• Drafting documents that

don’t achieve goals

• Shooting from the hip

• Offering advice outside of

expertise


Underlying Causes of Mistakes

• Pace

• 24/7 accessibility

• Cost pressures

• Reduced staffing

• Technology

• Increased specialization

• Lack of personal interactions


Distinction between malpractice

and ethics rules and overlaps


ABA Model Rules

Rule Title Project Component

CLIENT-LAWYER RELATIONSHIP

1.0 "Confirmed in writing" Communication

1.0 "Informed consent" Communication

1.0 "Writing" or "written" Communication

1.1 Competence Quality

1.2 Scope of Representation and Allocation of Authority

Between Client and Lawyer Scope

1.3 Diligence Quality

1.4 Communication Communication

1.5 Fees Budgeting, Scope, Communication

1.6 Confidentiality of Information Communication

LAW FIRMS and ASSOCIATIONS

5.1 Responsibilities of Partners, Managers, And

Supervisory Lawyers Communication

5.3 Responsibilities Regarding Nonlawyer Assistance Communication

INFORMATION ABOUT LEGAL SERVICES

7.1 Communications Concerning a Lawyer's Services Communication

7.4 Communication of Fields of Practice and Specialization Project Management generally


ABA Model Rule 1.2

Scope of Representation and Allocation of Authority

Between Client and Lawyer

(a) Subject to paragraphs (c) and (d), a lawyer shall abide by a client's decisions

concerning the objectives of representation and, as required by Rule 1.4, shall consult

with the client as to the means by which they are to be pursued. A lawyer may take

such action on behalf of the client as is impliedly authorized to carry out the

representation. A lawyer shall abide by a client's decision whether to settle a

matter. In a criminal case, the lawyer shall abide by the client's decision, after

consultation with the lawyer, as to a plea to be entered, whether to waive jury trial and

whether the client will testify. (b) A lawyer's representation of a client, including

representation by appointment, does not constitute an endorsement of the client's

political, economic, social or moral views or activities. (c) A lawyer may limit the

scope of the representation if the limitation is reasonable under the

circumstances and the client gives informed consent. (d) A lawyer shall not

counsel a client to engage, or assist a client, in conduct that the lawyer knows is

criminal or fraudulent, but a lawyer may discuss the legal consequences of any

proposed course of conduct with a client and may counsel or assist a client to make a

good faith effort to determine the validity, scope, meaning or application of the law.


ABA Model Rule 1.0 (e): Informed Consent

(e) "Informed consent" denotes the agreement by a person to a

proposed course of conduct after the lawyer has communicated

adequate information and explanation about the material risks of and

reasonably available alternatives to the proposed course of conduct.


ABA Model Rule 1.0 (b) and (n)

“Confirmed in writing”

(b) "Confirmed in writing," when used in reference to the informed consent of a

person, denotes informed consent that is given in writing by the person or a writing

that a lawyer promptly transmits to the person confirming an oral informed consent.

See paragraph (e) for the definition of "informed consent." If it is not feasible to obtain

or transmit the writing at the time the person gives informed consent, then the lawyer

must obtain or transmit it within a reasonable time thereafter.

“Writing” or “written”

(n) "Writing" or "written" denotes a tangible or electronic record of a communication

or representation, including handwriting, typewriting, printing, photostating,

photography, audio or videorecording, and electronic communications. A "signed"

writing includes an electronic sound, symbol or process attached to or logically

associated with a writing and executed or adopted by a person with the intent to sign

the writing.


ABA Model Rule 1.4: Communication

(a) A lawyer shall:

(1) promptly inform the client of any decision or circumstance with respect

to which the client's informed consent, as defined in Rule 1.0(e), is

required by these Rules;

(2) reasonably consult with the client about the means by which the client's

objectives are to be accomplished;

(3) keep the client reasonably informed about the status of the matter;

(4) promptly comply with reasonable requests for information; and

(5) consult with the client about any relevant limitation on the lawyer's conduct

when the lawyer knows that the client expects assistance not permitted by

the Rules of Professional Conduct or other law.

(b) A lawyer shall explain a matter to the extent reasonably necessary to

permit the client to make informed decisions regarding the representation.


ABA Model Rule 1.5 : Fees / Budgeting

(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an

unreasonable amount for expenses. The factors to be considered in determining the reasonableness of

a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions

involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to

the client, that the acceptance of the particular employment will preclude other employment by the

lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount

involved and the results obtained; (5) the time limitations imposed by the client or by the

circumstances; (6) the nature and length of the professional relationship with the client; (7) the

experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether

the fee is fixed or contingent. (b) The scope of the representation and the basis or rate of the fee

and expenses for which the client will be responsible shall be communicated to the client,

preferably in writing, before or within a reasonable time after commencing the representation, except

when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in

the basis or rate of the fee or expenses shall also be communicated to the client. (c) A fee may

be contingent on the outcome of the matter for which the service is rendered, except in a matter in

which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be

in a writing signed by the client and shall state the method by which the fee is to be determined,

including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial

or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses

are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify

the client of any expenses for which the client will be liable whether or not the client is the prevailing

party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written

statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the

client and the method of its determination..


ABA Model Rule 1.5: Fees and Budgeting (Detail)

(a) A lawyer shall not make an agreement for, charge, or collect an

unreasonable fee or an unreasonable amount for expenses. The factors

to be considered in determining the reasonableness of a fee include the

following:

(1) the time and labor required, the novelty and difficulty of the questions

involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the

particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances; (6)

the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing

the services; and (8) whether the fee is fixed or contingent.


ABA Model Rule 1.5: Fees / Budgeting (Detail continued)

(b) The scope of the representation and the basis or rate of the fee and

expenses for which the client will be responsible shall be

communicated to the client, preferably in writing, before or within a

reasonable time after commencing the representation, except when the

lawyer will charge a regularly represented client on the same basis or rate.

Any changes in the basis or rate of the fee or expenses shall also be

communicated to the client.


How LPM helps lawyers avoid

malpractice and complements

ethical obligations


ABA Model Rules LPM component

Rule Title Project Component

CLIENT-LAWYER RELATIONSHIP

1.0 "Confirmed in writing" Communication

1.0 "Informed consent" Communication

1.0 "Writing" or "written" Communication

1.1 Competence Quality

1.2 Scope of Representation and Allocation of Authority

Between Client and Lawyer Scope

1.3 Diligence Quality

1.4 Communication Communication

1.5 Fees Budgeting, Scope, Communication

1.6 Confidentiality of Information Communication

LAW FIRMS and ASSOCIATIONS

5.1 Responsibilities of Partners, Managers, And

Supervisory Lawyers Communication

5.3 Responsibilities Regarding Nonlawyer Assistance Communication

INFORMATION ABOUT LEGAL SERVICES

7.1 Communications Concerning a Lawyer's Services Communication

7.4 Communication of Fields of Practice and Specialization Project Management generally


Relevant LPM Tools:

Scoping the Work


Clarification of assumptions / risks

Identification of Assumptions

• Factual Assumptions: regarding the facts of the matter which if proved untrue could result in

expansion of the scope and additional tasks to be performed

• Procedural or Strategic Assumptions: regarding the opposing parties litigation or negotiation

tactics which are factored into the tasks to be performed and the time estimates provided

Risk Registers

Factors that may be encountered and how they can be minimized. The objective is to provide a

description of the risk, quantify it (in terms of probability) and identify actions that can be taken to

minimize the risk


Stakeholder identification and defining requirements

Identification of Stakeholders

• All Stakeholders should be identified to confirm that the scope includes all client objectives.

• This information is captured and shared with the team and should also include:

o Inside Counsel

o Business Department Representatives

o Third Parties

o Vendors

o Opposing Parties

o Opposing Counsel


Communication plans

• Reporting requirements

• Scheduled meetings versus hap hazard

conferences

• Publication of billing guidelines

• Clarification of reporting timelines and

methods (30 days or less)

• Secure access to Project Plan, Schedule,

Budget, Team Calendars and Matter Status

• Calendars capture major milestones or

deadlines in the case

• Case Notes allow team members to summarize

progress and to avoid duplication of work which

can result from starts and stops in the

engagement.

Clarification of communication requirements before work begins


Reliable estimates and budgets to support fee proposals

Development of a budget for the current matter or group of matters

• Set constraints (not an AFA, but

reasonable estimates for the

engagement)

• Evaluate historical information

for more reliable estimates;

• Integration of all costs related to

a matter (local counsel,

expenses); and

• Phase / Task codes meet E-

Billing requirements.

• Budget to actual reconciliation

o Identifies original budget

allocations by phase, task,

timekeeper

o Real time comparison by

daily time entry


Questions


Thank You!

Aileen Leventon President

and Founder

QLex Consulting Inc.

(917) 860-7043

[email protected]

Robert L. Denby Senior Vice President -

Loss Prevention

ALAS

(312) 697-6900

[email protected]

David A. Rueff, Jr. Shareholder and Legal Project

Management Officer

Baker Donelson

(601) 351-2469

[email protected]

The Ethics of Legal Project...

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