BY FLORENCE ROSATI

Legal Counsel within a bank is critical to maintaining its commitments to clients, regulators, and shareholders. Banks are enabling legal functions to autonomously interact with external counsel and clients by providing legal advice that protects the firm’s financial well-being and reputation.  This also assists in the evaluation of risks associated with completing transactions and other activities across the bank.

The legal function is gradually demonstrating the need to collaborate with Project managers to elaborate methods to optimise relationships with law firms, abide to regulatory terms and monitor internal spend. Legal departments need to adopt project management principles in order to mitigate the risks a bank may encounter when coordinating client expectations, micro-manage regulatory requirements (ex. Structural Reform Program deadlines) and monitor costs due to constrained budgets. The internal counsel’s adversity to process-driven work streams dictates the need for project managers to ensure an efficient allocation of costs.

The implementation of Project Management principles

This can be achieved by applying the fundamental principles of Project management to complex legal matters. Technology is currently being revised to capture financial data, however the active involvement of Project managers in legal matters is fundamental.

Legal Project Managers have become facilitators and owners of the matter management process. This enables internal lawyers to concentrate purely on the legal case, whilst project managers quantitatively monitor the delivery of the legal service.

The aim of legal project management is to coordinate the matter against timelines, deadlines and budgets. The discipline of project management is characterised by the following phases:

  • Initiating
  • Planning
  • Controlling

Project management skills provide more structure around the work required for administering a particular matter. Project managers do not adhere to a “one-size fits all” tactic due to the nature of the specific matter being coordinated. Project manager involvement is beneficial as inefficiencies in the process are dynamically identified and addressed. As a result, specific financial information is provided to internal lawyers who are then able to determine whether external counsel has delivered within the time frames mutually agreed upon at the start of the project.  The most crucial element is defined by the bank’s lead lawyer and the law firm concurring with the results derived from the progression of the work.

The paramount phase: Planning

The planning phase is characterised by the assignment of “task codes” which label legal work by distinct activities required to accomplish the end result. The codes that are encompassed within the Uniform Task-Based Management System (UTBMS) assist with the categorisation of legal work and respective costs. The codes provide a platform for tracking the scope and the budget of a matter (ex. Case assessment, pre-trial pleadings, discovery, trial preparation) and historical data which allows the forecasting of future spend. Subsequently, Project managers monitor the work by following up on a task on regular time intervals or on pre-defined deadlines. The activity breakdown will display where the legal function is investing the most and give further insight as to the reasons behind reaching out for external advice, such as lack of internal capacity, or need for specific expertise.

Benefits and future developments

Banks are now assisting Project Managers by developing software to track accrued spend and formulate new budgets. The implementation of these specific tools will augment transparency between financial entities, regulators and clients, ultimately simplifying the granularity of legal work. Financial institutions are increasingly turning their attention to project management and agile frameworks to allocate spend and manage global economic pressures. Constrained costs, regulatory deadlines and internal counsel’s adversity to embrace flexibility in regards of legal matter management, promote the need to implement a solution that can identify bottlenecks and make incremental process improvements. As legal project management is a relatively new concept, the benefits generated by an accurate coordination of complex matters will gradually begin across the entire legal function in the near future.

References:

UTBMS.com ,(2016) Activity code UTMBS Standards