Budgeting is something that is not taught in law school.  As a result, there are too many lawyers who take the view that any given case or legal project will take whatever time it takes.  They view their work product as art more than science and that perspective tends to lead to cost overruns and unhappy clients.

To avoid unwanted legal bill surprises, it’s important to note that legal budgets are a function of business, not legal, needs.  That concept is of vital importance, so I’m going to say it again: legal budgets are a function of business needs.  It means lawyers must always keep the business goal in mind (see Contain legal costs, part 1) and clients must communicate those goals clearly. 

Focusing on the business goal accomplishes two things.  It makes the legal work results oriented, with less wheel spinning on “nice to know” projects.  It also assures the legal work is in sync with the client’s objectives.

Treating the legal budget process like an annual root canal is a recipe for disaster.  The secret to good budgeting is remembering that budgeting is a dynamic process.   Business needs change over time, either because of changes in the client’s strategic direction, or because of developments on the legal front that influence the client’s perceptions. 

Good communications and documentation are essential to bridging the gap created by that change.  It lets you collaborate and recalibrate.  It helps avoid disconnects and dissatisfaction.

This entry was posted on Saturday, January 24th, 2009 at 2:28 pm and is filed under Business Blind Spots, Communications, Costs, Decision Making, Lawyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.