Time reporting in the Jackson era

The Legal Services Act has dominated the legal headlines lately and while it is the biggest fundamental change to the profession for a long time, it's not the only substantial change. Lord Justice Jackson's review of civil litigation costs has provided an entirely new framework for how costs are calculated and awarded. In particular, it introduces the notion that lawyers will have to prepare budgets for cases prior to trial. These budgets will need to be approved, as will variations to them throughout the case, otherwise awards will not be made.

This is a radical departure from the current working practice of settling costs after a case has concluded. It has implications for lawyers not only in terms of how they work, but also how they use technology to assist them. The new process can be broken down into four key stages; budgeting, recording, monitoring and reporting. Of the four, budgeting and monitoring will be concepts that lawyers have not grappled with much previously, but the ramification for technology runs throughout the process.

Lawyers use practice management systems (PMS) to record time, and related accounting information about clients and cases. Reports are generated from the ensuing data for billing, accounting, planning and other purposes. Most systems are set up to records in fairly limited ways, and a great many firms are likely to have to be adapted in order to function in accordance with the Jackson budgeting regime.

In particular the budgeting process introduces the notion of what I will refer to as phase and task information. Those of you familiar with UTBMS coding structures will recognise this concept, as they are also organised into phase and task structures. There is not much evidence on the adoption of UTBMS codes in the UK, but the chances are that those firms that have are likely to have an advantage when it comes to dealing with costs budgeting.

The Jackson report indicates 12 phases within a civil litigation case, and lawyers will be expected to budget for costs within each one, and monitor them accordingly. The upshot for technical departments in law firms is that they will have to modify their PMS systems to accept and use these new coding structures. This may be easier said than done for some systems, and the implication stretches beyond merely adjusting systems, as users will need to be trained in order to make best use of them.

Calculating budgets

In terms of budgeting for costs, another issue for lawyers to deal with is how to calculate budgets. The Jackson review provided a simple framework by way of a spreadsheet that firms can adapt and use, but this means manually keying information in. Of course the ideal scenario would be for PMS vendors to modify their products to include this element, and some already have. For those whose systems do not have this facility, a custom spreadsheet linked to PMS data is the likely way forward.

If the budgeting information is recoded into a PMS system, this gives the firm the opportunity to monitor against recorded costs without too much additional effort. Failing this, use of customised spreadsheets may be the answer.

Recording time is the relatively easy piece of the puzzle. Fee earners are already used to this concept and will need to adapt to the discipline of recording a new element (the phase), which in theory just adds a mouse click to the process.

The reporting phase will for most be a recalibration of the current output from their systems and should be fairly straightforward. Feeding it into the monitoring stage is likely to provide a slightly bigger challenge, but nothing too untoward.

Interaction

Of course the changes put forward by the Jackson review only affect those undertaking civil litigation cases, so many lawyers, and a number of firms, will remain unaffected. For those that are affected, a new type of software has sprung up to cope with the changes, and is now being marketed. It will be interesting to see what these software packages look like and how they can assist the process. For me, one of the most important aspects will be how they interact with PMS systems, where much of the base information is already stored.

There is another potential technical change for lawyers. A few years ago I wrote a column for Solicitors Journal on project management and why I thought lawyers should adopt some of the methods and technologies within the discipline. The Jackson report provides very strong hints that project management techniques will stand civil litigators in good stead under the new regime, and not surprisingly, at least one vendor has released a project management package for lawyers. Project managers are used to splitting large pieces of work into phases, and monitoring them, and use software to help them achieve this.

Jackson will force lawyers to adopt new techniques for budgeting and costing cases. If you haven't adopted your technology to assist with the process, you really need to think about doing so sooner rather than later. Mistakes in the new regime are likely to be expensive, and certainly more so than the costs of adapting existing software, or purchasing new.