Last week I posed the question, How can you build a budget before you know the work involved?

This is a question that “professional” project managers hate, and those in PMOs (project management offices) doubly detest it. They “know” the answer is that you can’t.

The reality is that clients demand you do so, and so the real answer is that you have to figure it out, do it to the best of your ability, providing a useful answer in an imperfect world.

In the corporate legal world in particular, clients have their own budgets, often set long before a given matter rears its head. They have to meet their budgets, so shrugging your shoulders and saying “we’ll bill you as we go along” is a less than satisfactory answer. Today, with budget pressure increasing at the same time as the corporate legal world becomes more complex, this type of non-answer answer is moving from “less than satisfactory” to “maybe we should take our business to someone who can.”

That’s not good for your long-term future. “We’ll charge you nothing because we’ll have dissolved as a firm” is, shall we say, itself a less than satisfactory answer.

I promised over the coming weeks summaries of five reasonable strategies, a few bad ideas, and one last risky strategy that sometimes may be worthwhile. To start fulfilling that promise, I offer the first strategy today.

(These strategies aren’t arranged in a particular order. One is not better than another; they are useful in different circumstances. Don’t read anything into their order of presentation in this series.)

Strategy 1: Work in Phases

Each project has stages — Initiation, Planning, Execution, and Delivery & Evaluation in my nomenclature. But projects can be broken into subprojects as well. Each of those projects will have the four stages. They may also overlap, whether two related but relatively independent subprojects running in parallel or doing Initiation on a later phase while the earlier phase is, say, in Execution.

Consider litigation. How many depositions will we be dealing with? How bad is the e-discovery mess? Are we likely to settle, or should we plan from the getgo to go to trial?

In most corporate litigation, there is a rhythm that often begins before a lawsuit is filed, whether you’re filing or responding. It’s much easier to come up with an estimate for this phase than for the matter as a whole. As part of this first phase, you can work with the client to build estimates for further phases, as together you learn how complex and how trial-likely the suit may be.

Phasing a project applies to areas besides litigation.

You can also lay out a range of options for phases after the first. Telling the client that it will cost her a million dollars to go to trial and deal with the inevitable appeals, and that it will also suck up an enormous amount of client business-side time in trial prep, can have an impact on the client’s willingness to settle.

Summary

Working — and budgeting — in phases allows you to do useful work and get paid even as you build a better picture of what might be coming down the road. It is useful in projects with significant uncertainty where that uncertainty will decrease dramatically as you move forward in the project.