What would be the difference if a law firm were asked to submit a rolling budget on a sizeable matter at the end of each month? The budget would extend perhaps as far out as six months – longer than a typical budget covers – but this would be a Bayesian budget in that changes in circumstances would affect the probabilities (See my posts of Jan. 20, 2006 and June 16, 2007 about Bayesian statistics.). If each month the budget were accompanied by an explanation for why the overall budget has changed, the rolling analysis would be informative for in-house counsel for the immediate matter and for matters like it in the future.
With monthly revisions, there might be more chance for the inside managers to change activities and costs. The frequent revisiting of the budget would keep both the law firm and departmental lawyers conscious of costs and their drivers. The rolling budgets would also encourage roughly contemporaneous discussions of strategy and tactics.