Akasaka International Law, Patent & Accounting Office.

Legal Risks in Agile Development Projects 2 Estimation Phase

Apr 17, 2025UP!

Agile at the Estimation Stage

Communication Differences

Development teams and client users always communicate differently. Their expectations differ as well.

Developers create broad estimates balancing honest communication, technical explanations, and desire to win contracts.
Clients have vague ideas without documentation and seek estimates to establish budgets.

Budget Reality

Unless budgets include generous estimates, projects rarely succeed. Without buffers, projects tend to veer off course.
In most cases, projects include too many features, fail to create a Minimum Viable Product (MVP).
This often predetermines failure from the start.

Market Strategy

Minimum Viable Product

Bringing products to market quickly allows for early feedback on market fit.

“Many lose by trying to win big and cramming in too many features.”

Being first to market doesn’t guarantee success; often the second entrant who learns from the pioneer’s product and establishes a better strategy prevails.

Example: The competition between Fril and Mercari became about who could outmaneuver the other.

Prototype & Team Building

Creating prototypes efficiently while re-estimating costs helps developers and clients function better as a team.

Developers fail when they’re viewed merely as people who complete products.
Getting paid even small amounts to verify team compatibility is an important practice.

Work Effort Estimation

Estimation Timing

In agile methodologies, work effort estimation becomes a subsequent concern.

Users often don’t provide documentation until the kickstart phase.
In litigation, evidence of estimates and explanations are always necessary.

Documentation Best Practices

Records of interactions should be kept in:

Sprint backlogs
Product backlogs
Regular meetings
Meeting details should be documented thoroughly, clearly identifying decision-makers.

Key Takeaways

Early Boundary Setting

If disputes are inevitable, address them early. Time increases the likelihood of needing litigation for resolution.

Set clear expectations about when the basic design can be changed or when specification changes will trigger reassessment.

Expectation Management

Client expectations vary based on when estimates are produced and communicated. Early transparency is essential.

Clearly demonstrate that estimates will gradually change and extend as users incorporate more features.

Documentation Strategy

Evidence of one’s own shortcomings becomes protection for vendors and creates environments conducive to friendly teamwork.

Automate meeting minutes and clearly identify decision-makers to provide recourse during disputes.

Escalation Protocol

When users become overbearing, gather evidence promptly and escalate to higher-ranking individuals to prevent team burnout.

Early Estimation is Key

Provide work effort estimates as early as possible within feasible ranges. This is essential for managing expectations and avoiding disputes.

Success Formula

Team compatibility + Clear documentation + Minimalist approach = Successful Agile Projects

The notion of assembling high-quality engineers for successful operations is illusory; rather, successful client interactions often prevent project failures.

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