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Practice Innovations - Managing in a changing legal environment
Gray Rule
March 2013 | VOLUME 14, NUMBER 2
Gray Rule
Process Improvement and the Legal Work Product
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IN THIS ISSUE:
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»Process Improvement and the Legal Work Product
»Rescuing Distressed Litigation With Legal Project Management
»Organizational Project Management for Law Firms
»The Intersection of Knowledge and Legal Project Management
»Have it Your Way: Unique Approaches to Law Firm LPM Training
»Research Services Management: Strategic Sense?
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Silvia L. Coulter, Principal, LawVision Group, Boston, MA
Process Improvement and the Legal Work Product
Employing process improvement methodology will help a law firm to be better—to deliver a higher quality legal work product supported by efficient internal operations. Client loyalty will increase in response to these strategies.

The hot topic of recent years, and heating up even more across law firms now, is legal project management (LPM). There are live training programs, online programs, webinars, seminars, and articles on the topic. Improving how projects are managed is certainly a worthwhile effort. Once clients began pushing back on legal fees, and lawyers began responding with discounts, blended rates, project pricing, and other alternative pricing structures, it became obvious to all of us that employing effective project management techniques to manage these pricing promises was critical. LPM is not the answer though. Yes, LPM is a critical component of the overall process of delivering a quality product at an agreed-upon price and timeframe. There's more though. If the process underlying the work product you are delivering is not efficient and the pricing is not appropriate, then LPM simply lets you manage an inefficient process more efficiently but has not necessarily led you to improving inefficiencies and maximizing profitability. Let's take a step back from LPM and explore the root of effectively pricing services using legal process improvement. And remember, LPM is very important, but it is a management tool that comes later on.

Some Quick Background on Process
Improvement

There are several routes to process improvement. One of the most popular methodologies is Lean Sigma, based on Motorola's Six Sigma. As Wikipedia defines it: "The term 'six sigma process' comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, practically no items will fail to meet specifications. This is based on the calculation method employed in process capability studies." Apply this to legal work and you could have as a goal, only one typo in 6 million words. People don't hire law firms to receive documents with errors. They want them to be perfect. Or, if we were focusing on the operations side of the firm, the billing process in a firm should be the same for all practitioners across the offices of the firm, thereby reducing error, increasing throughput, and ultimately improving collections and realization. By examining, deconstructing and reconstructing processes, these processes become more efficient and, over time, may save the firm a lot of money.

So, very simply put, process improvement methodology teaches how to deconstruct a process (e.g., the M&A process, the securities litigation process, the time and billing process), to examine all the steps in the process, and the related tasks and variables in those steps, and then to reconstruct the model to be most efficient. When deconstructed, a legal work process model can be examined more closely to determine costs. How much does each area of this process cost in terms of partner time, associate time, paralegal time, and other people or hard cost resources? Once we know costs (including variable costs), we can better price the work product and ultimately better manage the project. To learn more about process improvement, Google names like W. Edwards Deming, Dennis Snow, Six Sigma, Malcolm Baldrige, Michael Bremer, and Kaizen to name a few. The literature ranges from highly technical to practical and easily understood.

Why Focus on Process Improvement and
Why Now?

In short, employing process improvement methodology will help a law firm to be better—to deliver a higher quality legal work product supported by efficient internal operations. Client loyalty will increase in response to these strategies.

Most firms believe they deliver a high quality legal product. Their websites promise quality, excellence, and client service. To be honest though, most firms do nothing to measure their performance along these lines. And many firms would admit behind closed doors that there is certainly room for improvement on all fronts—legal work product, lawyer service attributes, and client focus. The new world of legal services is changing very quickly, and to stay profitable and competitive, firms must examine the way in which they create and deliver their legal work product, and ultimately how they service the clients.

The good news is that process improvement can start with any practice area and does not have to be top down at a firm. Of course, if leadership at the top, including office and practice leaders, are all onboard with the strategic initiative, that is the best of all worlds and a firm will move more quickly in the right direction. In the interest of moving forward, do not hesitate to initiate a process improvement project within a practice if the practice leader and team are ready, willing, and able to make this happen. News about success spreads quickly in firms, and now is always the right time to improve processes and service. There are some excellent examples from firms that have embarked on the process improvement path.

One example presented at the Mortgage Bankers Association:

For a thorough view of this particular example, you may see the entire presentation at:

http://www.mortgagebankers.org/files/conferences/2007/2007
techconference/5ApplicationofLeanSixSigma-RichardSabat.pdf

Another example of the deconstruction of the legal work process for IP Litigation:

Seyfarth Shaw is one firm that has approached process improvement in an effective, efficient, top down manner. The firm transformed its culture using a Lean Sigma approach. By visiting their website and clicking on "About Us," you can read more. The firm has gained status with American Corporate Counsel members and has been applauded for its hard work to deliver efficiently, on time, at agreed prices. The firm has made a significant commitment and investment in adapting this strategy. Poised to compete in a mature and highly competitive legal industry, the payoff will be significant.

What's It Take to Make This All Happen?

There is a lot to process improvement and to committing to this new strategic direction. It takes a team to make it happen. Leadership, commitment, resources, and experience, including knowledge managers (library/KM), statisticians and analytics (finance), and databases (technology) are all part of this important strategy. At some point, the client weighs in on all of this as well. Often referred to as "VOC," or voice of the client, input from the buyers is a crucial part of the process improvement equation. Process improvement projects may begin from any seat in the firm. A support department or a legal practice department may decide to examine work processes and select a few on which to focus. The emphasis is on start. Get going now to realize the benefits down the road.

Select a legal work project. There are thousands across firms and the two examples above are representative of others. Assemble a team of five to seven members who will focus on the task and who are the XXX Process Improvement Team. You may want to have a few of these teams around the firm. Begin by setting a meeting schedule so the team members meet regularly and keep the project moving forward. Identify the goals and any other resources the team may require (such as adjunct team members who can provide input).

Next, create a flow chart showing the current process. List all associated tasks. Identify all relevant documents related to the process. Invite people who are part of the process to a team meeting to provide their input about what areas could be improved and what is working well. Review each step and agree on the updated process step, a final set of documents from which everyone will work/draft, costs associated with the time for each step (note: this can be difficult to assess since historically individuals enter time differently), how time should be captured in the system, all the way through to the deliverable the client receives. In one firm this flow chart of current process and improved process was a 12-foot long diagram! A firm may have many process teams up and running at once reviewing and improving various processes around the firm. This usually happens once the firm has many managers/leaders who have been trained in the methodology and can oversee and manage these projects.

The Speed Bumps along the Road to Process
Improvement

"But," some have argued, "I make my money by billing time. Why would I want to change this process and become more efficient?" This is a question we have heard over and over by highly sophisticated practitioners. The answer is simple: improve the process, take time and waste out of the process, and ultimately increase throughput, do more of the same, create a blue print for success. This is not easy to do. Processes are easy enough to examine and improve, but people and emotions often prevent firms from operating at the highest levels of performance. Once a leadership decision has been made that the firm is adopting a strategy that will support service excellence and improved client service, work on a few small projects will show immediate success. As one senior leader said, "Not everyone will jump aboard this train, but when it's leaving the station, they will be left behind."

Once efficient processes are in place, effectively managing these processes and projects by people trained in legal project management will ensure that they stay efficient. The good news is for those firms eager to put their teams to work to create competitive advantage through process improvement and to manage through process management. They will win the race and be far ahead of their competitors.

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