Deconstruction and reconstruction of a legal matter? Anatomy of a legal matter? What does any of that even mean? It turns out there is a familiar term for it. It's called legal process improvement. How does it impact pricing? In a word—significantly!
First, it's important to understand what legal process improvement is. It's a methodology and a "toolkit" that helps you:
- Analyze how a work process is currently being done (i.e., map out a current approach),
- Identify steps in the process which could be done differently or not at all (i.e., identify those steps considered to be "value add" to the client and those that are not),
- Determine and map an alternative approach based on assessing the current state, and
- Control and manage to the new process so that anticipated results are achieved.
Legal process improvement helps determine the best way to carry out a work process to achieve efficiency, excellent quality of work and service, high probability of successful outcomes, and predictability. It's true that historically lawyers have not been paid to be efficient. They were paid primarily for their legal expertise, but the primary measurement tool, billable hours, encouraged inefficiency. In today's legal market, law firm clients expect their lawyers to be efficient and to deliver high quality at the same time.
It should go without saying that understanding how that work is getting done (i.e., understanding the component parts and what it takes to get them done) and determining how to do it more efficiently will enable one to price that legal matter more accurately. Legal process improvement will help one identify those pieces of a legal matter that could be completed by the lowest cost staff possible or through the use of technology.
Today, the most innovative firms are using technology solutions to map, measure, and speed workflow processes in response to client pressure to reduce cost. They are developing robust and user-friendly client collaboration platforms, advanced mobile technology applications, and sophisticated knowledge management systems that store, aggregate, and anticipate a lawyer's or a team's document and information management needs. Some representative metrics they're watching include a change in cycle time (i.e., total time from the beginning to the end of your process, as defined by your client), reduced cost over time, and improved outcomes on a collection of matters.
Delivering value to your clients at the right price should be the driving force behind your choices.
The following case study, an excerpt from the forthcoming book from the American Bar Association, The Power of Legal Project Management – A Practical Handbook, highlights the successful use of legal process improvement techniques of an AmLaw 100 firm, Seyfarth Shaw. Seyfarth is recognized for its pioneering use of legal process improvement (aka Lean Six Sigma) for the delivery of legal services.
Managing a Large Portfolio of ERISA Litigation
Seyfarth Shaw has managed a national portfolio of routine benefits litigation to help a global insurer achieve its goals for consistency and value across each matter. The firm has a longstanding relationship with the client, but prior to 2012 the firm had never been involved with the client's routine benefits litigation portfolio. The opportunity arose when members of client's in-house legal team shared the issues the company confronted managing its large portfolio of litigation challenges to its denials of disability and life insurance benefits.
With significant investment, Seyfarth leveraged its unique approach to managing large portfolios and developed an innovative technological solution, called Portfolio Tracker, to help the client better manage and derive information from the portfolio. The firm enabled the client's in-house team to analyze macro- and micro-level data about cases and case trends that may have been left untapped by the sheer burden of managing case files the conventional way. To date, over 250 individual lawsuits have been or are being managed through this portfolio approach.
The law firm applies a pioneering use of Lean Six Sigma to its client service model for large portfolios, which allows the firm to create a highly effective, innovative, and integrated solution that builds and expands on its foundation of success. In collaboration with the client and attorney teams, members of the firm's Legal Project Management Office and Legal Technology Innovations Office created a solution that has delivered tremendous business value for the client.
Process improvement - Prior to being engaged for this work, a team developed a process map for managing these cases and has jointly (with the client) reengineered it to create greater efficiencies, eliminate waste, and reduce costs at the individual matter and portfolio level.
Technology - The law firm's client collaboration tool helps increase productivity and enhance communication and coordination, execution and delivery, and management and control of the engagement. The firm's technology serves as a knowledge and project management hub that captures documents, as well as issues process improvement ideas and responses, project plans and reports. Portfolio Tracker is housed within this tool. The firm also uses this platform to aggregate tasks, documents, and calendar entries across multiple matters. Templates, knowledge banks, and document automation are also part of the solution.
Automation - Many functions that were previously disparate and varied across matters and previous providers are now automated. The prior solution mandated manual case form reporting and no two forms were alike across various providers. Now, the law firm can automatically generate one consistent Case Assessment Form for any matter in the portfolio in a matter of seconds, using data captured in Portfolio Tracker.
Improved quality and consistency - Working closely with the client team, the firm created best in class documents and legal arguments and then took a standardized approach to their use where appropriate. For example, the firm worked closely to devise the best possible settlement agreement, which has now become the standard, facilitated by a template, rather than having a different agreement for each in-house counsel.
Continuous improvement – Lessons learned are continually discussed and improvements in the approach are continually made. In the first six months of the engagement, the firm held weekly calls devoted to lessons learned with the client. The firm's core team now continues to hold weekly meetings focused on process improvement, where they continually review the process map, use of templates, review trends, and discuss client feedback.
In summary, by deconstructing, mapping, managing, and analyzing a legal work process, a firm is better able to determine the cost of the work, and thus price it so the firm makes money and the client has a consistent deliverable for a fair price. The process discussed in the case study allows the lawyer to do more work for a lower price, yet ultimately increase revenues and profit.
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