Lean law - Lean methodology and legal teams

GCs and Heads of Legal know their teams need to provide excellent legal advice, a first class service and demonstrate how these provide value to their organisation.

Lean is a business methodology that was developed to improve productivity. It originated in manufacturing but has since been adopted by other sectors, including in the delivery of professional services. 

What is Lean?

In the 1980s, companies such as Motorola and GE adopted the highly effective manufacturing processes developed by Toyota and other Japanese companies with the intention of improving productivity, profitability and competitiveness.

A key principle was the elimination of waste in the production process. Over the years, a number of variations on the theme have been developed, such as Six Sigma, Lean Six Sigma, Just-in-Time and TQM (Total Quality Management).

Although Lean encompasses different methodologies, the underlying principle is continuous improvement. This requires the elimination of waste or inefficiencies in a business process so as to provide increased client satisfaction, profitability and value.

Process

The starting point is to identify the process. In manufacturing, the stages of production are usually clearly defined. For legal services, though, the process may not always be so clear.

The legal team will advise a range of in-house ‘clients’ in different contexts. But whether it’s drafting or reviewing contract wordings, advising on an acquisition or running a dispute, it is possible to break the process down into the different stages when a lawyer is involved (and how).

This process map will also usefully include those stages when there is no legal involvement. This enables the GC and others to understand the ‘pinch’ points in the process, particularly those where there is increased risk of errors occurring or where, say, bottlenecks arise.

While there are tools available to help with process mapping, it’s fundamentally about identifying the steps involved in progressing a business task or project from initiation to finalisation.

Process mapping can be illuminating as it requires those involved to think about what they do, how they do it and why. This can provide a useful challenge to accepted ways of doing things as well as data on how resources and technology are deployed and whether work is being carried out at the right level of expertise.

Eliminating inefficiency (waste)

Having identified the process, the next step is to clarify where improvements can be made. Lean methodologies focus on eliminating waste, which they typically categorise as:

• Mistakes/errors. This is about looking at where errors can arise and why. For example, in the context of legal work, errors may arise in the form of missed deadlines or drafting errors, perhaps caused by a lack of research or workflow tools, expertise or supervision;
• Overproduction. This may occur where there is too much process relative to the activity and risk, for example where too many people are involved in a review and sign-off process or where too many lawyers are providing advice;
• Delay. This may occur, for example, where there are bottlenecks in the process or where time is used inefficiently, say where project meetings are routinely late or postponed;
• Non-utilised talent. An example of this is where legal work is not being done at the appropriate level because of a lack of resource planning – say where a senior lawyer is routinely handling work that could be delegated to a junior colleague. Or where lawyers are carrying out non-legal activities that could be done by a specialist non-lawyer;
• Transportation. This could cover where technology is not being used to speed up the delivery of work – say where electronic delivery and review tools are under-utilised; and
• Extra processing. Similar to over production but may also cover processes that include unnecessary steps, or stages that add little or no overall value.

Other categories of waste sometimes referred to are:

• Inventory – usually meaning work-in-progress and workflow in legal teams. Typically covers aspects of inefficient workflow; and
• Motion – an example here is where necessary information is poorly stored and takes too long to retrieve.

Continuous improvement

Central to Lean methodology, this is a way of identifying opportunities to streamline and reduce waste. Typically, a four-stage process is employed.

1. Identify opportunities for improvement. In analysing a particular process it may be obvious where inefficiencies arise and where the process can be improved. Alternatively, it may be necessary to analyse relevant data and to seek feedback from the lawyers involved and the client so there is agreement on what needs to change. An important factor here is the quality of the data being analysed. This emphasises the need to capture information relevant to the value of the service and its improvement. In other words, it focuses on measures that matter to the client and that identify (and measure) realistic improvements. Examples may include accuracy, speed, cost, ROI and client satisfaction, among others.
2. Plan for improvements to the process. Having identified and agreed on improvements, the lawyers and the client (and perhaps other stakeholders) will agree on how these will be made and how improvements will be measured.
3. Implementation. Putting the agreed changes in place.
4. Sustaining change. It’s important to review the changes made with all interested parties so that feedback can be obtained and analysed and further improvements made as required. There are various ways this can be done, such as regular reviews with the client, analysis of relevant performance metrics and client satisfaction feedback.

People

People are at the heart of Lean thinking in two ways.

First, the purpose is to deliver better value to the client. In the context of legal services, the client is the organisation but, in practical terms, services are provided to its managers and other staff. As poor processes waste effort and resources, they consequently fail to deliver best value to the client, hence, the need to build in continuous improvement.

Second, legal services are provided by lawyers. In eliminating inefficiency it’s therefore important to look at a range of ‘people’ factors that determine how things can be changed for the benefit of the client.

Factors here include:

• Deployment – are lawyers, with the right level of skills and expertise, being used where they have most impact? This may not be the case, for example, if highly skilled lawyers are spending too much time on matters that could be delegated to less experienced lawyers, or even dealt with outside the legal team;
• Skills – is there the right balance of skills across the legal team and does the team have the skills the client needs? These may be legal skills but could also include business acumen or interpersonal skills. And is there the right balance between the skills needed to deliver legal advice and back office skills needed to run the department?
• Technology – many in-house teams would love to buy in more technological solutions, but that's not always possible. However, are existing solutions being used to their full potential? For example, existing technology may have been identified as an important part of delivering better client solutions, but may be still be under-utilised;
• Management – plays an important role in high performing teams that look to improve what they do for the benefit of their clients. Poor management is wasteful as it holds people back, increases turnover of staff and undermines commitment. Good management cannot be taken for granted (a good lawyer is not necessarily a good manager) and there needs to be a commitment from individuals and the organisation to develop excellent management skills. Many organisations have extensive training programmes in place, of course, and these should be as open to lawyers as to anyone else;
• Culture – as well as a commitment to improving the service the legal team provides, achieving high standards of performance also requires a strong commitment to learning and development, delegation, trust, support, inclusion and diversity. The culture of the team (or teams) is the bedrock on which client service is built; and
• Understanding the role. While Lean is concerned with client value, for in-house lawyers this is wider than just providing a higher quality, faster, solutions-based service to various clients across the organisation. This is because a lawyer owes professional obligations to the organisation and beyond. It's therefore important that the lawyer's role from the GC down is mapped out as far as possible. This is so that the organisation’s management and the lawyers all understand where the distinctions lie in practice between the lawyer as a business partner and the lawyer as a business guardian. 

Take-aways

1. Lean can be a very useful methodology for improving the quality of legal services and increasing the value of legal to the client. 
2. It recognises that legal services involve processes that can be broken down, analysed and improved upon as part of an ongoing cycle. 
3. It’s important to work with good data (collected under KPIs, for example) that capture and represent what is valuable to the client. 
4. Process is important and so are people. Improving client value (as determined) requires high performing, well-managed legal teams with the right mix of skills and culture. 

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