Legal project management and process improvement
Six Sigma and Lean have gotten a lot of headlines in the legal world as a result of Seyfarth Shaw’s highly publicized success in using them to streamline work. Both approaches originated in the world of manufacturing, and are examples of process improvement techniques which redesign the way work is performed to increase value and efficiency.
However, there has also been an enormous amount of confusion over exactly what these approaches require, and how they are related to each other, and to legal project management (LPM).
I became aware of the seriousness of this problem a few years ago when the Director of Professional Development at an AmLaw 100 firm asked me to explain the differences between project management, process improvement, Six Sigma, and Lean. This was an extremely sophisticated client who had been researching this area for months, but she had heard so many different claims from competing consultants that she had trouble keeping them straight.
I explained that Six Sigma is built around techniques Motorola developed to eliminate the causes of manufacturing defects and errors. Lean was developed by Toyota to increase manufacturing efficiency by eliminating the “seven wastes” (excess inventory, excess processing, overproduction, transportation, motion, waiting and defects). They are just two examples of a long list of process improvement methodologies used in other businesses, including business process re-engineering, total quality management (TQM) and ISO 9000.
In my new book, I explain how experts are still arguing about the definition of LPM, and we believe that there are many reasons to use this broad definition: “LPM adapts proven management techniques to the legal profession to help lawyers achieve their business goals, including increasing client value and protecting profitability.” Thus, we see LPM as an umbrella term that embraces a very wide range of management techniques. If a proven technique can help lawyers accomplish their goals, we say it is part of LPM.
If you accept this definition, process improvement, Six Sigma, and Lean are specialized approaches that fall under the more general umbrella term LPM. They are simply tools in the belt, to be used in some cases and ignored in others.
Others disagree and argue that process improvement is separate from LPM, and must come first. As one consulting company warns on their web page, “You can manage to perfection, produce exactly what you promised for your client, achieve each milestone on time and demonstrate excellence every step of the way. But what if you’re managing an inefficient process?… Legal project management doesn’t look at the efficiency of the steps in the project itself. What if you could get from A to B in fewer steps, in less time, with less waste, or by spending less money? Once you’re thinking like this, you’re thinking about process improvement.”
To date, only a few law firms have accepted the purist approach of focusing on process improvement before they implement other simpler and cheaper LPM tactics. Of the 108 law firms that responded to an ALM survey on LPM, only four said that they had worked with an approach “modeled after Six Sigma (e.g. Seyfarth’s Lean Sigma).”
This is not surprising, given that Seyfarth spent several million dollars and more than five years on this approach.
One reason process improvement requires so much effort is that you not only have to figure out how things should be changed in the ideal world, you also have to get lawyers to accept the new process and change their behavior. (For examples of an alternative approach to behavior change, download the free preview chapter from my book.)
It is human nature to want to do things your own way, and behavior change is a challenge in every profession. According to Carl Binder of The Performance Thinking Network, business process consultants often identify better ways to perform work but then they “can’t get the damned people to execute the process.” This is especially challenging in law firms, since compliance must sometimes be enforced by a powerful central management team, and many law firms don’t have a powerful central management team.
Process improvement clearly has a place in re-engineering the way some legal services are delivered, some of the time. It will be especially useful for the types of legal work that include “cookie cutter” steps. A careful examination of the steps in a repetitive work process can reveal opportunities to streamline and increase efficiency.
For example, when Morgan Lewis used process improvement analysis to improve the delivery of mortgage services, they began by identifying defects in the process that did not add value to the client, including excessive staffing, excessive drafting, and internal meetings. Then they analyzed the causes of these defects, and traced some of the problems back to poor data input, lack of standard high quality forms, lack of associate training, and disorganization related to time pressures. Finally, they developed a number of solutions including standard forms, standard operating procedures and standard communication procedures. These changes enabled Morgan Lewis to reduce the cost of delivering mortgage services “often by more than 25%.”
But that does not mean that process improvement is the best approach for every problem, and it does not mean that it must come before other LPM tactics. Arguing that you must fundamentally improve a process before you start to manage it is a little like saying that if you have a car that needs a paint job, you shouldn’t bother washing it. It’s a great example of the adage “perfect is the enemy of good.”
If a law firm has the time, the money, and the will to change the fundamental way they provide services, process improvement will certainly allow them to deliver more value. The question is: do you think that process improvement is the best way to deliver value in a particular situation?
This post was adapted from my new book Legal project management, pricing and alternative fee arrangements.