It’s been almost a decade since Silicon Valley guru Marc Andreessen taught us ‘software is eating the world’. Around the same time Eric Ries published his bestseller The Lean Start-up, teaching entrepreneurs how to quickly iterate around concepts and value propositions to ship better products and services, faster.
People are experiencing rapid change in every aspect of their lives. Whether it being instant-banking, same-day delivery through Amazon, grabbing a ride with Uber or booking a last minute trip on Airbnb, we have all gotten used to information transparency and near instant service delivery.
Legal services delivery however is out of touch with client expectations. It hangs on to high cost, low transparency and slow service delivery practices. How to overcome these burdens without spending a fortune on technology? Let’s look into what lean thinking could mean for the industry.
Lean thinking was born out of studying the rise of the Toyota Motor Company from a bankrupt Japanese automaker in the early 1950s to today’s dominant global player. The premise of lean thinking is that by identifying and eliminating waste from business processes, the resulting enterprise will deliver more value at less expense while developing every employee’s confidence, competence and ability to work with others.
Key to succeeding in becoming a lean legal professional is to understand the lean methodology is a continuous process. It will require you to study your processes time and time again, making minor improvements to evaluate. The real challenge isn’t in understanding lean, rather it lies in persevering.
Processes vary greatly from lawyers to lawyers or company to company. By not following standardized internal processes, results tend to vary in cost, quality and time to completion. Lean thinking could help lawyers root out the errors, causing the waste associated with these inconsistencies.
TYPES OF WASTE
You can probably figure out the abundant or redundant steps in your own processes, but these 8 types should give you a good head-start.
1. Overproduction – Happens when you do to too much of something. For lawyers, it can be doing work that needs to be redone anyway.
All the work you put into reading the first draft of a new legislative proposal is time wasted since it’s bound to change along the course anyway.
2.Waiting – Obviously when you’re not busy doing something, you’re not generating billables. Same can be said for the resources you’re firm owns.
Spending time sending reminders for unpaid invoices is wasted time too. Oh and that ten slot parking lot which stands empty every weekend, rent it out.
3. Transportation – Any type of transportation is waste. The less you transport, the better. Not only does it cost time and money, it can also cause damage or you can misplace the item completely.
When was the last time you spend 30 minutes on finding back that one case? Why don’t find a postal solution in which you don’t have to move yourself?
4. Inappropriate or over-processing – Over-processing refers to inclusion of additional features, parts, processes, or other things that the customer does not need and hence is not willing to pay for.
Remember that time you reviewed an entire contract while the client only needed one clause checked? Your most senior partner on a pro bono case?
5. Inventory excess – Any kind of material you have but do not work on right now is a waste. You paid for it, but it merely sits around, has to be maintained, transported, and uses up space. Same goes for employees.
Still paying for that subscription you never use? Or holding on to those chairs which made the move from the previous office? Don’t waste time and space.
6. Unnecessary motion – Avoid unnecessary movements. Arrange everything so you have to move as little as necessary to do your job.
Why is there only one printer available in your 2 story office? Have you thought about digital file records which can be accessed from anywhere?
7.Defects – Having a direct impact on the bottom line, both quality and operational defects resulting in rework or idle time are a major cost.
What about that stapler that keeps on getting jammed? Replace it with a new one! That slow computer you’ve been doubting to replace? Low hanging fruits!
8. Not utilizing talent – Not or under-utilizing people’s’ talents, skills and knowledge can have a detrimental effect. Key solutions include empowering your employees, stop micromanaging and increase training.
The new trainee you hired mentioned his interest in start-ups when he applied for the job. However, you’ve not given him a single such case to deal with.
BEWARE OF THE PITFALLS
Introducing technology and automating elements without understanding the full current process can increase waste rather than remove it. If the current process is swift, efficient and works fine, don’t change it. Technology should only be a means to the end, not a goal in itself.
By rigorously rooting out waste and standardizing improved processes, the costs associated with implementing technology decrease. If you eliminate a step, you remove the need to automate or digitize it.
As greater efficiency should result in less billable hours, this exercise provides an ample opportunity for law firms to rethink the billable hour model and replace it with an alternative fee structure. For corporate legal departments the time savings will probably be offset by an increasing demand for a wider range of legal services.
Although clients might not yet be moving work away from traditional legal service providers en masse, they want their needs and expectations to be met. Failing to adapt to these changing expectations will force clients to move their work to other providers who will. After which it will be very hard to win them back.
A 4 STEP APPROACH TO APPLYING LEAN IN YOUR PRACTICE
In order to get your started with approach outlined above, you can use this 4 step approach.
In case you have any questions or suggestions, feel free to drop me a line!
1. Create a value stream map, showing inputs flowing through areas that add value until they reach the desired output.
E.g. a client delivers the necessary documents, after which the paralegal distributes them to a lawyer, who does his thing and checks with the client, which results in a signed contract
2. Identify bottlenecks in the the value stream flow and map out the processes used to mitigate those constraints in a process map (a flowchart showing each step of the process).
3. Gather data on how long each of the steps in the process map takes and what the associated success-ratio is.
4. Remove waste from the process by finding the optimal way to do something and standardize this procedure.
While it’s hard to objectively measure the quality, the bigger is issue clients are beginning to challenge lawyers on their high quality assertions. In order to stay ahead of the race, it’s important to be critical and overcome the pain in killing your darlings.