Implementing Lean Principles: Lean Six Sigma for Law Firms

Times are changing even for age-old institutions such as the legal industry. In the past, law firms would charge clients in terms of billable hours. Clients were forced to pay based on this arrangement no matter what or how long it took to close the case. But today’s consumer-market behavior is different. While billable hours have not been eradicated, clients have learned to treat legal services like any commodity or on-demand service. They have access to more information than ever before thanks to the help of technology.

More law firms are offering the same services and clients can’t help but compare based on the lowest cost. This has pushed and is continuously pushing law firms to adapt. Clients demand efficiency from these firms both on time and costs. What’s the response of the legal industry to this demand, you say? It’s the concept of Lean Six Sigma for law firms and legal project management as a whole

Legal Project Management

Project management is not a new concept. But it was not immediately seen or thought of to be applied outside traditional businesses like manufacturing. The concept was easy to imagine for the production of tangible goods. But soon after, we saw project management being applied to service-based businesses and knowledge work. But then again, they were still about “building something.” Like software development, for example. Though intangible, the process of developing software leads to a product. Though the requirements for each software or application may differ, at its core are processes that can be made efficient through the use of project management techniques.

What about legal cases then? Each case, or a legal matter to be more precise, are inherently complex. Hence, the requirements and delivery of legal services can vary from one legal matter to another. Yet if we look closely, we can treat legal services as any service-based business operating with a set of processes and procedures. When we think of it this way, law firms can use project management strategies and techniques to improve their legal practice, meet the demands of their clientele, and gain a competitive advantage.

Simply put, Legal Project Management is the application of project management concepts to the execution and management of legal matters. In the book, Legal Project Management in One Hour for Lawyers, Doug Richardson and Pam Woldow go into describing how the five process groups of project management as defined in the Project Management Body of Knowledge can be translated into the Five Steps of Legal Project Management.

Project management and process improvement work hand in hand. You can’t expect to manage a project properly if your process isn’t efficient. Though legal matters will be different from each other, we can recognize that how law firms manage them are repeatable. We can map out the process for managing legal matters. For example, for family law cases, it would more or less have a high-level workflow that includes these phases:

• Intake Proceedings
• Initial Pleadings
• Case Management Conference (ICMC)
• Discovery
• Temporary Relief
• Mediation
• Pre-trial
• Settlement/Order
• Trial
• Post-OrderClean Up

And within each phase, some processes or steps need to be done. For example, once a case gets scheduled for Mediation, some specific sub-steps need to be completed which include:

• Selecting a mediator
• Preparing a mediator brief
• Preparing exhibits of evidence

These are repeatable steps. And when you have a process that you can map out and there are repeatable steps performed, you can standardize and improve your process. You can use Lean Six Sigma tools to improve law firm operations.

Lean Six Sigma for Law Firms

Lean Six Sigma is one of the most popular process improvement methodologies. A fusion of both Lean and Six Sigma, this combined methodology enables businesses to achieve process efficiency consistently. Lean focuses on improving process flow and speed by eliminating wasteful activities. Six Sigma, on the other hand, focuses on controlling process variations and errors.

Together, Lean Six Sigma is a powerful technique for companies who want to create sustainable and scalable processes that adequately support business growth. If you want to learn more about Lean Six Sigma, you can read more on our Lean Six Sigma resource page.

In the context of legal services, applying Lean Six Sigma can help law firms stay competitive in the market. With clients refusing to accept to pay for legal services by the hour, more firms are forced to offer alternative fee schemes such as fixed-fee arrangements. Given this, law firms must find ways to deliver value on time and reduce their costs so that they can stay profitable. When it comes to cost-reduction in service-based businesses, more effort should be exerted on reviewing how the service is rendered. We assess how the process can be standardized and improved.

Using the concepts of Lean Six Sigma, law firms can eliminate wasteful activities and establish predictability in their process to deliver high levels of customer value while maintaining cost-efficiency. In Lean thinking, there is a concept called Muda or waste. More popularly known as the 7 Wastes of Lean, you can use the mnemonic “DOWNTIME” to easily remember it.

Process improvement starts with mapping out your process. You can use Lean tools such as Value Stream Mapping to do this. After that, you can analyze where your process encounters waste. As a team, decide whether each process step is necessary. Challenge the status quo and think of how to simplify your process so that work will flow smoothly and your team can work faster.

Once you streamline your process, the next step is to measure your process capability and performance. This is where Six Sigma comes into play. Questions like:

• How well are you meeting client requirements and expectations?
• Is your process fragmented or too complex?
• How long do you work on tasks?
• How are you optimizing your resources (e.g. costs, people, equipment, systems, etc.)?

Knowing these will help you narrow down which part of your process can be improved further. Here are some signs you can look out for when trying to optimize your process. Bottom line, Six Sigma is about reducing process variation to as minimum as possible. This allows you to establish predictability and consistency in your process.

Applying the principles of Lean Six Sigma will help you understand and plan how best to improve your process based on what’s valuable to your customers.

• Focus on the customer
• Understand how work is done
• Identify the root cause of your problem and focus on solving it
• Remove waste and non-value-adding steps
• Reduce defects by removing variation
• Communicate and collaborate with your team
• Be Flexible and Use Data to Drive Change

Value should be perceived from the eyes of the customer. Once you understand what value means for them, you can assess whether your work processes are geared towards delivering that value out the door.

Challenges in Implementing Lean Six Sigma for Law Firms

I believe that the biggest challenge you’ll meet when trying to implement Lean Six Sigma and Legal Project Management to your law firm will be resistance to change. Some people might not easily see the benefits of project management and process improvement if they’ve been doing something the same way for decades. While lawyers are not project managers, the concept can be learned and practiced. You might need to involve a legal project management professional to help your company in this mindset shift and establish a path for your company’s transformation.

Once you’ve established buy-in from your senior partners to your junior lawyers and staff, you can move as one organization in shaping a better future for your law firm. There may be more challenges along the way, like in determining how to streamline your process when no two legal matters are the same. But with the collective effort of all your partners, you can gather data and experiences from past cases handled and use that in charting a new and improved process for your legal services business.

Evolution of Legal Services Businesses

For law firms to stay competitive, there is no other way but to evolve. This evolution will require a change in mindset and a better understanding of what value means from the perspective of their clientele. If law firms want to broaden their portfolio, they must know how to meet client expectations and requirements through the bare minimum resources. Applying Lean Six Sigma enables law firms to do more for less. The legal services business is ripe for an overhaul. Project management and process improvement techniques will help law firms achieve higher levels of success and sustainability. If you’re thinking about whether it’s time for a transformation, I highly recommend you start now. Explore how Lean Six Sigma can help you shape the future of your law firm.