Kaizen for Law Firms

What is Kaizen?

For some people, it doesn’t seem possible that Kaizen or it’s better known sibling Six Sigma can help them in their profession. In manufacturing, sure, or technology or healthcare, but not every industry.

As it turns out, however, Kaizen actually can help make improvements in just about every line of business. That includes those who make a living arguing in courtrooms.

The drivers behind law firms using Kaizen are the same drivers behind every business that applies Kaizen methodology: increased efficiency for the business and increased value for the customer.

Global law firm Clifford Chance so believes in process improvement that they quote legendary statistician W. Edwards Deming in a report they produced on the issue:

“If you can’t describe what you are doing as a process, you don’t know what you are doing.”

How Kaizen Works

Like any other industry, law firms face challenges in reducing costs, increasing efficiency and delivering the best product possible to clients.

Kaizen, which simply means “change for better,” is a daily practice, that goes beyond simple productivity improvement. It is also a practice that, when done correctly

• Humanizes the workplace
• Eliminates overerly hard work
• Teaches people how to perform experimental improvements on their work
• Spot and eliminate waste in the work place.

In all the process suggests that a humanized approach to workers and to increasing productivity, is most successful when it nurtures the company’s people. Successful implementation requires the participation of workers in the process of improvement. Everyone from the CEO to the janitor participates in Kaizen.

Isn’t That Really Project Management?

People sometimes think Kaizen and Six Sigma are project management methodologies, but project management activities requires knowing what needs to be done, when it needs to be done, and by whom. Process improvement, whether via Kaizen or other techniques, is about delivering value in a more efficient way and focuses on the voice of the client.

Why Should Law Firms Care?

With the increasing demand for predictability in pricing, transparency in the processes, and sharing the risks via fixed-fee or other alternate billing arrangements (other than hourly), any methods that can help firms achieve these goals should be of interest. Six Sigma goals include:

• reducing the length of time to complete a process
• reducing costs
• increasing customer satisfaction
• increasing profits

Sounds great, but due to the mammoth complexity, time and initial costs in adopting such programs, many law firms just don’t seem to have the gumption to endure such a rigorous endeavor. This is where Lean Six Sigma (LSS) comes in to play.

The Kaizen Methodology

Kaizen uses PDCA as its framework for eliminating waste when analyzing a process. PDCA stands for:

• Plan—What does the client want? What is the problem?
• Do—How will we work with the client to get from A to Z?
• Check—How can we improve the current workflow process? Are there areas where efficiency gains can be made?
• Act—Create a new process map; implement a new plan; find ways to keep people “on the map.”

Using Process Maps

A process map (think flow chart) is a common tool to lay out an existing process so it can be better understood, and ultimately improved. Creating a process map is at least a two-step process. In the first pass, the map would describe a process as you think it is. In reality, what you think it is and what it really is are likely to diverge. The process mapping exercise will likely expose these details, and offer opportunities for streamlining.

The second version of the process map will describe how that matter should be run. Using the before and after versions of a process map, especially if you include time estimates for each task, will help you articulate to your client the improvements being made, as well as justify the ROI in the effort. A full-blown Kaizen endeavor can be a large commitment financially. These costs are recouped in theory by resulting in happier clients leading to more work being awarded, more profitable AFAs, and so forth. Willingness to make such an investment of course presumes your firm really does believe that offering properly priced work is ideal!

Expected Benefits

There are areas where firms can leverage Lean methodology. While opportunities vary depending on the law firm and the cases involved, they typically begin in one of three places.

• Senior partners who know the details of a firm’s operations and who also have years of feedback from clients
• Shifting market expectations cause a client to reevaluate the time and cost involved in completing a transaction
• Junior lawyers and others who work day-to-day in certain areas identify situations where time and money are wasted

With its emphasis on measuring value rather than time, Kaizen is one way to deliver more to clients for less. It aligns client and lawyer interests. Firms that adopt it can expect to see:

• Better collaboration between clients and firms
• Enhanced focus on value and quality
• Improved ability to offer AFA’s with confidence (pricing accuracy)
• Lower overhead/costs yet greater profit
• Faster response and turnaround times
• Increased productivity with fewer resources
• Freeing up of valuable resources that can take on other work
• Increased client satisfaction

Summary

From a birds-eye view, Kaizen sounds reasonably simple, but you will likely need some outside help to get started. There are a number of consultants who can help with the cultural change needed as well as the training itself. And at some point you will need to find ways to improve client satisfaction and offer better pricing regardless of methodology, or you are sure to lose business in the future.

— This article was adapted from its original form by members of CMark Group and originally appeared on the ThomsonReuters.com website, written by Lisa Glanakos, of Pillsbury, Whitman, Shaw, and Pitman, LLP, of Washington DC.