The Business of Law download-issue-7694.pdf

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3/52ILTA White PaperThe Business of Law4

6 CONTROLLING COSTS WITH LEGALPROJECT MANAGEMENT

by Steven B. Levy, LexicianLegal project management (LPM) helps attorneyssucceed with their projects in ways that go directlyto the rms bottom line or the departments P&L controlling costs, meeting schedules, managing risksand maintaining sanity while doing so. Our authorliterally wrote the book on this concept and shareshis knowledge.

14 BETTER DUE DILIGENCE THROUGH BETTERSEARCH TECHNOLOGIES:

by Liza Madden and Mike Safar,Autonomy iManageModern innovations in search technology can help tobroaden the due diligence associated with the conictssearch without overwhelming the existing processesor staff. These technologies increase the effectivenessof the conicts analyst and attorney evaluating newbusiness. The speed at which conicts are resolved andnew business is approved is ever more important.

18 PUTTING THE BUSINESS BACK INNEW BUSINESS INTAKE PROCESS

by Yuri Frayman, The Frayman GroupA series of colliding factors impacting law rmbusiness, including the rise of risk issues and thefall of the economy (and law rms), has created anopportunity for rms to transform new business andrisk-related IT cost centers into true competitiveadvantages. The result is a redened approach to newbusiness intake that is strategic, safe and fast.

24 LEAN SIX SIGMA: MASTERING THE OF SERVICE DELIVERY

by Lann Wasson, Husch Blackwell Sanders LLPWhile the healthcare and nancial servicesindustries have recently seen an explosion ofimplementations, the legal industry holds thedistinction of being one of the last service functionsto incorporate Lean Six Sigma concepts and tools.Today a number of factors indicate a growing interestin Lean Six Sigma within the legal industry.

THE BUSINESS OF LAW

In This Issue


4/52www.iltanet.org The Business of Law

While its hard to say anything nice aboutthe current economy, it has brought to light thenecessity of sound business practices to survive andprosper. And any area of a rm can be improved byexing its business-savvy muscles.

Our authors provide a broad spectrum ofexperience, knowledge and opinions that theyresharing in this white paper. We run the gamut,starting with improved new business intake andconict checks; we explore the art of good decision

making and Lean Six Sigma concepts; we look at

cost recovery vis--vis alternative fee arrangements;and more.

Many thanks to our writers for sharing theirsmarts theyre our Better Business Bureau!

Randi MayesEditor-In-Chief

6 GOOD RECORDS MANAGEMENTEQUALS GOOD BUSINESS

y Ganesh Vednerestablishing a records management program thatfocused on the proper storage and retentionrecords helps rms ensure compliance with

pplicable record retention laws/regulations andat they are meeting client expectations. Effectivecords management simply makes good business,

perational and nancial sense.

8 ARE ALTERNATIVE FEES THE DEATHKNELL FOR COST RECOVERY?

y John Gilbert, nQueue BillbackWhile it may seem that cost recovery and xed fees

e diametrically opposed We dont need toeep track of copies and faxes since we are nowlling for them as part of a xed fee in fact,

eeping careful track of these types of expenses isore necessary than ever. Find out how you can doe math!

42 SUCCESSFUL BUSINESSES ARE BUILGOOD DECISIONS

by Ayelette Robinson, Littler Mendelson P.C.Good decisions and good decision-making processeslie at the heart of every successful business. Ourauthor provides synopses of two books focused onthis subject. These publications tackle the often gnarlyprocesses of making good decisions and inuencingothers to make good decisions.

50 ONLINE COLLABORATION ENHANCEBUSINESS OPERATIONS ATNEXSEN PRUET

by Carlos Rodriguez, Nexsen Pruet, LLCWebinar technologies can be very powerful and cangreatly improve your rms collaboration efforts, notonly the traditional uses in the areas of marketingand education, but also to enhance practice andbusiness operations. See how one rm leverages thetechnology in all these areas with the ultimate goal ofdelivering better services to their clients.
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The rising tide of cost pressure islapping at the shores of law rmsand legal departments. Alternativefee arrangements (AFAs) representuncharted waters in which many rms

and clients fear potential reefs and shoalslurking just below the surface. Business-side clientswith increasing demands steer the ship one way, whileshrinking legal budgets pull it the other. How do legal

practitioners navigate not just a safe course but onethat speedily moves them in the right direction?

Legal project management (LPM) provides a verypractical route through potentially stormy seas. Itfeatures minimal process overhead; a low buzzwordquotient; and most of all, a set of techniques, tipsand tools that attorneys can apply to quickly takecontrol of their legal projects. The goal is not to turnattorneys into full-time project managers. Indeed, LPM

STEVEN B. LEVY LEXICIAN

Controlling Costs with LegalProject Management



orks well even for accidental project managers,uch as attorneys without formal project managementaining who step up, or are appointed, to run legalojects. LPM draws on and enhances the skillstorneys already possess. There are a lot of smartgal professionals, but long-term success will come toose who work smarter.

HOW LEGAL PROJECT MANAGEMENTS DIFFERENT

egal project management applies the provenoncepts of project management to the management

legal cases. It involves not the legal work itself bute mechanics of the work surrounding the practice ofw and the provision of legal services. LPM modiese actual project management techniques and

pproaches to t the legal world and its practitioners.Because many of the core teachings for managing

onstruction or IT projects have no legal analogs,aditional project management per se is a poor tr the legal environment. Especially at senior levels,torneys can present challenges for traditional projectanagers, as they are often resistant to rigid process

oundaries and limits on their actions.LPM is designed specically for attorneys rather

an for project managers. It takes into account theonstraints surrounding both the practice and the

usiness of law. Also, the

output

of legal work isgnicantly different from the output of standardoject management, e.g. , a construction project orece of software. The different output and differentocesses require notably different techniques.

Good legal project management is unobtrusive assupports attorneys in delivering higher client value.can improve efciency for in-house practices as wellrms.

THE GOALS OF LEGAL PROJECTMANAGEMENT Legal project management yields projectpredictability via principles that arestraightforward, practical and business-focused.

How can the members of a practice feelcondent about large xed-fee cases withoutfaith in their ability to control costs on thosecases? To succeed protably today, rms needto aggressively contain costs, respond to both

expected and unexpected events, and do onlythe work that truly delivers value to the client.The same holds for work taken on in-house,though the goal may be to do as much qualitywork as possible on a limited budget, rather thanprot. Either way, attorneys need to be able topredict costs, delivery dates and results.

AFA cases aren t the only type that benetfrom legal project management. Consider anycase where you want to accomplish one or moreof the following goals:

Control or better understand the cost

Control or predict the time spent

Be better prepared for unplanned events

Deliver only the work necessary to meet theclient s needs

Engage the most appropriate resources,assigning them the work best suited to them

Improve communication within the team andwith the client



LPM cannot solve these problems by itself. Rather,it positions its practitioners to take command of theseareas to deliver the highest possible value, benettingboth client and practice.

THE CORE TECHNIQUES OF LEGALPROJECT MANAGEMENTWhile LPM is a rich and complex subject, the centraltechniques are straightforward.

The First Stage: InitiationStart by building the project around the client sbusiness problem, which must be the rst thingyou identify and clarify. Most clients have business problems, even when they re presented as legalissues. By focusing on the business problem, youcan negotiate an effective goal or done statement,clarifying the two or three no more than that critical success factors that determine client satisfactionwith your work. Identify the stakeholders within thepractice as well as in the client s business, and, forrms, clarify the client s in-house legal representatives.Be particularly alert for high-inuence business-sidestakeholders who aren t in the foreground. Assess whocan inuence for better or worse the project andits actual and perceived success.

Above all, the legal team and the client must

agree on the

done

statement. Such agreementis a critical part of determining the conditions ofsatisfaction for the project. Be sure that the teamand the client concur on the project s scope. Use the done statement and establish a clear project visionto inoculate the project against scope creep, thattendency for a project to pick up new and unforeseenrequirements that redene success. In particular, lookat scope in terms of both the breadth and the depth

of the legal work requested; set a goal, even thoughit is not always achievable, of doing only outcome-determinative work.

Understand from the outset the project s (orcase s) return on investment (ROI) for both the clientand the practice. Minimize the work you do on legalprojects with low returns, but remember that projectscan have returns not easily measured by money.Use at least informal ROI analysis to develop a coststructure and budget. Don t be afraid to discuss fee

or departmental chargebacks up front with the client,but focus on value delivered, not just cost.

Build a clear picture of the team you need forthe project to be successful. Analyze the skills youneed, the type of work, and the right professionals toachieve the project vision and get to done. Dontsimply draw on a pool of whos available or not billinwithin the practice.

Finally, develop a communications plan tocover items such as the business problem, scope,fees or chargebacks, project/case budget, billingquestions, status updates, risks, work processes suchas meeting formats and decision making, and changemanagement. All of these elements will likely comeup during the lifetime of the case. Deciding up frontthat you will communicate proactively about themminimizes difcult conversations in the heat of a matte

and mitigates the occasional client tendency towardmicromanagement. Creating a communications planup front only takes an hour or two and will save hours pain, difcult discussions and client unhappiness.

The Second Stage: PlanningPlanning is the most overlooked step in managinga legal project. When its overlooked, the result is arushed, ready . . . re . . . aim approach.



CONTROLLING COSTS WITH LEGAL PROJECT

It s understandable that attorneys and manyoject workers seek the thrill of diving into

xecution. However, a modicum of planning not onlydesteps trouble but increases predictability andost certainty.

The iron triangle the tradeoffs among scopework, schedule and resources (money and people)

governs both planning and subsequent execution.here s no free lunch; changing one element affects atast one of the others.

Break out the project into manageable tasks.asks should be between about 8 and 40 hoursn most projects of a few months or less, andhould revolve around outcome-determinativeork. Foster longer tasks and you lack insight intosk details, perhaps missing important aspects.reate tasks too short, and you introduce excessiveocess overhead. The next step is to assigne right people to the project s tasks. Consideradeoffs, such as a partner costing three times much as an associate but who is five times asfective. Schedule the tasks according to resource

vailability, deadlines and dependencies (when onesk affects or depends on another).

Create a budget to keep the costs of the workithin client or departmental guidelines, and sharewith the project/legal team. Budgets and task

escriptions guide the team as well as the projectanager, and help minimize the time spent on workat the client doesn t value highly.

Consider what metrics and measurements you llse to track progress. Keep in mind that accurate,ppropriate metrics are your friend on a project, butisaligned metrics can cause signicant damage.

What you don t know hurts you. Create, and keepurrent, a worksheet that lists risks, your exposure

(probability times loss), and what you can do tomitigate or counter them.

Mind the gap. Watch for the legal gapsbetween the client s situation and the desiredoutcome; foresee gaps between what youknow and what you need to know; and bewareyour own gaps, aka learning opportunities as alegal project manager. Common gaps includeresources you haven t located or that may beunavailable; lack of agreement on done and

the two or three must-do items; dependenciesyou can t fully track or understand; nancial andbudget issues; undecided items that need actionnow; misaligned assumptions, both project andlegal; and lack of clarity around work processes,decision making, and conict resolution.

Finally, watch out for analysis paralysis. Toolittle time in planning leads to inefcient, costlyprojects. Too much leads to the same result.

The Third Stage: ExecutionExecution is the time for driving on the legalissues, for the attorney/project manager as wellas the rest of the legal team.

When execution overlaps planning, as itoften will, execute simpler tasks rst as youplan later tasks. Consider breaking projects into

mini-planning/execution cycles, and, as always,communicate broadly.

It s up to the project manager to deal withdifcult clients, directly or through a clientmanager. Focus on their interests and how done will further those interests.

When circumstances change or differ fromwhat you originally believed, deal with reality now. Use change management to control the



possibility of runaway projects. Make sure you havea decision structure for dealing with changes beforeyou re confronted with them.

Sometimes the schedule will need to becondensed when there s more work than imagined,fewer or less productive resources than planned,or the client (or court, etc.) imposes new deadlines.Keep the project team and the client informed of allschedule changes. Use tools such as SharePoint toshare project and team information. Provide regular

progress updates to the client, not just bills orchargeback statements.

Seek objective truthabout the project, always.Tell the truth yourself,as you know it, whenyou know it. Don t pointngers on failures. Asthe project manager,don t let others pointngers either; interposeyourself, even as a target,if necessary.

The Fourth Stage: Delivery and EvaluationDelivery and evaluation are important as a nishingstage to every project.

Obtain signoff from stakeholders that the projecthas reached done and that the practice has met theconditions of satisfaction. Ask the client for feedback.Even the simple act of requesting feedback andhearing the client out improves client satisfaction. It seven better if you nd value in the feedback and use itto improve future work.

Ensure project documents make it into yourdocument management solution, whatever that may

be: ling cabinet, e-mail folders, SharePoint or formasoftware system. Capture as much knowledge andlearning as you can. Remember that all practiceshave a knowledge management system of some sort,even if it s the institutional memory of attorneys (andsupport staff) who ve been around for years.

Learn what went well on the project and how youcan build on it. Examine what didn t go so well, anddraw lessons on how to improve those aspects onfuture projects.

Finally, celebrate project success with some sortof passage ceremony. Itneedn t be an expensivteam dinner; on smallprojects, a sincere thayou for a job well donecan be meaningful.Celebrate individualsuccesses as well. Provpositive, specic feedbawhen you catch someondoing something right.

the team share by publicly acknowledging successes.

THE TOOLS OF LEGAL PROJECTMANAGEMENTThe sharpest tools in the project manager s shed

are the attorneys who are as committed to clientsatisfaction as they are to legal results. The mostimportant tool of legal project management is not apiece of software; it is the framework for organizingthe project and commanding its issues. Good projectmanagers use a combination of mental modelsand software tools to guide projects to successfulconclusions. Software tools without the right mentalmodels will create more problems that they ll solv

Law can be a calling,indeed a noble

calling in support ofcivilization and the rule

of law, but the practice of law is a business.



CONTROLLING COSTS WITH LEGAL PROJECT

nd they will sour everyone in the practice on the ideaproject management itself.

TOOLS OF THE MIND: THE LPMRAMEWORKhe focal point of legal project management is theelivery of value, not just legal services. LPM drivesalue to the client, of course, but also increases value

the practice.In a rm, that value comes in the form of clearer

ontrol over prots and an increased ability to delivere nonroutine work that clients are willing to payghly for. Don t forget that clients, no matter howuch cost pressure they may be applying, need rmsbe successful. They need to know that when they

quire specialized legal work, and when there s a lotstake, you ll be there to support them.

In-house, that value comes from being able toeliver more and/or stronger legal services to theany corporate departments you serve. If budgets areat or down and yet demands continue to increase,nly through a rigorous focus on value-added legalork can you meet your corporate obligations.

Legal project management provides a frameworkr delivering maximum value. The techniques

ummarized above are one part of the process,erhaps the most important part, but they won t work

isolation.One key activity is inculcating at least an overview

business and scal literacy in practice attorneys.aw can be a calling, indeed a noble calling inupport of civilization and the rule of law, but theactice of law is a business. Today, all attorneys must

articipate in a practice s protability. Understandinge practice s business doesn t mean becoming an

ccountant or getting an MBA any more than LPM

means morphing into a professional projectmanager. It doesn t even require signicantknowledge of math. But it does require learninga few basic concepts such as opportunity costand return on investment.

Another important concept to understandis risk exposure. All projects have risks, usuallymore risks than you can reasonably manage. Agood project manager examines the project sexposure to each risk and then works to mitigate

those risks with the greatest exposure forthe practice or the project. Risk exposure iseasily tracked via a spreadsheet, though moresophisticated tools are also available.

SOFTWARE TOOLS FOR LEGALPROJECT MANAGEMENTSome software tools such as those formanaging risk, sharing knowledge andcommunicating within the team can add valuewithout requiring an inordinate investment ofattorney time.

Spreadsheets: A series of simple spreadsheets can be the projectmanager s most important software adjunct.

For example, a risk spreadsheet helps

minimize the effect of unplanned events.For each potential risk the team sees on agiven project, dene a rough probability ofoccurrence and the cost to the project should itoccur. Together, these two factors probabilitytimes cost equal the risk exposure. Spendmore energy mitigating and managing risksthat create higher exposure. In addition, foreach risk, track the mitigation plan, or how to



prevent the occurrence; the contingency plan, whichis what the team will do should the event occur; andthe trigger, representing a clear signal that the eventhas come to pass. Continue to track each risk ona regular basis weekly for most projects untilthe probability goes to 0 percent, meaning it canno longer occur, or 100 percent, meaning that it hashappened. Involve the project team in risk tracking;the more eyes and ideas, the better within thelimits of client condentiality, of course.

Project Management Software: Most standalone project management software isill-suited for accidental project managers. First,the tools are complex, have steep learning curvesand are designed for professional project managers.Second, people often place inappropriate emphasison those mechanics of project management thatcan be most clearly dened, such as scheduling.They can provide the illusion of control withouta corresponding lowering of risk or increase indelivered value.

Index cards tacked to a corkboard above ahorizontal timeline can outdo high-end software formany projects and for many project managers. Keep itsimple and manageable. Extremely complex projectswith many moving parts may benet from more

sophisticated scheduling and tracking tools, but thoseare the same limited set of legal projects that wouldalso benet from a professional project managerassisting the team.

Communicating and Sharing Knowledge: One indispensible communication tool these days ise-mail; however, the old-fashioned telephone maybe even more effective in certain circumstances. (As

Marshall McLuhan noted, the medium often is themessage.)

Equally important are tools for sharing documentsstatus and knowledge among the project team.SharePoint is excellent in this regard, especiallywhen coupled with tools to help locate and reneinformation. If you re not already using a tool suchas SharePoint, consider a prebuilt extranet-plus-workspace to facilitate communication, knowledgesharing and institutional memory.

SUMMARY Attorneys can use legal project management tosucceed in managing cases even as they do the legawork necessary to succeed substantively in thosecases, and they can do so without process overheador obfuscating buzzwords. Becoming a truly effectiveattorney project manager takes practice, as well astraining and coaching; however, LPM also providespractical techniques, tips and tools that attorneys canput to use immediately.

Legal project management helps attorneyssucceed with their projects in ways that go directlyto the rm s bottom line or the department s P&Lcontrolling costs, meeting schedules, managing risksand maintaining sanity while doing so. ILTA



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Over the past two decades, law rmshave applied various informationtechnologies to automate keyaspects of conict of interestprocessing during new matter

intake and lateral hire processes. At their best, thesesystems have helped to reduce the toil of compilingreports and maintaining key data used in searching.Typically, the search technologies embedded in these

solutions are based on simple structured data andkeyword search for text elds such as client, matter oparty name. These legacy techniques have not keptup, though, with key changes in search technology.A recent study published by the Text REtrievalConference (TREC) found that keyword-based Boolesearching the kind typically used in the conictsprocess returns only 24 percent of the relevantresults, missing 76 percent of the relevant content.

LIZA MADDEN AND MIKE SAFAR AUTONOMYiMANAGE

Better Due Diligence ThroughBetter Search Technologies:Meaningful Conict of Interest Processing



The risk associated with a conict of interest claiman be huge, and as the size of rms has grown, soas the complexity of best practices. Meanwhile,onict of interest systems have continued to searchnly a xed set of structured data sources, namely theatters, parties and lists of physical records. The vastajority of content stored in legal information systems.g. , documents and e-mail messages), however, isnstructured. Legacy technologies are ill-equipped toovide the scalability and intelligence necessary to

p these sources duringn organized conict ofterest process. The riskignoring such a large

oportion of the rm sformation assets may

o longer be tolerabler rms that are undercreasing pressureimprove their due

ligence during aonicts check.

Modern innovationssearch technology

an help to broaden theue diligence associatedith the conicts search without overwhelming the

xisting processes or staff. Expanding the scope ofarches increases the effectiveness of the conictsocess by exposing potential conicts that traditional

pproaches can miss. Conicts analysts productivityenhanced through faster processing power and the

dvanced clustering capabilities of large results sets,hich includes the ability to automatically lter noisesults from more relevant results.

SEARCH TECHNOLOGIES FORUNDERSTANDING THE MEANINGOF UNSTRUCTURED INFORMATIONInnovations in search technology associated withunstructured data have advanced considerablyover the last decade. Using sophisticatedmathematics, and statistical and machine-learning techniques, computers now understandthe meaning of unstructured information. Forexample, in a conicts search, these systems are

able to understandthat a documentor record thatreferences SteveJobs may also haverelevance to a searchfor Apple Inc. Moreover, the systemcan understandthat Apple Inc. isan organizationalname, distinct fromthe phrase an applea day. Withoutunderstanding theunderlying meaning

of the content, expanding the target corpus by

400 percent to include unstructured data wouldoverwhelm the conicts process and put therm at a competitive disadvantage. Intelligenttechniques to understand the meaning ofunstructured data are essential for reducing thenoise level in large searches.

There is no one search strategy thatrepresents a whole solution to improving theprocess for conicts checking. A range of

Expanding the scopeof searches increases the effectiveness of the conicts processby exposing potential

conicts that traditionalapproaches can miss.



techniques must be combined and properly applied asan effective response to searches for unstructured data.These techniques include the following:

Automatic Query GuidanceAs the user enters search terms, the system canlook for related terms and searches that may be ofinterest to the user to help produce a more accuratesearch. For example, typing Einstein might turn upa more appropriate search such as Albert Einstein.

Other relationships provided through a rm-suppliedthesaurus and through automated analysis by thesearch engine might turn up other interestingrelationships such as Enrico Fermi.

Relevancy RankingIt is quite common for the conicts analyst to beforced to search on several variations of a nameusing wildcard characters and various spellings tobe thorough about nding a conict. Today, thesetechniques can be automated, and the results canbe automatically scored as to how close they are tothe original query without the user having to guessat every variation that can occur within the text. Forexample, using relevancy ranking, the system candetermine that an exact match on Albert Einstein ishighly relevant, and Albert went to Einstein Bagels

for coffee

may be irrelevant. Relevance can befurther tuned to suit the process, such as prioritizingresults from active matters as higher in relevance thanmatters closed more than ve years ago.

Entity Extraction: Finding Names of People andCompanies

By employing various methods of detecting thecontext of word usage, technology can automatically

differentiate proper nouns. For example, it may beimportant to weight references to General Electricor GE as much higher in relevance than a documentthat simply contains the words general and elec

Automatic CategorizationNot all content is equal. A at search to nddocuments or data that contain a simple keywordor wildcard pattern may turn up many thousands ofhits. Today s technology is capable of automatically

determining the context of a document within theoverall repository and can be taught about the rmunique business processes through simple traininand learning techniques. Once this process is applied,certain categories can be weighted higher than othersFor example, the rm may assign a high degree ofrelevance to e-mail messages referencing discussiabout potential representation or do not represenas this type of dialogue is critical to the intake procesbut is difcult to determine through traditionalkeyword searches. Without automated categorizationdetermining the differences among various types ofcontent depends on the application of structuredmetadata to each document, which is both laboriousand typically incomplete.

These technologies, and many others, when

carefully applied to the conict of interest process,increase the effectiveness of the conicts analyst andattorney evaluating new business. The speed at whichconicts are resolved and new business is approvedis ever more important. Advances in meaning-basedcomputing reduce risk by increasing the scope of duediligence without overwhelming the process. ILTA



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The progress in law rm businessdevelopment over the past decadehas been driven primarily by the frontofce. Strategy-based initiatives haveincluded hiring Chief Marketing Ofcers

and public relations agencies, launching rebrandingcampaigns and dynamic websites, as well as lawyersleveraging social media tools, such as LinkedIn andTwitter, to connect directly with prospects. On the

ip side, back-ofce technologies to support theseefforts have largely been reactive, facilitating thefunctions associated with new business intake, butnot innovating the process as a whole. True, lawyersstill receive the all-important client/matter numberto begin billing. However, a series of colliding factorsimpacting law rm business, including the rise of riskissues and the fall of the economy (and law rms),has created an opportunity for rms to transform new

YURI FRAYMAN THE FRAYMAN GROUP

Putting the Business Back in thNew Business Intake Process



usiness and risk-related IT cost centers into trueompetitive advantages. The result is a redenedpproach to new business intake that is strategic, safend fast.

VOLUTION: NOW SERVING CLIENT/MATTER NUMBER . . .

mply put, lawyers want to begin billing right away,hich makes new business intake all about gettingthe client/matter number as quickly as possible.

istorically, however,ew businesstake has beenlargely manualocess requiring aemendous amount

human resources.e-keying information,time-consuming

nd error-proneocess, became the

orm. Lengthy tomesontaining details ofotential conictsere printed anduted not only to the requesting lawyer, but to allhers in the rm involved in potential hits. Lawyers

ad to take precious billable time to review these longports for potential issues or, worse, just skimmedrough them, possibly missing red ags. Bottleneckssociated with paper-based routing and approvals,

nd wasted time spent on repetitive tasks, madeclear that technology could be implemented toduce these inefciencies.

IT has always been charged with nding the rightols to do the job easily, effectively and with as

little maintenance effort as possible. We needa customer relationship management (CRM)system (check), time entry system (check),document management system (check), and soon. With such clear-cut needs for other back-ofce functions, rms were on a fairly levelplaying eld. Firm size was what typically drovethe selection of one vendor s technology overanother. But when it came to new businessintake, one clear technology solution didn t

emerge.Dependingon the rm,informationneeded forevaluatingpotentialbusiness andassigning aclient/matternumber couldcome fromtime andbilling systemreports, conicts

management systems or any number ofinformation repositories within the rm. Business

rules for evaluation and approvals also varied.IT turned to off-the-shelf, bespoke and hybridworkow tools that could help automate andstreamline processes to reduce the time requiredto open new business.

Still used today, these new business intakesystems automate the steps in the reviewand approval process, and then trigger theissuance of the client/matter number. IT did

New business intakesystems in use today were

not likely developed incooperation with rm risk

management leadershipand may not be reectiveof a rms current riskprole and practices.



its job to get information to ow from point A topoint B faster. Although an improvement, the term new business intake became synonymous with theelectronic routing of forms and not with the businessstrategy, risk issues and work-habit realities thatmust be considered and addressed at every stage.For the most part, these initiatives were driven by ITrequirements, not business requirements, and thetools developed reected that view.

WHEN IT

S TIME TO CHANGE, YOU

VEGOT TO REARRANGEBusiness does not operate in a vacuum, and the stepsto get from a request for a client/matter number tothe issuance of one are constantly in ux as internalprocesses, new technologies, risk protocols andeconomic considerations change.

PROCESS CHANGESEvery law rm has its own unique methodologyfor bringing in and vetting new business, but therules are not set in stone. Evaluation criteria canchange, and roles and responsibilities can shift.For example, some rms have transitioned conictsvetting from lawyers to conicts analysts, many ofwhom are non-billable lawyers tasked specicallywith conicts oversight. In doing so, conicts

analysts may need deeper drill-down capabilities,and information disseminated to involved lawyersmay need to be tailored to a specic relevant hit.These changes impact information access, analysis,routing and reporting. Another common exampleof a process change impacting new business intakeis a merger between two rms that likely utilizedifferent technology systems and business rules.External factors such as regulatory mandates can also

impact a rm s new business intake requirementsand information-gathering processes. For example, arm expanding its business practices overseas mightnow have to scrutinize potential business againstSolicitors Regulation Authority (SRA) guidelines.

TECHNOLOGY CHANGESConnecting disparate internal systems via APIsand integrating external sources, such as Dunn &Bradstreet, are fairly typical processes with most new

business intake systems. However, what happens whethese internal systems change ( e.g. , a switch in timand billing systems) or when new data repositories aradded to the mix ( e.g. , e-mail)? Also consider the retime nature of news in today s world. Are results froexternal information providers, such as Lexis-Nexis,D&B and others, as current as Google Alerts, CNNRSS feeds or corporate Twitter streams? How can,and how should, rms keep up with the informationavailable about clients and prospects?

However, the toughest technology challenge inmost rms is accommodating the way that lawyersreally need and want to work. While most newbusiness intake systems have moved the approvalprocess from the physical inbox to the virtual onethe reality is that lawyers are using their hand-helddevices to keep business moving and to remain

competitive. New business intake processes andexisting systems must deal with the reality of thisincreasingly mobile workforce. A lawyer might needto send a request for new business from a cab inbetween meetings or before jumping on an 18-houright to India. Hundred-page-long conicts reportscan t be sent and reviewed or marked up on hand-held devices. The approval process is once againslowed, just for new reasons.



PUTTING THE BUSINESS BACK IN THE NEW BUSINESS

RISK PROTECTIONrms have signicantly beefed up their riskanagement practices in keeping with the global

ature of today s business. Firms need to manageotential exposures that could result in loss ofputation, nes or worse. This includes managinggulatory requirements and other externalquirements such as Know Your Customer (KYC),well as managing ethical and privacy concerns.

ccording to a 2008 Altman Weil study, more than 85

ercent of law rms have appointed in-house Generalounsel, and the majority did so in the last few years.

New business intake systems in use today wereot likely developed in cooperation with rm riskanagement leadership and may not be reective ofrm s current risk prole and practices. For example,e rm may now have a rule that no work, evenmail communication, can begin against a matter

ntil related information barriers and ethical walls areplace. However, the existing new business intake

ystem may issue a client/matter number to thequesting lawyer, whose team then begins billableork on the matter before required security is in place.

CONOMIC CONDITIONSo one could have predicted the economy s screechingalt and the impact it would have on rms. This led to

n increased need for strategy and speed in the newusiness intake review and acceptance process. Firmsay now pay closer attention to a potential client sedit score or the accounts receivable of an existingient. A rm may change acceptance protocols in orderbring in new types of business to ensure protabilitya tough economy (and yes, that may be in direct

onict with risk protocols as noted above). With soany rms circling for business, rst mover advantage

Launching Your New Business

Intake (NBI) Project:

Choose your vendor partner wisely. Not everytool kit vendor understands NBI.

Instead of buying a tool kit to build yourcustom NBI workow, consider NBI applicationproviders. These rms not only understandthe process, they likely leverage sophisticatedworkow-based systems that can be extended

for other rm workow needs. This can savetime, resources and budget dollars needed toget up and running.

Consider Microsoft Windows WorkowFoundation (WWF)-based solutions, asopposed to proprietary workow engines.WWF is strong, and for NBI type human-intensive workows, it s the best technologychoice at a fraction of the cost.

Be open-minded. Your way of performing

NBI may be the best you know, but may notbe the best system to implement. Find andtrust a vendor that brings the knowledgeand expertise of many different NBIimplementations.

Be prepared for change management. Anychange in process requires retraining ofpeople and resetting their expectations. Planfor it to avoid disappointment and to ensure a

successful rollout and the acceptance of newtechnologies and processes.

Try to achieve better alignment of business andIT goals by ensuring constant communicationbetween GC and the CIO, and moreimportantly the rm s entire executive team.



is critical. Also, with collapsing rms, partner layoffs andassociate furloughs, new business intake systems mustalso support the vetting of lateral hires and merger andacquisition activity, from both business strategy and riskperspectives.

New business intake systems in use today werebuilt to accommodate specic rule sets. As a result,these naturally arising changes are largely addressedvia retrots to the system. The more nuanced thenew business intake process becomes, the quirkier

supporting technologies become sometimespreserving efciency and sometimes not. Firms need todetermine the time and costs associated with updatingthese new business intake systems. What are the truecosts associated with workarounds, not just vendor orconsulting fees, but also IT resource drains and thepotentially negative impact on speed and efciency?

Delays impact decisions, which impact speed,which directly impacts competitiveness andprotability. Further, dated information gatheringand dissemination methodologies impact decision-making condence and potentially expose the rm torisk. New business intake technology downshifted toaddressing nuances rather than revisiting the overallbusiness needs on a holistic scale and that s wherewe are today. It s no wonder new business intake andrisk management systems are viewed as cost centers.

REVOLUTION: FROM COST CENTER TOPROFIT CENTEROne upside of the current economic situation is thatit has served as a highly disruptive force that bringswith it the opportunity for new leaders to emerge.Law rms are rening their business strategies andapplying new dynamics to old business practices,choosing to focus on long-term planning supported

by strategic investments that will ensure a return oninvestment. By helping to put the business edge backin new business inception, IT can play a major role inleveraging new strategies and technologies to not onlysupport the client intake and risk management needs othe business, but also to help the rm proactively andprotably address these core functions.

Sure, getting to the client/matter number fast isstill the name of the game, but when you take a holisticview and address the true business needs of the rm,

you have the potential for a comprehensive technologyplatform that can intelligently support the end-to-endneeds of the business and can transform cost into prot.

CIOs are vital members of leadership teams forrms on the road to reinvention. IT will play a pivotalrole in the new frontier. Success is dependent uponthe ability to look beyond what s in place today andunderstanding what s possible tomorrow.

In leading this charge, consider these next-generation concepts:

Holistic Approach:Alignment of business goals, business development,risk management and technology.

24/7 Capabilities:Decisions and resulting actions available and

implemented around-the-clock (in minutes, not days.)

Global View:Ability to accommodate mandates that may vary fromlocale to locale (even for the same client), multiplelanguage requirements and time zone differences.

Mobility:Two-way communication for receiving and sharing



PUTTING THE BUSINESS BACK IN THE NEW BUSINESS

formation without any compromises to detail oruality.

Collaboration:eamless information ow across the rm s systemsnd staff.

Weighted Information:ata from multiple internal and external sourcesnked according to quality.

Smart Logic:continual analytic view incorporating decision

ngines that gain intelligence as they go

Continuous Search:ngoing mining of existing client and prospect datapositories (structured and unstructured) to nd

pportunities and red ags.

Automation:xtended workow to simultaneously automate theckdown and population of work-in-process systemsthe same time a client/matter number is triggered.

Audit Trail:ocumented compliance of every step in the new

usiness inception process.

Fluidity:bility to easily and continuously accommodate

hanges with no additional costs or resources required.

Let your rm s technology demonstrate a strategicew of new business intake and conicts, a criticalep in better business development. ILTA

Were talking about new business

intake online right now.ILTA MEMBERS, join your peers online in the ILTAE-Group discussion forums. This popular memberbene t is a members-only, topic-driven, onlineforum designed to improve communication amongpeers. There is no better place to get advice,exchange ideas, learn from rst-hand experience andbene t from the knowledge of other legal ITprofessionals.

How does it work? Log in to E-Groups from the ILTA homepage andsubscribe the forums that interest you. New posts andreplies will be sent to your e-mail inbox as often asyou like. Post a message or reply of your own to getanswers and recommendations from your peers.

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Although surveys of corporate counselhave noted the need to controlcosts for a while, that need now

tops their list of priorities for the rsttime in three years. Large numbers

of corporate counsel are also reporting that themajority of their law rms have not taken seriouslytheir suggestions to increase the value of theirservices, and some outside counsel have providedfeedback indicating that services value has actuallydeclined. This lack of responsiveness by law rms isprompting in-house counsel to take bolder action to

drive efciency through value-based strategies andthe utilization of online matter management systems,which can evaluate law rm performance.

While many lawyers continue to debate whethercorporate counsel will actually go forward with theseplans, some rms have recognized that gaining asustainable competitive advantage requires a betterunderstanding of their costs of production and amore collaborative service delivery model. Given thegrowing number of case studies that demonstratethe effectiveness of Lean and Six Sigma concepts inservice industries, law rms should investigate how th

LANN WASSON HUSCH BLACKWELL SANDERS LLP

Lean Six Sigma: Mastering theArt of Service Delivery



amework of Lean Six Sigma can streamline internalperations and translate conversations about valueto lower costs, higher quality and levels of clienttisfaction that result in larger portfolios of work. In

oing so, law rms may also discover how to clear theommon hurdles to the successful deployment of Leanx Sigma in professional services.

HE INVISIBLE HAND

Whether as a result of new leadership, large technology

mplementations or growth through mergers, mostw rms have pursued operational excellence bycorporating best practices and by benchmarkingeir technology systems and programs against industryandards. While appreciating the merit of thesepproaches, Michael George, Ronald Snee and Rogeroerl, formerly at Toyota, DuPont and GE respectively,

ontend that service functions and businessesperate with more complexity and less technical andanagement infrastructure than their manufacturing

ounterparts, which results in enormous amounts oftivity that have no value from the client s perspective.nce at least half of the work to deliver services is non-

alue-added, George contends that Lean Six Sigma canten reduce the cost of service processes by 30 to 80

ercent, increase the speed of service delivery by 50ercent, and the capacity of teams by 20 percent.

Undoubtedly, law rms t this prole becausee functional areas serve hundreds of partners whoe promoting their own practices and cross-sellinghers. Often law rms lack the line of sight necessaryconnect cost and value, because processesmain undocumented; the division of labor hinders

ommunication across functional and legal areas; andrms lack a common language with which to discussrategies for improvement. Furthermore, billing by

the hour focuses management s attention onutilization and realization versus metrics likecycle time and process efciency. By researchinghow Lean and Six Sigma methodologies canbe applied to legal service delivery, law rmscan start to gain visibility into the themes andvariation of their workows and understandhow to orchestrate projects that minimize theunintended consequences of the billable hour.

THINKING LEANLean and Six Sigma address these environmentalfactors through the application of methodsand tools originally developed in theToyota Production System and Motorola sQuality Initiative, and then later at GeneralElectric under Jack Welch. As these processimprovement methods have evolved in services,they have become problem-solving strategiesthat fundamentally change the way individualsthink and teams collaborate. In particular,Lean activities are advantageous because theydraw on the knowledge and experience ofpeople doing the work. In a recent interviewwith iSixSigma Magazine , Lisa Damon, Chairof Seyfarth Shaw s Labor & EmploymentDepartment explained, There are denite

hierarchies or strata in all law rms.

SeyfarthShaw has been replacing the old hideboundstructure that reinforced division with a teamdynamic that brings partners, associates andsupport staff together. People...see the full valueeach person can bring to the table, regardlessof what their title or position in the rm maybe. Sylvia Coulter, a Six Sigma Green Belt and Vice President and Chair of Hildebrandt Baker



Robbins Client Development and Growth Practiceconcurs. By treating people internally with the samerespect lawyers treat their clients, rms can buildincredible loyalty within legal teams and throughoutthe organization.

From an improvement standpoint, instead of simplytrying to cut costs, Lean strives for growth through theenlarged capacity of more effective processes. Forinstance, in a legal context, a real estate client mightwant to reduce the time

required to negotiate andclose contracts and leasesin order to open morestores within a certainperiod of time. UsingLean methods, lawyerswould rst map the legalprocess and then identifyand remove activities,such as negotiatingcertain provisions,which do not addvalue from the client sperspective. Attorneyswould then reorganizethe remaining activities to minimize the interruptions,wait time and unnecessary transfer of information in

the workow. Supervising lawyers would also identifywhich activities should be assigned to associates andparalegals to maximize value to the client. Since 20percent of the activities typically cause 80 percent ofthe delay, as George notes, increasing the speed of asmall percentage of the work has a disproportionatelypositive effect on quality and cost. Thus, increasing theproportion of valued-added activities in the workow(process efciency) and organizing the process more

effectively (cycle time) results in faster lease closingsand more store openings.

STRENGTH IN NUMBERSIn addition to being a statistical concept, Six Sigmais a business philosophy that addresses the needfor short-term gains while developing talent andimproving operations. In his book The New SixSigma , Tom McCarty, former Vice President of

Consulting and Training

Services at MotorolaUniversity, underscoresthe importance ofunderstanding the Voiceof the Customer (VOC)by emphasizing thatteams should describetheir perception ofclient expectations earlyon in an engagement.In a 2009 ABA paper,Betsy Collins noted thabecause every discoveproject is different, it isimportant and relatively

easy to implement the voice of the customer SixSigma application into your projects. It s simply go

business to pay attention to how your client wantsto frame the scope of the project and what theyview as the crucial elements. When nearly everyindustry survey of client service has identied a largegap between attorney perception and actual clientsatisfaction, improving attorney s capabilities in thisarea helps reconnect costs to the value of services.

By learning how to identify, interview and surveystakeholders and prioritize their value propositions,

In addition to beinga statistical concept,

Six Sigma is a businessphilosophy that

addresses the need forshort-term gains whiledeveloping talent andimproving operations.



LEAN SIX SIGMA: MASTERING THE ART OF SER

wyers and project managers can translate generalxpectations of responsiveness, quality and cost-fectiveness into measurable factors that Six Sigma

enes as Critical to Quality, which can then bealidated with clients and communicated to projectams. Understanding, how to interpret the voicethe client is even more important when legal

epartments approach law rms from the standpointtheir own Six Sigma programs.Six Sigma also provides a world-class improvement

ethodology, DMAIC (Dene, Measure, Analyze,mprove and Control), which emphasizes theandardization of activities, data-based decisionaking and continuous improvement. Although Sixgma is most famous for its statistical measurementproduct defects, in a service environment, defects

e not simply mistakes and rework, but any activityat does not add value from a client s perspective.a recent article in iSixSigma Magazine , David Niles,

resident of SSA & Company, a leading consultancyr Lean Six Sigma, points out the importance of data-iven improvements. Their research of 500 companies

howed that attempts to improve a process without aata-based approach result in a misdiagnosis of theot cause or causes of a problem nearly 40 percent ofe time.

Simply measuring a process is usually a challenge

r law rms, since most systems are designed onlycapture time for billing purposes. If one follows

ichard Sabats approach in his case study onortgage loans, one could measure the number of

ours each partner, associate and paralegal spenturing each day on activities to complete a legaloject. Then one could plot the data points along anaxis (hours) and y-axis (days) to see the distributiontime for each type of timekeeper in a matter. Used

alongside a process map, graphing a sampleof these matters would show stakeholders themost critical periods of delay and rework, thegreatest areas of variation in the amount oftime needed to complete certain tasks, andopportunities to improve value by adjustingtimekeeper assignments. Finally, by establishinga baseline for a type of matter, lawyers couldbetter understand the costs of productionfor the service and approach alternative fee

engagements with greater condence. In thecontext of Six Sigma, continuous improvementgoes beyond lessons learned by incorporatingproject data, client feedback and the team sobservations to make processes more effective.

GREATER THAN THE SUM OFITS PARTSAlthough Lean and Six Sigma methods canbe used independently, often companies inservice industries have minimized the trade-offsbetween quality and cost/time by integratingthe two methods. Lean complements SixSigma by reducing complexity, eliminatingnon-value added activities and improving cycletime. Three-to-ve day Kaizen sessions canalso accelerate DMAIC methods and balance

resource constraints through intensive, action-oriented workshops. Six Sigma complementsLean by placing client value front and center,using data to reduce variation within keyactivities and creating an infrastructure tomanage and sustain results. In an iSixSigmaMagazine editorial, Jessica Harper relates theconviction of Bob Silvers, Managing Director ofSSA & Company, that when used together, these



two methods can solve 90 percent of the problemsfaced by organizations today.

The combination of both methods is so effectivethat successful organizations gain a competitiveadvantage in their industry. For example, Sneereported in Six Sigma Beyond the Factory Floor that the Commonwealth Health Corporation saved$800,000 in the rst 18 months, prompting its CEO toannounce, I wish we had done this ve years earlier .. . the competitive edge the organization has gained

through this process is incredible.

By focusing onthe client experience, Silvia Coulter commented in arecent interview that a law rm can become the Ritz-Carlton or Starbucks of the legal industry. She notedthat process improvement is the key to unlocking thedoors to additional revenue because a consistent levelof quality across the rm makes it really easy for clientsto send more work to the rm.

LESS IS MOREOne of the primary challenges for serviceorganizations is to adapt the concepts, vocabularyand tools of Lean Six Sigma to their industry sothat managers can apply these manufacturing methods to their projects. Fortunately, the serviceindustry literature and industry surveys offer someguidance in understanding how many tools to use

and whether to use the more statistical tools. Sneerecommends including some initial training instatistics so that managers can not only learn themore advanced tools, but also understand how tointegrate them as they solve problems. However,he also points out that you don t need an armyof professional statisticians to make Six Sigmawork. Ordinary people can be trained to conductSix Sigma projects successfully. With industry-

appropriate training and the right mix of tools,managers in service industries can keep the rigor ofSix Sigma s data-based approach without having tobecome the legal equivalent of an engineer.

Michael Marx s surveys of Lean Six Sigmapractitioners also show that of the 50-odd toolsavailable for use on projects, only a few tools process mapping, project charters and brainstorming are used all of the time by the majority of certiedprofessionals, and a few more Pareto charts, 5

Whys, basic statistics and graphical charts areconsidered tools of choice. Marx s surveys alsoindicate that Lean tools, such as process mapping, 5Whys and the 7 Wastes of Lean, are often preferredwhen starting an initiative because they are easierto learn, offer faster returns and develop a processimprovement mind-set. In services, more practitioneralso use Voice of the Customer, Stakeholder Analysisand SIPOC, which identies the suppliers, customersinputs and outputs of a process.

Since the nancial benets of Lean Six Sigmainitiatives stem from the cumulative result of successprojects, organizations also need to pay attention totheir ability to manage projects and change over thelong term. In the article Manage Your Human SigmJohn Fleming argues that while widespread use of Sigma and TQM methodologies has resulted in vastly

improved product quality over the past two decades,there is considerable local variation in quality atthe individual and team levels in service and salesorganizations. To address the variability in HumanSigma and the entropy factor, organizations mustnot only offer training to develop process thinking,but also adjust policies and incentives to rewardattention to continuous improvement, hold sponsorsaccountable for results and develop communication




ans to confront parochial tendencies. Over thest few years, many legal organizations have

xpanded their ranks to include project managersnd business and knowledge management analysts toinimize the costs associated with large technology

mplementations and practice group development.nce these roles often span functional boundaries,ese managers and analysts can play a key role ininforcing new processes, developing skills, coaching

ams and sustaining the overall initiative.

EGAL DEPLOYMENT CHALLENGESWhile the literature applies case studies from

w departments to all areas of the legal vertical,ere may be differences between the way legal

epartments and law rms adapt these concepts toeir organizations. Most of the discussion about legal

epartments tends to reference Six Sigma methods

over Lean strategies, possibly because the casestudies come from larger organizations thatalready have functioning process improvementinitiatives. Legal departments may also startby applying Six Sigma to litigation processes,such as e-discovery, because the process isalready well-dened and an important elementin a department s effort to manage risk. Finally,as Betsy Collins observed in Six Sigma, the

Discovery Process and the Corporate LegalDepartment, the metrics that result fromprocess improvement projects may justifyincreasing law department technology budgets,which in turn provides additional tools tomonitor and manage value-added strategies.

On the other hand, law rms may be moreattracted to Lean methods because Leanrequires a more modest infrastructure and can

. . . law rms may be moreattracted to Lean methodsbecause Lean requires a moremodest infrastructure and cangenerate results more quickly.



generate results more quickly. Lean can also have agreater positive impact on an organization s culture,which helps teams overcome resistance to change.Marx s industry surveys in iSixSigma Magazine alsoindicate that smaller companies ($50 million inrevenue) tend to use Lean, while larger companies($1 billion in revenue) tend to deploy Six Sigma.Law rms may alsochoose to start withLean because the

initial investment issmaller. Surveys fromthe American Societyfor Quality s healthcaredivision indicate thatthe start-up cost for aLean project is usuallybetween $25,000 and$50,000, whereasSix Sigma initiativesare usually closerto six gures. Sinceeach organization sobjectives and timeframes are different, itis important to conducta readiness assessment

and create a deployment plan in order to understandthe full extent of one s investment.

WE RE DIFFERENT While the healthcare and nancial servicesindustries have recently seen an explosion ofimplementations, the legal industry holds thedistinction of being one of the last service functionsto incorporate Lean Six Sigma concepts and tools.

Even those rms that have recognized the needfor greater operational efciency or a differentvalue proposition have undoubtedly encounteredresistance when discussing process improvementstrategies. Many attorneys perceive these methodsas manufacturing initiatives that don t apply toprofessional services or as management fads that

divert resources awayfrom billable projects

George and

Snee have identifiedthe perception that we re different asthe fundamentalreason for resistanceto deployment. Thisattitude reflects a cobelief among lawyerthat legal work ismore of an art than ascience. In an intervwith the CreativeGrowth Company lasyear, Paul Mattingly,Seyfarth s Atlanta ofManaging Partnerexplained, There is

definitely an art to what we do . . . It is a humblingthing to say that you can break down what I do intoprocesses and steps and you can maybe move someof that away from me, because I need to stay busymyself. Since account managers in firms are alsothe producers of legal services, there is a greatertrade-off within legal between the time required fortraining and billable work. To address the concern,Seyfarth incorporates leadership training in their

While the healthcare

and nancial servicesindustries have recentlyseen an explosion ofimplementations, the

legal industry holds

the distinction of beingone of the last service functions to incorporateLean Six Sigma concepts

and tools.




ogram, so that investments made by attorneysontribute to their personal value and careerotential. While overcoming these convictionsan be challenging, Damon attributes greatercceptance at Seyfarth to early internal success,actical experience and client enthusiasm for theogram.

While there are certainly similarities betweengal and healthcare, and between service functions

nd service vendors, there are also some notable

fferences that may make law rm implementationsore challenging. Attorneys account for nearly

alf of the workforce in law rms, whereas doctorspresent only about four percent of the staff in a

ospital. Despite their numbers, Ray Bayley, PresidentNovusLaw points out in an interview with BruceacEwen that the outsourcing literature shows that

etween 70 and 80 percent of legal work is not lawyerork, so many of the activities used to produce legalocuments and arguments are susceptible to processmprovement methods. Like so many other types of

itiatives, it is important to walk before one runs.y demonstrating how Lean Six Sigma can improvegal service delivery on internal projects important toakeholders, rms can challenge the were differenterception and build momentum for these programs.ike talented musicians who attend conservatories

master technique and theory, lawyers may alsoscover that intensive study of Lean Six Sigma canansform their creative work into world-class service.

TOTALED QUALITY MANAGEMENT

When close to 60 percent of all corporate Six Sigmaitiatives report failing to deliver expected results, itnot surprising that process improvement proposalse met with skepticism. Reminiscent of the time

when The Washington Post coined the phrase, Totaled Quality Management, September2009s BusinessWeek reported a rising interestin Six Sigma due to the tough economy, andadmonished managers from seeking short-termgains through its methodology. Earlier this year,the Wall Street Journal also cautioned againsthurried deployments in a recent article titled Where Process Improvements Go Wrong. The fact that hyperbole has followed process

improvement should serve as a reminder thatLean Six Sigma initiatives typically require twoyears of thoughtful adaptation, training andpractice before reaching a point of masteryand the critical mass necessary for culturalchange to begin. When properly applied, thesemethodologies still represent a sound way torun an organization. As Fortune quoted RayStata, CEO of Analog Devices in 1993, Totalquality essentially involves attention to process,commitment to the customer, involvement ofemployees and benchmarking best practices.It is hard to believe you cannot benet fromthat. As law rms consider new ways to operateeffectively and provide greater value to theirclients, Lean Six Sigma can offer rms freshinsights into their costs of production and

service delivery.Furthermore, law rms can clear the common

hurdles to successful deployment, such asdedicating human resources and budget,providing training, aligning projects to strategicpriorities and focusing on client value versus themethodology, by drawing on a proven gameplan developed over the last decade of LeanSix Sigma service deployments. In fact, Snee



and Hoerl conclude that the key difference betweenearlier improvement methods and more recentimplementations is the existence of an infrastructureof management systems that support and sustaindeployment. Executives from companies as diverseas Bank of America, Stanford University Hospital andClinics, ITT Industries and Seyfarth Shaw all emphasizethat personal executive involvement in projects andstrategy is the key to overcoming these stumblingblocks. In an interview with iSixSigma Magazine ,

Thomas Sager, Vice President and General Counsel forDuPont, said executive engagement is critical, because it is too hard to work on continuous improvementif you have people saying that we ve been doingthings the same way for 25 years and that s ne. Leadership engagement, instead of mere support andcommitment, is the essential ingredient in overcomingboth the we re different attitude and the perceptionthat TQM is merely another management fad.

LEGAL CASE STUDIESAs in-house counsel grow bolder, only time will tellwhether more law rms will move forward with LeanSix Sigma initiatives to tackle the challenges of costand value. Today a number of factors indicate agrowing interest in Lean Six Sigma within the legalindustry. First, as the ACC Value Challenge continues

to gain momentum, more law rms are consideringprocess improvement as a means to understand theircosts in alternative fee arrangements. Second, thereare a growing number of blog posts, conferencesessions and webinars on this topic, as well as trainingcourses, such as Hildebrandt Baker Robbin s WorkProcess Redesign program, which explicitly tiesthe knot between project management and processimprovement. By some accounts, more than100

legal organizations have requested presentations onprocess improvement over the last few years.

In part, the number of legal departments interestedin Six Sigma is growing because more than half ofthe Fortune 500 companies have already deployedSix Sigma to an extent. Organizations like Bank One,Caterpillar, DuPont, GE, IBM, ITT, Jones Lang LaSalKodak, Lockheed Martin, Motorola, Raytheon andTexas Instruments have also implemented Six Sigma ilegal services. Collins noted last spring that in man

companies the general counsel are being held to thesame standard and metrics as other business unitcolleagues and are expected to implement processimprovement in measureable ways. In companies thathave embraced Six Sigma, implementation of thephilosophy is as serious in the law department as it ison the manufacturing oor. Many law rms reviewitheir institutional client lists will likely discover anynumber of their top clients already practicing SixSigma methods.

Some writers have speculated that the use of SixSigma in legal departments may actually acceleratethe trend toward assigning matters to more efcientlaw rms. In Robert Ambrogi s Fortune article, Fothe Record, James Michalowicz, former litigationmanager at DuPont and Tyco, pointed out that anumber of law departments are now seeking to

integrate the so-called Six Sigma method of qualityimprovement into the management and monitoringof their outside law rms. The trend to assign workon the basis of efciency has already begun in someareas. In November 2009, Tyco announced a two-yearcontract with Eversheds, which, through the utilizatioof project management, had reduced Tyco s feesby 27 percent and the number of litigation casesby 60 percent, resulting in a 300 percent increase in




gh quality work for the rm. Likewise, a Corporateounsel article from December 2009 reported thatnited Technologies had engaged Seyfarth Shaw toandle almost all of the company s single-plaintiffmployment litigation after the rm introducedsociate general counsel Chester Paul Beach to the

eyfarthLean methodology. As assigning work on theasis of efciency becomes more commonplace, lawrms will need to discover more accurate means ofdding for work to remain competitive.

Over the last decade, the number of law rmseploying Lean Six Sigma has also grown, althoughw rms are talking about their projects. An early

ase study from Morgan Lewis demonstrated howe application of Six Sigma reduced the cost ofortgage loan services by 25 percent. Prior to its

cquisition by Bryan Cave, iSixSigma Magazine ported that Powell Goldstein utilized Six Sigmarst internally to improve processes like associatetention and recruitment, and then externallyits client relationship management program

volved with its Six Sigma clients. A recent Legalroject Management blog post by Paul Eastonso discussed how Morris James has begun to

pply Six Sigma to its e-discovery process. Finally,a number of recent interviews, Seyfarth reported

at it has completed over 30 internal projects,

om supply purchasing to nancial management toducing the time-to-close conicts from two weeks24 hours. In addition, some of their more recentojects have included M&A transactions, trademarkosecution, non-compete litigation, real estateasing, e-discovery, and collective actions. Seyfarthaims that its approach works across all areas of law

nd that it can consistently reduce the cost of legalrvices by 15 to 50 percent.

GAINING THE UPPER HANDLaw firms serious about understanding theircosts of production and finding alternativesto their value proposition should investigatehow Lean Six Sigma can help them gain acompetitive advantage in an industry definedby the billable hour. As more law departmentspursue the management of value through agreater use of Six Sigma and technology, itwill become more difficult for firms to maintain

the presumptions that process improvementdoesn t apply and that the expectation ofcost savings is fleeting. However, executiveleadership should complete the proper duediligence and weigh the cost of investmentover the long term before jumping into a largescale process improvement initiative. Manyfirms will undoubtedly walk before they run by implementing Lean Six Sigma on a projectbasis to streamline their internal operationsbefore approaching clients directly. While eachorganization s leadership ultimately overcomesresistance to new initiatives in its own way,there is now ample evidence to suggest thatlaw firms can deploy Lean Six Sigma strategieseffectively to reduce costs and engage clientsin a dialogue about value and growth. ILTA



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Burnsed, Brian and Emily Thornton, Six Sigma Makes a Comeback, Business Week , September 10, 2009.

Chakravorty, Tya S. Where Process-Improvement Projects Go Wrong, The Wall Street Journal, January 25, 2010.

Collins, Betsy P., John H. Goselin II, Caroline B. Keller, Joe Mann and Andrea Tecce. Six Sigma, the Discovery Process and the Corporate LegalDepartment, ABA Section of Litigation Annual Conference, April 19-May 2, 2009.

Coulter, Silvia L. Leading with a Forward Focus, Law Practice Magazine , April/May 2009.

Creative Growth Company interview with Paul Mattingly, Seyfarth Shaw.

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Fleming, John H., Curt Coffman, and James K. Harter, Manage Your Human Sigma, Harvard Business Review , July-August 2005.

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Jacob, Rahul. TQM More than a dying fad, Fortune , October 19, 1993.

Levett, James. Better Together, Executive Healthcare Management , July 2009.http://www.executivehm.com/article/Better-Together/

MacDonagh, Catherine Alman and Laura Colcord, Process Improvement for Law Firms, Legal Sales and Service Organization, 2008.http://www.legalsales.org/pdf/processimprovementforlawrms.pdf

MacEwen, Bruce. A Conversation with Ray Bayley of NovusLaw, www.AdamSmithEsq.com, D ecember 10, 2009.

Marx, Michael. Lean: Benets and Challenges, iSixSigma Magazine , September/October 2009.

Marx, Michael. Size Matters, iSixSigma Magazine , November/December 2007.

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In today s highly litigious world, the questionof whether to have an internal records

management group is a no-brainer. Thebigger question for rms is whether therecords management group is an effective

organization that has a say in how records should bemanaged at the rm, or whether the group performssimply a passive function, principally acting as aconduit for archiving rm records.

A good records management program createsefciencies in the overall litigation process byproviding key infrastructure channels to store,retain, process and produce records. Such aprogram can help facilitate better management ofclient information and assures its condentiality,integrity and reliability. All clients expect that theirinformation is retained in a secure manner, butthe reality, in some cases, is somewhat different.We have all heard the story of records found in

dumpsters, and woe unto the law rm that happensto be associated with such a story.

However, the pace at which law rms or internalcounsels operate can make it hard to apply goodinformation management practices. Barely has

a matter nished when three more arealready in the pipeline, and all require

immediate attention. In addition, a matter that wasclosed a year ago may now have to be reopened

and all relevant material reviewed across variousle servers, hard drives, separate repositories andoffsite storage. What can law rms do to ensurethat their primary legal work is not affected whilethey work to establish sound records managementpractices? Here are some key considerations.

Funding: Law rms must allocate at least some funding tothe records management program and providefor adequate hiring of personnel, equipment andtechnology to support the rm s needs. Askingfor money is never fun, but if law rms want goodrecords management, they have to get seriousabout providing at least enough funds to sustain aneffective records management group. Rather thanmake the junior paralegal the records person, a rm

should hire an experienced records manager to helpestablish and maintain the program.

Policy:Having a documented records manageme

The Business of Law download-issue-7694.pdf

Documents

Transcript of The Business of Law download-issue-7694.pdf