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We’ll open with a quote – we’ve had lots of feedback on “ There is definitely an art to what we do … It is a humbling thing to say that you can break down.

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Presentation on theme: "We’ll open with a quote – we’ve had lots of feedback on “ There is definitely an art to what we do … It is a humbling thing to say that you can break down."— Presentation transcript:

1 we’ll open with a quote – we’ve had lots of feedback on “ There is definitely an art to what we do … It is a humbling thing to say that you can break down what I do into processes and steps and you can maybe move some of that away from me, because I need to stay busy myself,” Paul Mattingley, Seyfarth Shaw’s Atlanta office managing partner.

2 Lean for Legal Staff Levantar – March 2012 Lean Guides for other sectors are available on our website e.g. Lean Office, Lean Manufacturing, Lean Engineering

3 This Guide includes the following pages? Why read Lean for Legal Staff? What will Lean Deliver? Lean isn’t… – Lean is… Waste & Value Add Respect for Others – Leadership Why is Lean Management important? How do you reduce Lock-Up WIP (Work In Progress) Looking for the 7 Hidden Wastes The 7 Wastes A Simple Waste example Finding the 7 Wastes

4 Why Read Lean for Legal Staff? If you’re reading this we hope you have a chance to read our published articles on Lean Management and Continuous Improvement in Law Firms. These can be found at Continuous Improvement in a Law Firm Continuous Improvement in a Law Firm (published late 2010) Bespoke Customer Service in Law Bespoke Customer Service in Law (published early 2011) In summary Seyfarth Shaw, the US firm, found that they could complete work between 15 – 50% faster, after implementing lean management techniques. Do they, Seyfarth, believe in this? In 2011 they set up a consulting firm to advise in-house departments on how to apply lean and manage outsourced work. Lean Consulting from a Legal Firm?Lean Consulting from a Legal Firm?

5 Why Read Lean for Legal Staff Lean Management helps you to produce your business outputs as fast as possible. The faster a business can convert a business enquiry to a finished output; then the lower its Lock-Up (WIP). Having lower Lock-up levels means you need less cash to run the business. Being able to produce work faster means You can do more with the same resources (software, people) – typically ~15% should be the aim. You can complete work faster than competitors Is reducing the cash required to run your business attractive?

6 Lean Delivers Lean is proven to deliver Increased Efficiency & Productivity - 15% more output with the SAME resources (staff, software, work space) Better Quality outputs (reducing re-work, duplication) Better on time delivery performance (stop chasing work!) Improved morale and employee engagement

7 What Lean Isn’t Lean, is in our opinion, an unfortunate name for what is delivered, Lean Management ISN’T About being SKINNY Isn’t about being MEAN Isn’t about cutting out people

8 Lean Isn’t…

9 Lean is…. “Lean” is the set of management practices based on the Toyota Production System (TPS). It has been applied in many sectors; engineering, manufacturing, call centres, banking, legal. By companies such as Toyota, Tesco, GE, Zara, LloydsTSB, NHS. - This guide is for those involved in legal departments. (law firms and in-house counsel) * One way of defining lean is in two parts: Eliminate WASTE and non-value-added activity (NVA) through continuous improvement. Practice respect for people. *There are guides for other business sectors and departments on our website

10 Waste and Value Added The opposite of waste is value-added, which has a special lean definition. In a process, an activity is “value added” if, and only if, these three conditions are met: 1. The customer must be willing to pay for the activity 2. The activity must change the output, making it closer to the end output that the customer wants and will pay for 3. The activity must be done right the first time.

11 Respect for People - Leadership “ Respect for people” is often harder to define. Lean leadership is about enabling and empowering people. Lean leadership is about helping people grow, allowing them to take pride in their work. Helping them and the business to continuously improve. Lean leaders recognise how a business operates. Lean leaders set targets for people, then spend time coaching staff to meet these. They spend very little time in their office. Lean Leaders see what is actually happening rather than managing KPIs and reading reports.

12 Why is Lean Management important? Lock-up - WIP SIMPLE 3 little letters WIP or Work In Progress; WIP requires cash. A client engages with you. You’re using your own cash to pay staff to open the matter; to decide upon what is required to provide the output, to decide on what information, knowledge, reports are required from which parties. Paralegals, legal secretaries, administrative staff then convert the information, reports, knowledge etc into the required outputs for the client. All of these people need paying. This takes more of the firms cash - All this happens often before payment is received from the client. If WIP is high or rising, we’ve used up more CASH e.g. we’ve converted more cash to outputs that we’ve yet to finish or sell. To keep the business running well need to get hold of more cash. In the forms of loans, overdrafts, investments etc. Bring WIP down and the amount of CASH required to keep the business running comes down. E.g. we can reduce overdrafts, loans, finance arrangements.

13 How do you Reduce Lock-up - WIP? Find the fastest way of getting from A to B. If A is client enquiry date and B is client delivery date then we want A to B to be a short as possible. The shorter we can make this then the less time we have to find cash for. Normally the shortest time to produce often comes out as the least cost, so we have to find less cash as well.

14 Looking for the 7 Hidden Wastes In any business there are a host of hidden wastes; these are the wastes that can’t be seen without searching them out. Everyone can see the wasted paper, wasted materials and scrap but what about wasted time, effort, thinking, physical activity? Lean people will try classify the “waste” in one of 7 groups.

15 Lean for Legal Staff – the 7 Hidden Wastes Read the next few pages. If you find the examples of Waste familiar – you will benefit from applying Lean in your Legal department.

16 The 7 Wastes Waiting Waiting for clients & other parties to send information in, reply to phone calls, e-mails etc. Waiting for internal information requests to be processed. Waiting for Royal mail post to arrive in the department each day. Waiting for work to be checked by other “interested” parties – senior partners (Quality Checks). Waiting for bills and invoices to be issued. Waiting for KYC checks to be completed

17 The 7 Wastes Defects and Rejects Incorrect or missing information from clients or other parties – meaning you have to go out for information for again. Calculation errors on billing and invoices. Paperwork Filing errors. Incorrect application of up to date legal knowledge. Delays in process due to rejects produced. Time allocated to matters incorrectly recorded.

18 The 7 Wastes Inventory The most obvious sign of inventory waste is high levels of Lock-up (WIP). Cases opened and worked upon but no final dates set for completion or billing. Cases opened but now inactive. High levels of consumables and paper kept – just in case. Large amounts of work in progress in cupboards, offices and on desks – often not tidy though.

19 The 7 Wastes Overproduction Often described as; completing activities before they are required. Individual Targets v Teamwork – drives staff to work on their own target as opposed to the business target. e.g. in conveyancing a team member working on a Buyers report for an exchange 3 weeks in advance of due date. On the same date another in the department is battling through 4 reports to be finished that day.

20 The 7 Wastes Over (Extra) Processing Work carried out by over qualified staff. e.g. senior Partner when Paralegal could be sufficient. ** Too many Checklists or Quality Checks. Product features not requested by the customer or the latest legal compliance. Stop & Re-starting work due to interruptions – phone calls, emails, other staff. ** Same can apply with clients where senior managers are relied upon for information that others could supply quicker.

21 The 7 Wastes Over (Extra) Processing Too many lawyers involved directly with the Client. Excessive time spent on legal activities. Confirming the same details by phone, email and letter. Too many meetings, conversations etc to define the outputs and process ; often after the price and inputs have been agreed. Having to re-contact clients, other parties to put make good errors or omissions.

22 The 7 Wastes Motion Searching for information in paper files. Searching for information in computer files. Searching through piles of files, held too far away from desks or in unorganised shelving. Sharing centralised resources. Visiting other areas for paperwork, quality checks, photo copying etc.

23 The 7 Wastes Transportation Unnecessary moving or handling of files. Travelling to/from client sites for meetings. Lack of use of appropriate electronic files and sign off e.g. mailing correspondence v Royal Mail.

24 A Simple Waste Example One department found that 40% of the inputs it received from clients contained errors or omissions. To correct these the legal staff had to call the clients; we know from our work in call centres that only 1 in 3 outbound calls is successful. By this we mean that 1 in 3 calls will find the person, who is able to take the call AND they have the right information to hand – how many times do you get “call me back” or the answerphone? Imagine therefore for every 100 matters being processed – this lead to 100 checks + 40 “re-contact the client” = 140 activities. These additional 40 activities slowed down the work coming through behind and caused Lock-up (WIP) to rise. The 40% of defects were accepted as normal – where else would 40% non-conformance be acceptable?

25 How Do We Find the 7 Wastes? Lean people call this “GEMBA” which translated means “go to the place”. We go to the place where work happens and watch, observe, listen – only then do we ask questions, mainly WHY? We’ll be producing another handout on GEMBA in the near future. If you need any information in the interim, contact us; Or call 01904 277007 or 0115 711 7007

26 Summary Occasionally you will read of 8,9 or even 12 wastes – we stick with the 7 for now. If you recognise the 7 Hidden Wastes in your legal company, office or department then investigating and implementing Lean Management practices will have a positive affect on your outputs. We’ve seen examples of the wastes in many guises and can help you begin to understand the impact they are having on your department, firm or in-house legal team. The 7 Wastes

27 Thank you for your time in reading this. As with all our work, it is subject to Continuous Improvement. If you have any feedback, thoughts or observations then send them directly to Mark Greenhouse,, Or call on 01904 277007

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