The reach of lean may be ever growing, but legal services are still mostly uncharted territory. It may therefore come as a surprise to know that a law firm in the United States has been working with lean for eight years, leading a revolution in the sector. Can it also redeem the image of lawyers? Roberto Priolo reports.
Seyfarth Shaw started its lean journey in 2005, when clients began to ask the firm to introduce alternative fees. Specifically, they wanted to pay a flat rate per piece of work rather than being billed the traditional way, by the hour, or in more recent times, “by the minute.”
Lisa Damon, a Boston-based partner and day-to-day leader of lean efforts at Seyfarth Shaw, explains: “While looking at alternative ways to bill our clients, we realised that there was no point in trying to figure out how long a certain job would take and, therefore, how much we should charge for it. We had no reliable way to track or measure that, nor did other law firms. First we had to step back and understand whether we were working in the most efficient and best possible way.”
In the attempt to find a process methodology that could be applied to and work in a legal setting, the firm started to visit clients such as Caterpillar, Motorola, and DuPont. The leaders of legal departments in these companies were some of the people starting a revolution in the practice of law, a revolution that the firm has since helped to spearhead.
DuPont’s general counsel, Tom Sager, is one of the earliest adopters of lean in a legal department. He proved a critical figure in Seyfarth’s transformation.
Damon continues: “Tom told us right away that we couldn’t treat this like a traditional law firm initiative. He warned us this would be the hardest thing we would ever do institutionally, and explained that it needed to be driven unflinchingly by leadership.”
Seyfarth’s leadership took Sager’s advice, and committed to making lean the new path for the firm. The first thing the firm did was to hire Six Sigma Academy (now SSA & Company) to migrate and adapt some of the lean six sigma techniques and principles to a legal environment.
With the help of Six Sigma Academy, Seyfarth’s leadership tried to figure out what lean in a law firm would look like. What the organisation decided it needed was a completely new way of delivering law: instead of measuring success by the number of minutes they worked, Seyfarth would let its clients define success. The law firm’s role would be to design more efficient solutions to the delivery of legal services.
The shift would be both sublime (some individual lawyers are inherently “lean” in their approach) and monumental (in terms of consistency across hundreds of lawyers, changes to systemic business operations and differences in legal practice specialties).
“We came out with much more focused tools, a very heavy emphasis on Voice Of the Client [VOC] and a way to incorporate data analysis in our daily lives. It was a completely new way to look at things,” Damon says. Those initial steps would result in the creation of a new client service model, SeyfarthLean. According to the firm, SeyfarthLean “combines the core principles of Lean Six Sigma with robust technology, knowledge management, process management techniques, alternative fee structures and practical tools.”
Training and education were a key part of these early efforts. It wasn’t just leaders who attended the initial Six Sigma Academy green belt courses. Thought leaders among the firm’s partners played a vital role in supporting the spread of lean across the organisation, too. Damon comments: “We included those partners who had responsibilities in the areas of the businesses where we thought lean could make a difference. They were able to use lean to drive truly extraordinary results around the business, allowing us to show from the very first green belt class the real, tangible difference lean could make.”
According to Damon, it has always been the clients’ overwhelming response to pull the firm towards lean. Even when a partner is sceptical about the value of the methodology, a client’s enthusiastic request to hear more about it is normally enough to have that partner on board.
The fact that Seyfarth doesn’t have any other law firm to draw inspiration from or benchmark against is “freeing,” Damon says. “We look at many clients who have lean in their companies and we are driven forward by them. If you think about it, as a service provider this is a wonderful place to be because it’s the voice of the customer driving you directly, at all times.”
It is the relationship with clients that fuels Seyfarth’s lean journey, and the individuals the firm works with that shape the way it implements the methodology: people like Ken Grady from footwear manufacturer Wolverine Worldwide, Gary Chadick from communications and aviation electronics company Rockwell Collins or David Allgood from Royal Bank of Canada are, according to Damon, “visionaries” who left an indelible mark in Seyfarth’s approach to change.
Another “bedrock relationship” for Seyfarth was the one with United Technologies. “Our relationship partner was someone who really understood the UTC business and its Achieving Competitive Excellence system, which looks and sounds a lot like lean. In 2008 he se t up the opportunity for us to show UTC’s legal department our work. I remember how electric it was in that room, as they recognised what we were doing was directly in line with what they were doing,” Damon recalls.
Over the next few months, the two organisations began to align their strategies, until UTC turned around and gave Seyfarth the chance to experiment with their operations all over the United States (except for Connecticut, where UTC already had a provider). “We have been working with them hand in hand to take an entire portfolio of work and use lean principles to deliver it in the best possible way,” continues Damon.
Lawyers don’t enjoy the best of reputations. They are often perceived as money making machines (the billable hours system doesn’t help, as it can incentivise inefficiencies at times). Maybe that’s why one could be slightly taken aback upon hearing Damon talk about doing more with less or about helping client’s legal departments improve their operations (like Seyfarth does through its consulting business).
When asked whether this was not against the firm’s interest (if legal departments become more efficient, it’s fair to think organisations will not need external help as much), she chuckled and replied: “If you delight your clients, they will give you more and better work. When we go to an inhouse law department, help them solve a problem, and leave them in a better spot than we found them, we know we’ll end up benefitting. We may lose a piece of work, we may not get paid as much, we may even not get engaged at all, but in the long run clients will come back to us.”
Hardly what you expect to hear from a lawyer.
It’s not that much of a surprise, however. Lean, Damon says, turns the whole legal system on its head.
“You are used to calling your lawyer and telling them what the problem is. If it’s your lawyer calling you, they are most likely trying to sell you something. Lean changes everything: as your lawyer I am sitting in the room with you and asking you how I can help you and what you need from your law firm,” she explains.
According to Seyfarth Shaw, client needs are everything. During a client meeting, partners will sit next to what are known in the firm as “legal technology solutions architects,” IT experts that listen to what the client needs, go home and create it. “They stand in the client’s shoes, and wonder what could work for their particular situation, what they can design,” Damon continues.
Technology contributes greatly to the success of Seyfarth. Clients, for example, have constant access to data via SeyfarthLink, a “client collaboration and portfolio management” system to monitor progress and cost of a specific legal matter or group of matters.
Online process maps connect with templates and tools used in a specific legal process, such as commercial litigation. The firm has mapped nearly 200 various legal processes. Custom technology solutions have included the use of mobile technology, such as an app to speed decision-making and tracking of global trademark prosecution efforts.
Another example of how IT supports the firm is the Seyfarth Scorecard, a system that collects data from clients on the company’s performance, which is shared with firm leadership and the team serving the client. The Scorecard information gathered is then used as the basis for client interviews, lessons learned sessions and client service improvements. It also serves as a component of compensation discussions, in general review of partners’ work.
Damon says: “While it has been very successful, the scorecard would not stand on its own. It only provides the data we need if coupled with intense VOC exercises and lessons learned sessions.”
STILL A UNIQUE SYSTEM
The introduction of lean has allowed Seyfarth to achieve great results. The firm was able to reach a level of 20% revenue coming from alternative fees in 2011, and the 18-member Legal Project Management Office team’s client-facing time went from 20% in 2010 to nearly 100% in 2012.
Clients greatly benefitted from the new approach Seyfarth implemented. A national defence contractor saw fees reduced by over 30% compared to the prior firm to manage its national portfolio of single employment cases, while a global manufacturer improved its trademark prosecution productivity by 22%.
One would think these results would encourage other law firms to follow Seyfarth’s example. This was the case for a while. “We started off, and pretty soon we heard other firms were getting into it. However, because lean is so hard and promotes transparency, many got off the bandwagon very quickly. Instead of jumping on lean, the industry started to teach lawyers project management,” Damon explains. “That’s a good step, but we believe that it is scratching the surface.”
What’s Seyfarth’s secret, then? How did it manage to keep going? According to Damon, it’s by focusing on the control function, the C, in the DMAIC improvement cycle. She says: “Because lawyers are so incredibly busy, keeping the team focused is a necessary element. We have learned that without that control function things tend to go back to the way they were. It has become what differentiates success from lack of success for us.”
Maybe another way to practice the law does exist.