Category Archives: Lean Legal

Legal Process Improvement, Cola and Lorries

What do Legal Process Improvement, Cola and Lorries have in common?

Back in 1997, an established company, in a relatively mature market, looked outside of their industry for ideas on improvement.

They saw one which might just work and set out to learn more about it.

So it was that one cold January morning in 1997, a group of Directors from operations, finance, purchasing and distribution gathered, along with a group of experienced process improvement people.

Their starting point? a retail store where the customer (not the consumer mind, they are often different) bought the product they had selected to observe; a can of Cola.

They then traipsed from store, to the RDC (Regional Distribution Centre), warehouse to you and me, to the finished goods storage at the factory, the production filling line and ultimately the can production supplier.

At that time the whole process consisted of 150 “touch-points” which involved human intervention and they determined that the number of days from the start of the process to the end was 20.

These touch points may well have included paperwork handling, reporting, duplicated effort, dealing with re-work etc or finding the 7 Wastes that exist in many organisations.

All along the process the team was encouraged to ask WHY?

  • Why are products missing from the shelves?
  • Why does a sales associate need to re-sort products from roll cages that have just come off the truck from the RDC?
  • Why is so much stock needed in the back of the grocery store, at the Tesco RDC, and at Britvic’s RDC?
  • Why are there huge warehouses of cans waiting to be filled near the bottling plants?

The team had been encouraged to borrow and adapt Lean Management techniques to improve their product supply chain.

After improving the process the number of “touch-points” had been reduced by 2/3s to 50 and it now took only 5 days to move product from the start to the end of the process a 75% reduction.

Normally this is where analysis of the process improvement would stop, however consider …..

 The Cash Flow Effect #1

  •  You buy a raw material on day one. You are invoiced to pay for it 30 days later, on day 30.
  • You convert the raw material into a product, paying for energy, labour and transport, again often in arrears.
  • Now you sell your product on day 5, getting the money direct from the customer.
  • For 25 days or thereabouts you are sat on the money for the full value of your investment in materials, people, transport, energy + your margin

Any surprise that you decide that later that year you decide to go and develop your own bank proposition?

Which was the business in question?   It was Tesco who were understanding their Cola supply chain.

If you want to read more about this full story go to Teaching the Big Box New Tricks

What does Tesco Cola have to do with lorries and legal process improvement ?

Stobart Lorries

Who are one of their transport partners, who provide lorries? Eddie Stobart.

The same Eddie Stobart, who are now bringing “Stobart Barristers” to the legal market.

Before you dismiss them, note I’m not going to pass comment on the branding, or the marketing just the operating model here, consider that;

According the Stobart Barristers website there are normally 14 stages to the old way of conducting business with a Barrister via a solicitor.

Their new way, has only 4, a 60%+ improvement.

The new way doesn’t start till after the 5th traditional stage; okay the two process aren’t completely comparable but it would appear to be the closest stage.

They even state;

“We hate waste. We work hard to minimise non-productive time and maximise the utilisation of our fleet. It’s the same with the law – we think dealing with legal issues the old way is just wasting money.”

They don’t say how much quicker the new process is but if it has less than 1/3 the original interventions it really should be considerably quicker. Does a 2/3 reduction in “touch points” sound familiar?

They go on to state that “Compared to doing things the old way, most people find they save at least 50%!”

There is one interesting sting in the tail;

Under the traditional way the customer pays for the service after they’ve received it, they may in some cases pay part of the fee, part way through, with Stobarts they pay at the start.

The fee is fixed up front and the customer pays up front – in order to compete against this you have to consider how much customers like to know what they are paying.

In 2010, 25% of customer were surprised (negatively) by the price they had to pay for legal services *.

You also have to counter the claims of a quicker service; in an era where insurance can be arranged over the phone, mortgage applications tracked by sms, how can you improve your speed?

In 2010 again, 30% of deliveries of legal services were late or took longer than expected *.

The Cash Flow Effect #2

What are the odds that Stobart don’t get invoiced till after the work is completed by the Barrister and then it will be on 30 day terms – thus creating a handy positive cash flow.

Now where did I see that before?

If you want to find out if you have excessive multiple touch points then you can by clicking on this Lean Guide for Legal Practices & Departments you’ll be taken to our page which has a number of free articles and a guide on how to start a conversation in your business about finding the hidden wastes in your legal practice or department.

* – Ministry of Justice: Baseline Survey to Access the Impact of Legal Services Reform, March 2010.

About the Author

Mark Greenhouse has been working on the application of Lean management and process improvement in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Production Engineering. He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.

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Re-engineering the Business of Law

  • How can I apply resources more effectively?
  • How can I shorten cycle time?
  • How can I lower the cost of the service?
  • Whilst raising the customer service?

J.Stephen Poor, chairman of Seyfarth Shaw, in his article for The New York Times, financial news service DealB%k, offers that lawyers today should be asking these non-traditional questions to meet the changing demands of the buyers of legal services.

What experience do Seyfarth have in this? well if you’d like to read Continuous Improvement in a Law Firm , you’ll get an idea of the results they achieved through their SeyfarthLean program, within the practice.

Secondly, Seyfarth, now advise General Counsel in adopting these techniques read about it in Lean Consulting from a Legal Firm ?…

Stephen goes on in the article Re-Engineering the Business of Law, from DealB%k, to share three core lessons from the, Seyfarth, experience of change;

1. Be Prepared to Examine and Reimagine the Business Model

He talks of the use of Lean Six Sigma borrowed from the Lean Manufacturing sector, in his law firm. He mentions that this has resulted in various tools, analyses and process improvement techniques intended to drive efficiency into the delivery of legal services – at ALL levels of the business.

Free Continuous Improvement Guide for Legal Firms – is our free insights paper in which we examine the 7 Frustrations found in many law firms and departments.  Frustrations that lead reduce efficiency, hold back service delivery and increase costs.

If you have these frustrations then they will be wasting your time and effort.

The guide shows you what we look for and explores in more detail what improvement means for law firms.

We would add that if you have competitors doing things different, faster, cheaper than your organisation ask yourself

“What does the Customer see?” if they see the same service, the same output, how are you going to match it?

*We often use the word customer to replace client in our terminology.

If potential customers see both you and your competitor outputs as being the same, adding the same value; it might just be time to ask “How are they doing it, quicker, faster, cheaper?”

2. Don’t Settle for Half Steps

Process improvement is only part of the solution, it is never the complete answer. Seyfarth realised that trying to drive different behaviours would require them to address issues, such as associate evaluation and to re-examine their staffing models.

If you change how you do business it’s not unreasonable to realise you may need different metrics to measure it and different levels and numbers of skills within that business.

Stephen notes that “The point is not that our path is for everyone. The point is that the willingness to change and adapt business models must anticipate and address the variables that drive organisational success.”

He also makes the connection that “Marketing efforts are lovely; certainly, we all do marketing. But if one is to truly evolve a business model, the only way to avoid having it become simply a marketing effort is to recognise that it must drive through all parts of the organisation.” This is something that often change processes have failed to grasp, regardless of industry.

If you want to see our 2 page paper Legal Process Improvement v Marketing to see which has the greater effect on business performance then drop us a line , mark@levantar.co.uk or call Mark Greenhouse on 01904 277007.

3. Never Underestimate Resistance to Change.

“Never underestimate the resistance to change from lawyers”

Our experience tells us that every sector has its fair share of change resistors because you are dealing with people. Nonetheless these people have reasons and beliefs for not changing; our challenge and yours is to enable them to see what change is and why it is required and how they can contribute and shape it.

Stephen shares that they did “not anticipate the resistance from other crucial stakeholders – especially clients. Much of what we’ve done is most effective when deployed in a collaborative change process with clients.” This is based on the key learning that most of their clients are lawyers too, involving them in building the business case was critical.

If we can offer a tip here.

Many of your clients are working in organisations that have departments and personnel looking into improvement, many use lean or process improvement techniques. These people may not have made their way into the legal departments of your clients, why not invite them in?

His final notes could be applied to any sector;

“The nature of the process requires a continuous, but slow march toward improvement and adaptation. Some things we tried worked and some did not. Nevertheless, the continuous move forward takes persistence and, perhaps, a bit of stubbornness.”

Levantar have been promoting the use of Lean management tools in Law Firms, in the UK. contact Mark Greenhouse on 01904 277007 for more details.

Click on Lean Legal Process Improvement to find out more about the services offered.

About the Author

Mark Greenhouse has been working on the application of Lean management in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Operations Management . He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.


Venetian Warships, Faster Horses and Legal Firms.

When a US law firm wanted to find a way of becoming more efficient and deliver legal matters more effectively they turned to a set of techniques that have their roots back when the Venetians built ships at the Arsenale, techniques continued by Henry Ford, once he’d noticed his clients wanted faster horses.

Today that law firm is lauded as being “5 years ahead of every other AmLaw 200  firm” and now claims to deliver legal matters some 15 -50% faster than before. Not surprisingly this has driven down costs, driven up satisfaction and helped to secure new customers.

On the 6th April 2011 Mark Greenhouse of ResQ will be presenting to the Yorkshire Law Society on the techniques that can be used to improve the speed of delivery whilst reducing costs and how this will affect firm profitability and pave the way for true Fixed and Alternative billing to take place.

For details visit Yorkshire Law Society Continuous Improvement in Law.

If you’re not in Yorkshire and would like to find out more then drop us your contact details on info@resqmr.co.uk  and we’ll get back to you.

Thanks,  Mark

Lean Management & Continuous Improvement – Is your Law Firm ahead of this Organisation?

** You can get a FREE copy of our latest 2013 Lean Management for Law Firms  handbook by clicking on download** The original article continues below

Click here to download FREE Lean Legal pdf guide

The Association of Corporate Counsel has noted that the company in the article below is “five years ahead of every other AmLaw 200 firm” because of its Lean & Continuous Improvement programmme. The programme based on management principles already proven in many other sectors and departments to deliver;

  • lower costs, (increases margin)
  • faster responses, (improves cashflow)
  • better quality,
  • and improved customer satisfaction.

Get the article here; Continuous Improvement in Law Firms – LeanThinking in Legal Services (the article was first published in September 2010 in the Law Business Review).

Alternatively visit our new website at levantar.co.uk.

If they are five years ahead of US firms, what about the UK, do we have any organisations looking at this, who could claim to be five years into a lean thinking implementation within the legal sector?

We are presenting to the Yorkshire Law Society, on this subject in April this year.

Do you think that Lean Management programs will work in the UK legal sector be it, law firms or general counsel?

About the Author;

Mark Greenhouse has been working on the application of Lean management in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Production Engineering. He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.

Saving £m’s, charging £???

or You Are The Ref ! – The Legal version

It’s Thursday 23rd September and you are called by a client to provide a way out of a sticky situation. The client, a large northern based football team (soccer franchise, anyone?), has only a few weeks to repay its loans before they are called in by their bank.

Currently, the football club is up for sale for a figure reported to be at least £420m and prospective buyers may be in the wings. However if they wait till the banks call the loans in, they could potentially buy the football club for less than the price of its outstanding loans, which are reportedly £280m, a saving it would appear of at least £140m for the buyer.

The dilemma is that if the club debt is called in and the banks technically own the football club, the club could be deemed to be in administration and the rules of the sport appear to determine that the club would be deducted 9 points.

If the points are deducted the football club could find it difficult to retain the services of some of it’s key assets, the players, and could even be staring at relegation and a drop in its revenue, which at the moment can at least service the loans.

Other clubs which have stepped down in the league structure have found the revenue drop coupled with large fixed overheads and player salaries ruinous.  

Should the loans be called in on the 15th October, you have been asked to provide a legal defence, to prevent the application of the sports “administration” rules and prevent the deduction of the 9 points.

1) How do you charge (billing structure) for your advice? (bearing in mind you could find the answer in an hour, three hours or three weeks!)

2) How much do you charge? ( if your advice prevents the 9 point deduction it could head off the spectre of relegation and could protect revenue worth several £10’s of millions of pounds)

Any ideas, then drop a comment in the box below, we’d love to hear how you’d value the legal advice.

Never happen, you say?http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/09/why_rbs_looks_set_to_own_liver.html it might do!

(Ask about Lean Principle #1 if you’re wondering what a legal pricing question is doing on a lean blog. )

Continuous Improvement in Legal firms

“Doing a better job, in a shorter time, makes customers more satisfied. The more satisfied a customer is, the more they will recommend you to others and be prepared to look to you again for future solutions”

If you find the statement above agreeable and yet also believe that “Value Billing” or other alternative fee arrangements in the legal (or other professional services) sector could mean that revenues and profits will be reduced, then one solution that has been used in the States could be of interest.

The Association of Corporate Counsel has noted that the work conducted by one company in the article has put it “five years ahead of every other AmLaw 200” and led to them being able to cut the cost of providing services by up to 50%.

The article, which is entitled, Continuous Improvement”  (in legal firms)

click the article title to access the pdf, or as we knew it internally here “Improving Legal Firm Efficiency: 5 Management Principles”, was written by ourselves and published in the September 2010 edition of the Law Business Review magazine and it explores the dramatic results of applying Lean Thinking in a law firm.

Note: Law Business Review don’t have a copy of the magazine available on the web, this is the only place you can get a free copy of this artice from the magazine. If you want a copy but have problems downloading it then contact info@resqmr.co.uk requesting a copy and we’ll send it on.

If you would like to explore how this form of Continuous Improvement can work in your legal (or other professional services) organisation then drop us a line info@resqmr.co.uk

The website for the magazine, who kindly published our insight, can be found at LawBusinessReview.co.uk and it is published by LexisNexis and covers a wide range of business issues and typically contains 6 core areas; Business School, Client Focus, Skill Development, International Business, Future Knowledge and Risk Management.

Other sources we used for this research include:

www.leanlaw.net by Mark Jackson

www.troubleahead.co.uk by Michael Scutt

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About the Author;

Mark Greenhouse has been working on the application of Lean management in Legal and design led Manufacturing companies for the past 5 years. His own Lean journey started back in 1988 when he started study of Production Engineering. He’s applied lean in many organisation types, finance, call centres, banking, FMCG etc. Mark also provides lectures on operational management at Leeds University Business School.