Tag Archives: lean law

Lean & Delayed Passports – Can your Law firm learn from it?

Delayed Passports – Can your Law firm learn from it?

Apologies if any one reading this have been hit by the “recent” (Summer 2014) delays in the processing of passports in the UK.
I’m hoping this post points you to things you and your firm can learn from it and how Lean Management can help your legal business.

Before we go on, let’s consider the current situation at the Passport service (as best as we can tell anyway);

  • They promise that a normal passport will be turned around in 3 weeks. Fast Track Service (1 week turnaround) or 1 day Premium turnaround service, both for at increased costs. They also tell us it takes 4 hours to process a passport from the moment you (the customer) supply all the paperwork, correctly filled in.
  • There is at least of a backlog of between 50,000 and 500,000 passports  – depending whose figures you believe
  • There are now regular stories of delays of 6,8,12 weeks – backed up by a picture of the distraught family members who missed their holiday

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What can we learn from this?

Firstly that the Passport Office is running normally at a process efficiency of 3.33%.

How do we know this? Easily, it takes 3 weeks to complete 4 hours work, they tell us this from their own webpages.

3 weeks is 120 hours (based on a 40 hour week).

4 divided by 120 = 0.333.  0.333*100% = 3.33%

Before you think that is poor, we tend to see less than 1% in organisations yet to try any Lean or Continuous Improvement work.

Secondly the Passport Office has discovered there is a Premium for Speed.

Go faster and you can charge more, not less as many would believe. A Fast Track Service (1 week turnaround) costs 42% more than the normal and the Premium (Same day turnaround) costs 76% more and for these two, YOU, the customer have attend their offices, thereby incurring more of your own time, yet you pay more.

The two questions here for your firms are

  • Do you know the process efficiency of your different legal services? try and work it out (it is simply hours recorded to a matter divided by the hours between the start date and the final invoice date; don’t forget to times by 100% at the end)
  • You might be surprised at how similar the figures are, across the same types of service.
  • Do you know the Premium for Speed you can charge clients? Is there one or will a faster service get you more of the business? so the premium here is being used for business winning.

Note: it probably doesn’t cost the Passport Office that much more to deliver the faster service – how can it? do they do better/different checks, use smarter people, faster computers, different paper?

Why has there been a backlog?
The cause appears to either be

A larger than normal application level for passports AND/OR a processing team with too few numbers to cope with the level of demand.

These might seem the same but how they manifest themselves and are dealt with can be different.

Take the rise in demand first;

Did it suddenly happen? in one day all these extra applications dropped onto the doormat of the passport office. I’d like to think that it took a little longer, maybe 2-3 weeks or even 6-8 weeks during which time every day the number of applications tended to be above what was normally expected. (in fact we are told it was an “unprecedented” demand)

Lets say it started to build at the middle of April and by the end of May the performance was considerably off target.

If they had been tracking daily, the new applications and completions they may have spotted the backlog rising much quicker and dealt with it sooner.

We can assume that the Passport Office either don’t record or don’t act upon information about the number of new applications they receive daily. (my betting? it’s the latter, data is nearly always recorded, rarely converted to true information AND used)

My questions are

  • how often do you track new and completed activity?
  • At the end of the month, in a quarterly review?
  • Do you review operational figures such as demand, completion or do financial figures take centre stage? noting that they are only ever a function of activity levels
  • or do you review new activity and completed activity daily/weekly?

In the case of the Passport Office I believe they could have done it even sooner e.g. by tracking web stats, how many visits to website where there each day? did that show an upturn even before the increased numbers of applications came through? probably.

What about the printed forms in the Post Offices, why have they not run out of them? Did they see a rise in demand?

These early, lead, indicators often exist but are ignored – Does your firm have any early, lead indicators it looks too?

The next area to tackle is this; even if they had been tracking new applications and spotted the increase they seemed not to know how many applications they could cope with in a set period.

The Passport Office seems to proves that if you have a set capacity e.g. number of staff, number of PCs, working a set number of hours – if you ask them to do more items of the same type, then queues will rise.

Do you know what the capacity is for work in your business and how queues arise? This could be for a particular type of legal file or back office support such as the disbursement processing or invoice production.

If you don’t know what work you have on the books or how long it will take to complete it, you could end up in similar state of affairs.

The only difference here is the Passport Office are paid up front for delivery, therefore there is a limited effect on cash flow.

If the work of a law firm takes longer, then WIP rises and the date payment is received gets pushed out and they need more cash on hand to survive.

The power of 1!
In spite of this backlog, in a normal year there is a chance that something will go wrong with passport processing and it will fail, no system is ever 100% when it comes to performance.

Now we hear and read stories of “local hero” MPs intervening and sorting out the issues – they haven’t. They’ve just caused another passport application to be pushed further back, whilst their constituents is expedited.

They are the equivalent of the client ringing up to demand you process their matter just as you have finished reading through another matter, ready to start that.

Instead of producing figures of how many passports have been processed in the correct time and the % success rate, the Passport Office appear to have been hung out to dry by the media ready to produce the sorrowful family, who played by the rules but have now missed out on that once in a lifetime trip.

Does this happen in your firm? one thing goes wrong, one person shouts up and all of a sudden a one time event becomes a large problem and the performance as demonstrated by the problem becomes the accepted reality.

Instead of looking at all the times something goes right we focus on the one time it fails. Things will always fail, what we need to know is the rate of failure an issue or just one of those events we can’t control.

The media and people love the Power of 1, the one event, the one time, the one person who bucked the system or for whom the system failed.

What are you trying to fix? Who are you focussing your resources on? the Power of 1? or on the things you are trying to get right every day in your organisation?

Lean Thinking has a host of Daily Management and Visual Management tools & techniques that can help you avoid the issues above, they are for another post though.
If you want to find out more about Lean management and Improvement in Law Firms 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.

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 and 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.

 

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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.

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