General counsel can try and reduce costs by demanding discounts or alternative fees from their outside counsel—but at the risk of pitting their own interests against those of the firm. An alternative could be collaborating with outside counsel to streamline processes so legal projects get done more efficiently and at a lower cost.
To that end, Parker Poe Adams & Bernstein is the latest firm to try out Lean Sigma management techniques, originally deployed in the manufacturing industry, for delivering legal services.
Seyfarth Shaw was an early adopter almost a decade ago. Clifford Chance has instituted firmwide Lean Sigma training, even publishing a white paper about the firm’s experience applying “continuous improvement to high-end legal services,” and other firms, including Ogletree, Deakins, Nash, Smoak & Stewart and Reed Smith, have instituted training for key firm leaders and staff.
Six Sigma was developed in the early 1980s at Motorola and then championed by former General Electric CEO Jack Welch for continuous business process improvement. A separate approach, “lean manufacturing” was about improving project management. The combined techniques are commonly referred to as Lean Sigma.
Several Parker Poe partners invited some of their top clients late last month to a two-day training workshop in Legal Lean Sigma at their Charlotte headquarters. (The 200-lawyer firm opened an Atlanta office, its first outside the Carolinas, last year.)
All told, 42 people, including in-house lawyers from five client companies, participated in the workshop, which was run by Catherine Alman MacDonagh and Timothy Corcoran at the Legal Lean Sigma Institute.
One partner, Keith Weddington, said it wasn’t a tough sell for the two clients he invited, despite the time commitment.
“In the post-recession economy, legal departments have been pressed by financial departments to do more with less—and to increase efficiency and predictability,” he said. “It struck us as a way to meet our clients where they are.”
Peter Barr, the GC of Rack Room Shoes, said he was quick to accept the invitation from Weddington, his relationship partner at Parker Poe, even though it took a full two days from his week.
“When you are in-house, a lot of what you do is project management,” said Barr, who oversees a staff of eight, including four other lawyers. “I thought it was a good opportunity—and I didn’t have to pay for it.”
“The thing I found most intriguing about this,” Barr added, “is what you’re doing is using these process development tools to look at legal work … and figuring out how to make it more cost-effective and efficient so the law firm still has a profit and we get to reduce our costs.”
That’s more appealing, he said, than imposing alternative fees or discounts. “I think this holds more promise for finding ways to do things at a lower cost that is sustainable for the law firm as well,” he said.
Earning Their Belts
Weddington, who practices employment law, said one inefficiency that can chew up time and money is excessive back and forth with a client to get more information.
Barr echoed that point, saying outside lawyers might spend a lot of time collecting information for something that his team could procure more quickly. “I can walk down the hall and get it from someone—if I understand what I need to be collecting,” he said.
The Lean Sigma training provides a “step by step process to go through when you look at a project or a process that you’re trying to improve,” Barr said.
“It’s hard to squeeze this stuff in between the fires and the other demands,” he added,” but it’s got a path to follow that makes it easier to do.”
Lean Sigma gives the client and outside counsel tools to “break a project down into granular steps and identify who is doing what piece,” Weddington said, whether drafting a contract, handling a lawsuit or providing advice or analysis.
“It forces us to communicate. That’s what a lot of this is,” Barr said. “It’s a structure to force communication that isn’t about blame but that is about process—and figuring it out on the front end.”
“There is never just a smartest guy in the room. The room is the smartest person,” he added. “This is a structure to help you get everybody’s input to make the room as smart as possible.”
Adherents can advance through levels of Lean Sigma training, earning different colored belts (white, yellow, green, black and master black belts), as in judo. Parker Poe lawyers and their clients earned yellow-belt certification for their two days of training.
Barr said he received a book on Legal Lean Sigma and project management—but no actual yellow belt. He did ask for one though.