Lean techniques can help you identify inefficiencies in your processes. Jo-Anne Wild presents a beginner’s guide to lean techniques and how to apply them in your own firm
Lean has its roots in manufacturing, which has influenced its jargon, tools and techniques. However, it’s not always easy for law firms to translate these tools and techniques to suit them. For this reason, lean thinking has struggled to take hold in the legal industry, and we’ve come across numerous examples of failed lean projects. Often it’s seen as a panacea for reducing costs and improving customer satisfaction, but fails to deliver.
Thinking of the firm as a whole system will help ensure that improvements are not siloed
When explaining lean, we refer to it as ‘advanced common sense’. Lean was initially developed by Taiichi Ohno, a manager working for Toyota. He used his understanding of production, and the insights he got from observing the work in action, to develop principles around how to improve processes and reduce waste. He also used his ability to collaborate with his colleagues to ‘get stuff done’. The advantage for law firms today is that they have numerous resources that will help. This is a blessing, but also a curse.
Lean provides a framework to support process improvement, but it is not a panacea. Firms must take a holistic view and consider people, processes and technology together. Thinking of the firm as a whole system will help ensure that improvements are not siloed, potentially causing problems in other areas.
Lean is also not a one-size-fits-all approach: what works for one firm may not work for another. In the projects we run for firms, we take the time to understand the work, and we speak to the people that do the work, as ultimately, it’s they who can change it.
So how does lean work, and how can you apply it in your firm?
How to avoid failure
The first thing to say is that change takes patience. Lean projects often fail because of unrealistic expectations of the change process.
Process improvement is tough: quick fixes rarely provide sustainable results. Typical phases of lean transformation follow a predictable pattern: an initial dip in performance, followed by rapid improvement, which will then slow down and level off.
The important thing is to test and learn, stay focused on the outcomes, and not be afraid to undo what you have done
The initial dip in performance is often due to several factors. Changing processes will upset the status quo; people will resist change; hidden or unintended consequences will materialise. This is a period of adjustment for everyone. During this initial dip, senior managers must be supportive and understand the bigger picture. This is where many lean projects stop: managers lose their nerve and go back to the ‘old ways’.
Process improvement has some element of experimentation; not all changes will make things better at first. The important thing is to test and learn, stay focused on the outcomes, and not be afraid to undo what you have done.
If you are doing the right things, performance will start to improve, but then those gains start to slow down and level off. At this point, you will need to go back to the beginning and start the lean process again: this is how you strive for perfection.
Resistance to change
People resist change, and you already know who in your firm will be most resistant. Dealing with this is a skill, and one you’ll need to master if you want your lean project to be a success. Below are our top tips.
- Involve people: help them define the problems and the solutions.
- Help them see what’s in it for them.
- Involve them in your test-and-learn experiments.
- Treat them with respect – communicate at all stages.
- Engage the leadership – they must support you when the going gets tough.
- Choose your battles: focus on the important stuff.
Essentially, lean is about considering your firm as a whole system: people, process and technology. Below is a summary of the important lean principles.
- Focus on effectively delivering value to your customer.
- Improve the value stream by eliminating all types of waste.
- Maintain flow.
- Pull through the system – start new work only when there is a demand.
- Strive for perfection.
1. Focus on delivering value
In lean terms, value is making or providing something that people want and are prepared to pay for. Value is always defined by your customers and should be considered from their perspective. We separate value into value-add and non-value-add – the latter is known as waste.
The value stream is all the steps it takes to deliver a service to a customer, from the start to the end. Identifying the value stream is critical to understanding both the value and waste. Value stream mapping is the process of visually mapping out all the process steps, so that value and waste can be identified easily.
2. Eliminate waste
The principle idea of lean is to ruthlessly reduce or eliminate waste. Waste is defined as anything that does not add value from the customer perspective. Generally, lean identifies eight areas of waste. One way to recall them is to use the mnemonic TIM WOODS.
This is the act of transportation eg carrying a document to someone for review or rework. Examples in law firms include:
- retrieving files
- excessive filing
- multiple hand-offs of documents for approval.
This is usually work waiting to be processed. Inventory develops as a result of poor workflow and unbalanced workloads. Examples include:
- over-ordered stationery
- enquiries, complaints, or information requests waiting to be answered
- unallocated work
- files stacked on desks, in corridors or in spare offices.
This typically relates to people moving around, and can apply to searching for electronic files. It can often be related to poor office layouts. Examples include:
- walking to a printer, filing cabinet or other resources
- going to meetings where decisions aren’t made
- making phone calls to chase information or people
- flicking between screens when using multiple computer systems.
This is time lost waiting for something to happen, including:
- waiting for people to turn up to meetings on time
- not having the right people at meetings
- waiting for information, eg from clients or third parties
- slow computer equipment.
Overproduction of goods or services wastes time, usually time that can’t be billed. Examples in law firms include:
- too many people in meetings, or working on the same task
- preparing documentation in advance, or reports that no one reads
- printing documents ‘just in case’
- preparation or research that has already been done
- copying emails to everyone.
Overprocessing rarely changes the value of a service. Examples include:
- long emails, when a short call will do
- entering data on to systems that’s not needed, or repeatedly entering the same data
- too many approval steps or manual interventions.
Defects usually mean that work needs correcting or rejecting completely. It leads to poor customer satisfaction, unbilled time, fines or lack of trust. Examples include:
- documents being misfiled, physically or electronically
- using the wrong forms
- data entry errors, causing poor data quality
- mistakes on bills.
This is about underutilising people’s experience, skills and knowledge. This often happens in large firms where managers are not aware of employees’ backgrounds. Examples include:
- limiting people’s authority or ability to take responsibility for basic tasks
- asking partners to work on tasks that could be done by others
- using software without adequate training
- poor delegation.
3. Maintain flow
By eliminating the inefficiencies introduced by waste, your aim is to make the work glide, or ‘flow’, through the firm. Flow is created by removing waste, standardising work and stabilising processes to create predictable results. Imagine a conveyor belt: work comes in through the front door, and moves through the firm, flowing continuously without delay, until it’s complete and delivered right, first time.
4. Pull through the system
Pull systems control the flow of work. In a business with a pull system, people only start new work when there is a customer demand. Think about ‘just in time’, not ‘just in case’. Making work queues visible allows individuals to pull their next task if they have the capacity to start working on it. Pull helps with prioritisation and prevents teams from overloading.
5. Strive for perfection
Perfection is a never-ending journey. The process of creating products and services that provide value should never stand still. If you don’t move forward, you begin to move backward.
Some processes are easy to understand, especially if they are transactional in nature. Others are more complex and feel tailored. Our advice is to build your confidence by starting small with a process that is easy to understand: practise the skill of lean improvement, test and learn. Then gradually start to tackle the more complex processes.
Below, I outline four key steps in a lean project.
1. Where are we now?
This step is necessary to help you understand the current, ‘as-is’ position. You must understand the wastes and problems in order to move on to decisions about what improvements to make.
Start by asking: what problem are we trying to fix? This question helps you to evaluate the problem and set scope boundaries, thereby ensuring the scope isn’t too broad or unmanageable. As Albert Einstein put it: ‘If I were given one hour to save the world, I would spend 59 minutes defining the problem and one minute solving it.’
It’s helpful to write down a problem statement to ensure everyone understands it, and will therefore be aligned to the outcomes. In our workshops, attendees often find this very difficult. Below are some guiding principles for a good problem statement.
- Don’t address more than one problem.
- Don’t assign a cause or blame.
- Don’t offer a solution.
Ensure your problem statement is SMART (specific, measurable, action-oriented, relevant and timebound).
With the problem defined, you can now move on to understanding what is currently happening. There is no substitute for seeing the work as it happens, so go and look for yourself. Take pictures or videos using your smartphone. Start your process map, draw pictures: use whatever technique you are comfortable with.
During your observations, capture data, maybe in a spreadsheet. To help you decide what data to capture, use the problem statement. Time each step of the process – and be precise, don’t guess. Supplement your observations by interviewing people doing the work, either individually or in groups. Try to avoid speaking to managers – their insights are often skewed by what they think should happen, and not what actually happens.
For each process step, ask three questions.
- Who are the suppliers, internal and external?
- What are the inputs and outputs?
- Who are the customers?
Now you’re ready to do some value stream mapping. Get together a group of people from across the whole process – you need to ensure every stage is represented in the room.
We’ve heard partners and managers exclaiming, ‘I didn’t know we still did it that way, I thought it stopped years ago’
Value stream mapping can be done in many different ways. We would suggest using brown paper and sticky notes. Start by sticking brown paper up on the walls as a background. Next, work together to write up sticky notes to represent each step in the process, in order. Add additional information to illustrate where the pain points of a process are. The result is a rich picture and a high-level view of the process. This process map will give you all you need to identify the value stream.
Next, go through the map identifying all the steps that either add value or enable value. Mark them with a coloured sticker or highlighter. Then take a second look through the map and identify the ‘waste’ activities. Mark wastes with a different coloured sticker or highlighter.
Reviewing the map with a group is powerful on its own. Discussions about why things are done the way they are often provide valuable insights that lead to real ‘lightbulb moments’. We’ve heard partners and managers exclaiming, ‘I didn’t know we still did it that way, I thought it stopped years ago’.
Before you move to step 2, you may need to delve a bit deeper to clarify any areas of uncertainty. You may need more data or to do a ‘root cause analysis’ to understand defects or bottlenecks. Use tools like ‘5 whys’ to help. It works by asking a repeating series of ‘why’ questions until you get to a root cause. Let the data tell the story, and base your decisions on facts.
2. Where do we want to be?
Armed with a solid understanding of what’s happening, you’re ready for step 2. This is where you define your vision and design your ideal future state. What would the ideal future process or service look like?
Start by generating ideas for removing the wastes identified in step 1, and making the process flow.
- Enlist the opinion of a ‘critical friend’ – someone to look with fresh eyes.
- Test your assumptions, check the data and revisit the work.
- Ask ‘what’, ‘why’, ‘when’, ‘how’, ‘where’ and ‘who’ questions to define the detail of removing wastes.
Use the ‘start-stop-continue’ technique: list the things that you should start doing, those you should stop doing, and those you should continue doing because they work well.
Identify elements that should be standardised. Standardised work is the linchpin of a lean system. Where there is no standardised work, there is no process discipline, team member accountability, reliable data or continuous improvement. For any standardised process you implement, make sure to train the relevant staff on it effectively, or it will never be implemented and maintained properly.
Having reviewed the ‘as-is’, and generated ideas for the future ‘to-be’ process, you now need to create a new map. Use the same mapping techniques as before and streamline the process, excluding all the wastes you’ve identified. Removing large parts of a process is not unusual when you really understand the value stream.
In creating your ‘to-be’ process, you must make what’s left flow through the system. Information and work should come into the firm in ways that ensure activities are done in a continuous flow until completion.
Use pull techniques so that nothing is done by an upstream process until a downstream process signals it. You will need to decide how pull triggers are handled – either through software or using visual cues.
3. How are we going to get there?
With the ‘to-be’ state mapped, you will need to plan the transition. It may not be possible to change everything all at once, and you may take different approaches to get there.
Break the plan down into smaller stages. Prioritise what should be done over the short, medium, and long term. Deal with the quick wins and iterate.
You may want to make several small changes during regular short periods, where you can test and learn from the results. Sometimes things don’t work as expected, so expect your plans to change.
4. Strive for perfection
Perfection is a never-ending journey, which means you should revisit your processes repeatedly, regularly fine-tuning, tweaking and experimenting until they are as perfect as possible. This is continuous improvement. This means that with any process, you are aiming to get to step 4, only to go right back to step 1!
There is no magic bullet for service improvement. Lean concepts are generally common sense, but they should be applied knowing that behavioural change is difficult. Only with the right approach, support and time can organisations create new behaviours and habits.
If you’re interested in lean, you can find out a lot more online. Tools such as ‘5 whys’, ‘5S’ and SMART will be useful to law firms. However, many were developed to address specific problems, some related to manufacturing. Our advice is whenever you choose a tool, ask yourself: why am I using this? What problem is it trying to fix? Do I have the same problem as the person that created it?
Below are our final tips for success in lean projects.
- Observe the work as it happens – understand and ask ‘why?’.
- Treat people with respect – communicate at all stages.
- Standardise as much as you can – and train employees on those standards.
- Get stuff done, create momentum and never give up.
- Strive for perfection.