Continuous Improvement

How Toyota & Motorola Can Help You Reinvent Your Law Firm

June 30, 2012

Huh?  I can already hear you thinking, “Wait a minute.  I’m a lawyer.  I don’t make cars or widgets!  My ‘product’ is knowledge. I sell my time and my expertise. How can a strategy created by a company that mass produces cars, or mass produces anything for that matter, help me reinvent my law firm?  What do you even mean by reinvent? And why should I want to reinvent my law firm in the first place?”  OK, maybe you’re thinking some other stuff, too.  But I’m pretty sure thoughts like these are running through your head.

Let’s start with the questions about reinventing the firm.  By reinventing the law firm, I mean taking a serious look at ways to cut costs and improve your profits, while at the same time offering a higher level of client service than ever before.  OK, sounds interesting, but how are you supposed to achieve all those things?  Hold on. We’re getting to that part.

Next, let’s look at why you might want to consider reinventing your law firm.  The legal landscape is changing.  It has changed and will continue to change in the coming years. The changes aren’t little, incremental changes; they are monumental changes.

There is strong evidence that unprecedented changes in practice are producing a restructuring in the way legal services are delivered. These changes include widespread access to legal information, the routinization of many legal tasks, demands by clients for more control of legal service delivery, and the emergence of an increasingly competitive marketplace. This restructuring in the way legal services are delivered affects all law firms—regardless of size, geographic location, and substantive practice area—although it may impact different firms in different ways. Clients are seeking more efficient services, predictable fees, and increased responsiveness to their needs, and they are willing to replace their lawyers if they are not satisfied with the services they receive.

New York State Bar Association: Report of the Task Force on the Future of the Legal Profession, February 2011

The practice of law is not what it was ten years ago or five years ago or even three years ago. Pressures from an uncertain economy, the demands of clients, the phenomenal pace of technology and the never-ending search for more balance and more profits are creating the need for radical changes in how law firms are run.  Law firms that want to do more than merely survive in the years ahead should think seriously about how they operate.

That gets us to Toyota and Motorola and the strategies created by those two companies: Lean and Six Sigma.  Lean is a management philosophy borne of the Toyota Production System (TPS) shortly after WWII. (Actually, Henry Ford is considered the “Father of Lean” because of his focus on eliminating waste to speed up the production process.)  In the 1960s the TPS strategies were expanded beyond Toyota, and in the 1980s John Krafic (currently CEO of Hyundai Motor America) coined the term Lean.

In a nutshell, Lean is about continuous process improvement with a focus on: 1) Understanding exactly what the customer values; 2)Understanding the process of how work gets done; 3)Identifying which steps in the process add value for the customer and which don’t (waste); 4)Eliminating waste and consistently adding value for the customer.  Lean is about improving process flow and speed.

Six Sigma is a management strategy created by Motorola in 1986 and later implemented by Jack Welch at General Electric.  Six Sigma refers to an improvement process that seeks to eliminate defects (variations).  Six Sigma utilizes effective metrics and a specific approach called “DMAIC” (pronounced deh-may-ic) Define, Measure, Analyze Improve, Control.   The DMAIC approach provides a systematic approach to improvement.  While Lean is focused on improving speed, Six Sigma is focused on improving quality.

Lean Six Sigma combines both strategies in a common sense approach to continuous improvement.  Focusing on improving speed, while at the same time improving quality, makes Lean Six Sigma a powerful improvement methodology.

I’ll be writing a lot more about Lean Six Sigma in upcoming posts.  And, together with my colleague, Liz Lamar, I’ve launched a LinkedIn Group: The Law Firm Revolution: Lean Six Sigma for Law Firms, where we’ll examine the application of Lean Six Sigma tools and methodologies to law firms and the future of the practice.  If you’re on LinkedIn, join us! We think Lean Six Sigma can revolutionize the practice of law.

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