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How to Make Your Legal Department More Efficient

To improve the efficiency of the legal department, corporate lawyers should first ask themselves "Are we doing the right things?"  (see the companion post for more on this) and then focus on doing those things correctly

Man Carrying Lots of FoldersFrom years of work with legal departments at some of the world’s biggest companies, we see that true legal department effectiveness starts with doing the right things.  And, in that sense, productivity comes before efficiency, which we cover it in the companion post Six Ways to Improve Legal Department Productivity. But once you know you’re doing the right things, how can you ensure we’re doing them right?  Can you simplify the process?  Can you finish faster or with less effort?  Can you be more efficient?

Lawyers aren’t conditioned to ask these questions, at least in part because hourly billing is no friend of efficiency.  But we see in-house lawyers striving for efficiency more and more as workloads expand and resources remain stagnant.

Below, eight ideas on improving legal department efficiency – i.e., doing things right. 

The List of Eight

  1. Process, exploded: For an operations executive, the first intuition upon encountering a new process is to write down every step and understand it in detail. The second intuition is to blow it up and make it better. Lawyers rarely do step one, which makes step two unlikely.

    The first and most important move in developing a sense of efficiency is a habit of mind: see your activities as processes, because they are.  Write them down; make a flowchart, or a cycle, or a punch-list. The second move is to be dissatisfied with what you see, and to believe it could be simpler, faster and better.  Without seeing activity as process, and being willing to make it explode, efficiency gains just aren’t going to happen.

  2. Process enhancement techniques: There are many approaches to process enhancement, and your company may subscribe to one or more of them.  Six Sigma and Lean are two of the most common, but there are others.  All of them are cousins, and while you may come across a few operations staff in your company with a near-religious devotion to one or the other, the truth is they all have a few key ideas in common.  Here are some of the ideas that legal departments have found most helpful:

    • Huddles: Employees – particularly those at the base of the pyramid – are often quite aware of the inefficiencies in their environments.  The best manufacturing environments learned a long time ago to create a regular forum for employees not only to identify inefficiencies or quality problems, but to take immediate action to fix them.  Periodic “huddles” in which employees quickly check in and identify any issues in their operating environment can form the foundation for widespread efficiency improvements in departments of any size.

    • Process mapping: As mentioned in Path #1, law is more process-driven than we appreciate.  Many companies have lopped hundreds of hours off of their securities filing processes, for example, by mapping the sequence of steps, how information flows from the business to Finance to Legal and elsewhere, and making sure there is no re-work and no redundancy of effort.

    • Step elimination: It’s rare to create efficiency simply by doing something faster, and it’s hard to create efficiency by doing it better.  The greatest efficiencies are always gained by not doing something at all, usually because the step just doesn’t deliver enough value, or because a different process can be followed that makes it unnecessary.In any efficiency effort, the goal is to have as few steps as possible while still creating a product with all the critical characteristics.

  3. Leveling: When you visit your doctor’s office, you expect to see a doctor.  Not because a doctor is always necessary but because, well, it’s a doctor’s office. Just so with clients – they expect to talk to a lawyer. This is the source of much mischief, since clients can be kept waiting on a simple request because the lawyers aren’t available to look at their question right away. The most efficient departments look for every opportunity to scan client communications immediately for matters that can be handled by support staff or paralegals.

    Further, for the several major processes in the department, activities are mapped out according to level – pushing paralegals and support staff to take on the highest-complexity activities they are capable of, and equipping them to know when to bring a lawyer into the mix.

  4. Clients: Legal efficiency isn’t just about the legal department.  The efficiency of a process often depends on the effectiveness of clients in providing information to Legal and handling the work product they receive in return.

    The most effective approaches to legal department efficiency look at the whole process, asking whether clients can be equipped to handle more of their legal issues independently, submit materials to Legal in closer-to-final form, or to have a better sense of exactly when and why to come to Legal to begin with. The most efficient legal advice happens at just the right moment, but the client is usually in control of when it happens.  Some of the best approaches to efficiency are very targeted client education efforts.

  5. Knowledge management: Legal departments and their law firm networks collectively possess thousands of pieces of existing work product, and in that haystack lie one or two needles for every new matter that comes along.  If we can find them, we’ll work faster and in many cases the work will be better than if we paint on a blank canvas.

    Our research has shown that departments with strong knowledge management practices are a little bit better at nearly everything – check out page 34 of this study.  Which is good.  But like all good things, it doesn’t come easy.  Good knowledge management is really about knowledge sharing, which takes effort.  There’s no simple way to curate and share information, though some new technology platforms can make sharing a lot more intuitive and easy to do.

  6. Legal process outsourcing: If the idea of a legal process outsourcer (LPO) conjures images of a hundred lawyers in Bangalore grinding through dozens of contracts a day – well, that’s one piece of the picture, but not nearly all of it.  In the first decade of their existence, LPOs have shifted massive amounts of legal work from the largest departments and most document-intensive matters into a highly process-controlled environment where the work could be done at a fraction of the cost a law firm would incur.

    In that first decade, LPOs have built not only a network of lower-cost lawyers, but a deep expertise in process design and execution.  That process expertise is the asset they now bring to bear for the “middle market” of companies that are neither oil majors nor Wall Street fixtures.  Where previously a legal department was “on its own” to analyze and re-constitute an inefficient or broken process, many LPOs now have the ability to fix a process and then implement an ongoing solution at less expense than before.This is happening for things like NDAs, recurring settlement agreements, contracts, and other repetitive areas of work.  As the LPO marketplace matures, we expect more efficiency opportunities to come from vendors that look nothing like the law firms where our careers all began. 

  7. Tiered service levels: All legal departments are committed to providing high quality service, and that’s not always a good thing.  They’ll spend time fixing something because it can be fixed – not because it’s truly important.  Sometimes they need to provide the Platinum car wash, and sometimes Silver will do.  Often, clients are very happy with Silver if it’s faster and easier – but you should set those expectations in advance.

    We’ve seen several legal departments enhance both efficiency and client satisfaction by establishing a system of tiered service levels.

    One company defined three different levels of legal and compliance support offered to different regions of a global company; another created five different levels of review to apply to different types of contracts.  The key is to be explicit about what’s in each tier, so lawyers don’t have to constantly make judgment calls.  Support staff can ensure that the right work goes to the right place, and lawyers can focus on the higher-complexity tasks.

  8. Focus: Humans aren’t just bad at multi-tasking; we literally can’t do it.  Our brains, like processor chips, only do one thing at a time.  Unlike processor chips, we’re also terrible at switching between tasks.  Studies have found that once we’ve been interrupted, it can take us as long as 20 to 30 minutes on average to get back on task.

    One of the best things to do for personal and department productivity is to block substantial chunks of time each day – 60 to 90 minutes – so that you can make real headway on an important project. Not three projects at once – just one. This requires turning off the email and getting away from the phone, but more often than not, that’s the only way to ensure we are doing things right.

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