Digital White Papers

ILTA WHITE PAPER: NOVEMBER 2015 WWW.ILTANET.ORG 13 Overworking a matter or spending more time than is necessary on an issue or activity. This is typically referred to as "gold plating," which occurs when lawyers work to create a perfect product versus one that sufficiently addresses the needs of the client. This can occur when conducting legal research, drafting a document or analyzing a legal issue. Parkinson's Law, where the amount of time necessary to complete the task is the amount of time available to complete the task, as noted on Wikipedia. This tendency occurs when lawyers or paralegals operate with no guidance on the reasonable amount of time to invest in a task. Overstaffing occurs when the needs of a legal matter are not evaluated prior to assigning resources (for example, assigning multiple associates to an emergency research or due diligence project prior to confirming the scope and relevance of issues). Assigning the wrong resource to the task/ activity can occur when a higher rate (or cost) resource is assigned to a task or activity that could have been completed by a lower rate (or cost) resource. It can occur, for example, when a litigation associate is assigned a task/activity that could have been more efficiently completed by a transactional associate. While legal expertise continues to be important to compete in this environment, new skills are making their way into a client's definition of lawyer proficiency. Learning from their business unit counterparts, corporate legal departments are issuing requests for proposals (RFPs) to procure legal services and are requiring respondents to demonstrate the ability to provide predictable costs, manage work efficiently and continuously improve their service delivery model. These demands require lawyers to look beyond traditional law practice techniques. At Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, we've experienced a five-year journey toward legal process excellence, and we'll share our recommendations for incorporating these practices into the delivery of legal services. If lawyers embrace these changes, they will quickly recognize that operational excellence is an essential competitive strategy. WHAT NEEDS TO IMPROVE? Most lawyers continue to operate under an hourly billing model, which assumes that the value of the legal service is directly tied to the number of hours required to complete the service. Under this model, the lawyer has no true incentive to find the most efficient path for delivery of services other than the ethical requirement to provide a reasonable price. ABA Model Rule 1.5 prohibits a lawyer from collecting an unreasonable fee and defines reasonableness to include the time and labor required, the scope of the representation, and the fee customarily charged. As a result, many clients incentivize their lawyer to be more efficient by moving to fixed or flat-fee models, which lock their lawyers into a set price. There is, however, an alternative solution that can inject renewed trust into the lawyer-client relationship — a commitment to legal project management and process improvement, i.e., Lean and Six Sigma. To understand how these techniques can improve legal workflows, there must be an understanding of legal waste. Waste is anything for which the customer is not willing to pay. Waste is the opposite of value. According to Dr. Jeffrey K. Liker's book, "The Toyota Way: Using Operational Excellence as a Strategic Weapon," in the manufacturing context, waste occurs in the following instances: • When there is wait time between processes • When there is unnecessary human motion • When mistakes occur that require rework • When excess inventory is stored for long periods of time What is legal waste? Legal waste is anything that does not add value to the client under an hourly billing model, or that undermines a law firm's profit in a fixed or flat-fee model. Several examples of legal waste include: MAXIMIZING VALUE: ELIMINATING WASTE THROUGH LEGAL PROCESS EXCELLENCE

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