Transform Your Practice by Becoming a Deming Disciple
The practice of law is complicated. A single case can involve multiple attorneys, dozens of files and hundreds of interactions among a law firm, clients, opposing counsel and courts. Given the vast scope of moving parts and operations of a legal matter, it is ripe for business process optimization.
Process optimization is not only about speed; its main mission is, in fact, to consistently deliver quality work product to the end customer, which in the case of a legal matter is the outcome desired by the client. While some traditionalists might scoff at the concept of systematizing what they deem to be a highly personalized, highly analytical and relationship-driven affair, the science of process management and quality maximization has been applied across virtually every sector and industry for over 100 years. Advancements in software and computing have made process optimization even more relevant for law firms.
W. Edwards Deming, an American engineer, statistician and management consultant was one of the pioneers of process management in the mid-1900s and largely credited with helping Japanese companies establish themselves as world leaders in product quality within a short period of time after WW2. He came up with dozens of principles of management, three of which are highly relevant to small firms:
1. Do Not Rely on Inspection to Achieve Quality
Deming advocates using inspection only to determine if a process is not optimized or not properly designed for the purpose for which it was intended. But as a means of quality control, routinely relying on spot checking and inspections will guarantee that you will have inconsistency and the resulting impact on work product quality. Virtually all the focus needs to go into the process. In the context of a law practice, this can be checklists for every aspect of a matter from intake to drafting agreements and software for delegation and accountability-tracking.
2. Institute a Training Program- Yes you can afford it!
No matter how much we rely on systemization, there is still so much “art” that goes into the practice of law. This is why training is key. While this sounds obvious, most small firms don’t go about this the right away. They typically have new hires shadow a team member. The problem with this is that it’s not methodical and often, it will result in the new hire picking up bad habits or imperfect approach from his or her mentor. Sort of making copies of copies in the days of audio cassettes. A formal training program seems far fetched for a small law practice, but there are tools designed to make it viable for small organizations. There are a variety of online cloud applications for employee training (and testing). You can enter a question and create a multiple choice test that can be administered after training. This can also be used regularly for assessments. It is also worthwhile to record a video of how common situations are to be handled. This ensures a consistent onboarding process for new employees and one that can be regularly enhanced to address shortcomings in performance.
3. What Cannot Be Measured Cannot Be Improved
This is perhaps my favorite of Deming’s principles. Measuring progress, productivity and profitability have been made vastly easier with modern practice management applications. Some metrics you should be able to generate include:
- Timekeeper Productivity – How much are you and your team members billing and perhaps, more importantly, collecting? A solid productivity report will group by timekeeper and show their respective billable, non-billable and collected amounts as well as realization rates.
- Imputed Hourly Rate – I’ve spoken to attorneys who are under the impression that they’re earning the equivalent of 4-digit hourly rates on their flat fee or contingency cases. Once they’ve instituted systems that automatically track time, they’ve at times come to the realization that it’s in fact a far more meager hourly equivalent.
- Referral Report – Who gets the big basket come the holidays? Ideally, the report will show not only billings but also collections.
Much of the above requires an investment of time by the firm principals. This is no easy feat given how we attorneys are too busy chopping trees to stop and sharpen the axe. Block out time, make it sacrosanct on your calendar. It will yield dividends for decades.