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Eliminating Waste in Small Law Firms

Waste Toilet.jpg

The idea of being efficient and eliminating wasted effort comes naturally for some attorneys. It’s part of their DNA. For others, law school, and their environment, taught them to analyze every nuance – to be as thorough as possible. Unfortunately, this way of practicing often generates waste when you own your own business. Add to that the fact that service businesses in general are prone to wasteful effort and time, and you get a recipe for small firms that can be challenging.

Now, I’m not saying lawyers shouldn’t be thorough. Would you want an attorney to breeze through your business merger or your child custody case without covering all the details? Certainly not. What I am saying is the way work gets done in most law firms leads to wasted effort. But what is waste and what does it look like in a small law firm? Merriam-Webster defines waste as the “loss of something valuable that occurs because too much of it is being used or because it is being used in a way that is not necessary or effective.” Waste implies unwanted or unusable raw materials. In the case of law firms, the raw material is time.

Let’s be clear. I despise the billable hour. One of my callings in life is to convert as many small firms as I can away from using this pricing/billing method. But that is another conversation. In the context of waste, time is our focus. In essence – reducing unnecessary or ineffective uses of time. The challenge is fairly direct: find areas in the business (e.g., finding clients, serving clients, keeping clients, getting paid and managing the business) where time is wasted and then reduce it.

Common Types of Waste in Small Firms

Just skim through a project management or process improvement article (or just Google “Lean Service” or “Six Sigma”) and you can’t miss the following list (or some other version of it):

  1. Defects: errors in documents; mistakes; dropping the ball on a case; missing key information

  2. Transportation: excessive movement of documents; touching things more than once

  3. Overproduction: doing work not required to meet the objective; doing more than clients want or will pay for; working in a way that does not support actual, stated client needs

  4. Inventory: excessive backlog of work; too much “work in progress” (WIP) and not enough closing out of cases; excessive pending requests or tasks in your practice management program

  5. Waiting: not aggressively “working the file”; waiting for a next step; waiting for permission or direction or instructions or approval

  6. Duplication/Over Processing: excessive reviews and approvals; extra steps that are redundant or not needed; no automation

  7. Movement: unnecessary motion of people; looking for information or tools; poorly setup workspace; constantly switching between different computer drives, or simply having to perform too many keystrokes

  8. Underutilized Skills: underutilized capabilities; delegation without training; told what to do; not involved in process improvement; “this is the way we’ve always done it”

As you read this, you may have already thought of some examples of potential waste in your own practice. A paralegal waiting on medical records from three treatment facilities that weren't ordered on time. Or a seemingly minor mistake in due diligence that turned out not to be so minor to close the deal. Or even something as mundane as searching for the right format of a document or tasks waiting in inboxes. Unfortunately most of the actual work in a service business is invisible to the naked eye – you can’t see the actual widget being made or raw materials coming in the loading dock. But that does not mean waste is undetectable in your firm.

Tips for Finding & Eliminating Waste in Your Practice

It’s actually pretty easy to find waste. Eliminating it is the more challenging undertaking. If waste is bugging you or you suspect there are ways to improve how your firm operates, try this approach. In just a week or two, you could be well on your way to building a smarter, more productive practice.

  1. Observe – Pick a few time slots out of your week (perhaps 30 min first thing in the morning on a Monday, Wednesday, and Friday) and just watch/listen to what happens in your office. If you have employees or a partner, see how many times they touch the same piece of paper or how long it takes them to find a certain tool or piece of information. If you are solo, check your in-take box or your email inbox. Are their items you have touched multiple times in the past week, but nothing seems to be moving forward with the case? Are you waiting for approval on a decision that is bogging down the matter? How long have you been waiting and what is holding things up? Use your skills of observation to find examples of waste from the list above.

  2. Document – what do you see? Write it down and try to group findings into natural categories (e.g., types of matters, areas of the office, or phase of the matter like “client billing.”) Also document the types of waste you find. If you don’t document what you see and analyze it, you’ve most likely wasted the time you spent observing. Get it out of your head and on to paper.

  3. Choose – Now, pick a group of observations (either because they annoy you the most or they naturally fit into a nice category) and map out the steps involved in the process you observed. Build a flow chart using a program like MS Visio or simply righting each step on a sticky note and lay them out across a wall or table. To start, pick a group or category that can be narrowly defined – this makes the exercise easier. For example, a client of mine observed his team was spending far too much time chasing information for a specific case. The old “I checked with Ann and she said Steve had it.” When you ask Steve, he says, “I finished that a week ago and passed it to James for review. I think he is still working on it.” In this case the waste was a combination of “Movement” waste and “Waiting” waste.

  4. Find – spend time alone, with your team and, if necessary, with a process expert to identify causes and solutions to the waste you’ve identified. Brainstorm ways to reduce or eliminate the wasted effort you’ve uncovered. In the client example above, the underlying cause of the problem was too many documents flying around with no real process for compiling them, reviewing them, and getting them out the door. A solution was found by simply documenting a review process for select documents and utilizing a key feature in their document management tool that had previously been unused. Combining redundant steps, streamlining approvals and creating a simple paper trail was the key.

  5. Standardize – more often than not, physically mapping a series of steps (a process) uncovers lots of new information. Who does what and how long does it take? What are the steps that are crucial to getting the process done quickly? What steps will derail the process? How many people do the same thing, multiple times? But you can’t stop at documenting a process and finding ways to reduce the waste. You must also standardize the process and procedure and have everyone stick to it. Getting the people who actually do the work involved in making the procedure and agreeing on ways to measure their compliance is a good place to start.

In my experience, small firms are plagued with wasted effort. But the symptoms of waste often go unnoticed or unaddressed. Perhaps this is because very few business owners spend timing thinking about waste, let alone finding ways to reduce it. Making rain and servicing current clients are always top priority. Or perhaps attorneys have the luxury of ignoring waste because they are comfortable - if it ain’t broke, don’t fix it. The problem with this line of thinking (and running a firm this way) is sooner or later, waste piles up and causes problems.

Maybe not next week or even next year. But trust me, it will.

“One of the very worst uses of time is to do something very well that need not to be done at all.”

- Brian Tracy, Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time

#Processimporvement #waste #LeanLegal #lawfirmsasabusiness

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