Process efficiency has climbed up the agenda ladder as the ‘efficiency challenge’ continues to rattle the legs of the legal industry. In my blog ‘Law reaches its limit’, I discuss how legal professionals are being pushed to their limits, with fixed fees and 24/7 client demands challenging productivity and value-add services.
George Bull, Senior Tax Partner at Baker Tilly wrote a recent blog on this very issue claiming that, ‘Law firms are employing a range of different approaches to tackle the “efficiency agenda”. Many have exhausted the benefits that can be achieved from straight-forward tactical ‘tinkering’ and are now looking at more radical approaches to remain competitive in the marketplace.’
Lisa Goldstein, executive director of the Philadelphia office of Special Counsel has also entered the conversation online, publishing a recent article on @thelegalintel. She writes, ‘Although there has been some hesitancy throughout the legal community to disengage from the billable hour, many corporations and law firms are finding that AFAs enhance the relationship between, and create value for, both law firms and in-house counsel. AFAs press law firms to handle work efficiently, enabling them to compete more effectively. Law firms have responded by offering flat fees, fixed fees with collars, reverse contingent fees, success fees and performance-based holdbacks, among other creative billing methods.’
Recognizing this ongoing challenge, in our Smarter Working webinar we delved deeper into the legal efficiency challenge debate honing in on process efficiency. We asked our panel of experts, “How much should lawyers focus on process efficiency?”
On the panel included Stephen Allen, Director of Service Delivery & Quality at DLA Piper who responded, “We need to be able to deliver much greater efficiency but also we need to look at the quality of the service we’re delivering and increasingly reports and our own client feedback is saying to us that the quality of legal is almost a given, we expect that from you…you’re a law firm, we expect you to be able to give us the right technical advice, but actually we want a service.”
He continued, “Training lawyers [on project management] on top of everything else they need to learn, keeping abreast of the law, understanding the sectors they’re in, developing sector expertize, is just too much.”
So, with lawyer capacity bursting at the seams, it seems inevitable that law firms will need to look at other methods to resolve the efficiency crisis.
Goldstein explains how, ‘As a result [of AFAs], they [law firms] are putting tools in place to utilize legal process management to support their lawyers to be more competitive while minimizing markdowns and write-offs and improving their profitability.’
In her article she continues to explain how DuPont's preferred law firms use a Lean Six Sigma process improvement and project management approach to drive efficiency hand-in-hand with creating AFAs. ‘The more disciplined a firm is regarding matter management, the more accurate and profitable the fee is.’
Goldstein also highlights how Vince Cordo, legal department global sourcing officer at Shell explained to her that, ‘…firms that tie legal project management with pricing are more likely to be successful, saying that, "If there is not careful management between time and billing, this cannot be managed efficiently.”
Find out how DLA Piper is addressing process efficiency by watching our ‘Legal Efficiency Challenge’ webinar.