成人VR视频 Institute: Throughout this series, you discussed how process improvement is transformative within the legal industry, and how those firms that embrace it can create an upwards spiral of efficiency, cost-savings, and client satisfaction. Yet, law firms are notoriously risk averse and seem unwilling to depart from traditional ways of working, even when those ways may not be working well. How can process improvement change this thought process?

Fred Esposito: Process improvement methodologies and tools are invaluable for understanding ways to improve how legal work is currently produced. Once data shows the magnitude of the problems and opportunities, those risk-averse lawyers realize very quickly that it is less risky to change than it is to continue to operate in the way they always have.

They are also getting more attuned to the importance of creating a continuous improvement (dare we say innovative!) culture that focuses on the employee experience and develops new competitive advantages in a marketplace where the war for talent is real. There are also many case studies, so we have plenty of precedent and good responses to the age-old question, 鈥淲ho else is doing that?鈥�

Despite traditional resistance to innovation, many law firms are recognizing the benefits of training their people and their clients about process improvement and project management methodologies. This kind of 鈥渟peaking the same language鈥� facilitates all sorts of productive and positive discussions, including how law firms can increasingly assist clients with their own strategic initiatives, which contributes greatly providing added value and being a good business partner.

成人VR视频 Institute: You previous talked about the DMAIC framework 鈥� Define, Measure, Analyze, Improve, and Control for doing process improvement work. How can that play a part here?

Fred Esposito: Indeed, the key to success is to follow the frameworks for doing process improvement work. Whether it is DMAIC or a variation like DMADV (Define, Measure, Analyze, Design, Verify) or the Legal Lean Sigma庐 Institute鈥檚 collaborative approach to process improvement, called the Legal WorkOut庐, the key is to not skip steps and do that work in that exact order. The temptation to skip steps will occur, of course, but you should resist it. Take the process improvement phases in order and stay the course, because change management and stakeholder engagement are built into the way we do this work; and it is not just effective, but practically fail safe. This very logical, sequential way of delivering a process improvement project is also a good assurance for those risk-averse lawyers I mentioned earlier.

When performing legal services, law firms need to focus on the development and documenting of process: a describable, repeatable sequence of activities and tasks that generate outcomes, while creating and delivering value to the client. A good process will also deliver value to the firm, with no tradeoffs.

As the Legal Lean Sigma Institute teaches, everyone is too busy to do things over again and spend time correcting things. We want to figure out how to 鈥淒o the right things, the right way, the first time, every time.鈥�

成人VR视频 Institute: It sounds like process improvement success depends on following the framework.

Fred Esposito: That鈥檚 right. The DMAIC, DMADV, the Legal WorkOut, and even Design Thinking frameworks ensures that a cross-functional, diverse team travels safely through a project journey with built-in checkpoints and the right stakeholder engagement. It requires answering some key questions: What is value in the eyes of the client? What do law firms do that its clients may not consider valuable? In performing legal services, where do we have Lean鈥檚 8 kinds of waste and Six Sigma鈥檚 undesirable variation? Through each of the phases in DMAIC, those questions start to get answered and are supported by data.

Data can tell a great story of how existing processes are working (Define & Measure); help us discover problems in existing processes and determine their root causes (Analyze); then identify process changes that can help (Improve) existing processes, either by addition or elimination of steps; and then find the ways to keep the new and efficient processes on track (including room for corrective action) for delivering predictable outcomes (Control).

DMAIC can be applied to every process in any firm of any size 鈥� it is completely scalable and can be scoped 鈥� and that鈥檚 why I think following this path through process improvement projects are going to be a big part of the future in legal. Simply put, it works. As we say at the Legal Lean Sigma Institute, 鈥減rocess improvement lives at the intersection of client, employee, and brand experience.鈥�

Currently, DMAIC is being used for all key business and legal processes, to improve every kind of work the firm does and delivers. Lean Sigma produces more than just financial improvements; process improvement helps firms determine the best way to conduct a certain kind of work to achieve efficiency, excellent quality of work and service, high probability of successful outcomes, and predictability.

成人VR视频 Institute: Do you think this could be the game-changer that everyone in legal says they鈥檙e always looking for?

Fred Esposito: It may well be 鈥� but some firms are going to be up for that challenge and others will still have a way to go. But you know the old way of doing things, the instinct and muscle memory, still play into it, of course; but today鈥檚 clients are more sophisticated. Their legal ops and procurement professionals require something qualitative as well as quantitative, and all clients demand budget predictability. They want to know how the services they buy are priced and valued.

So, yes, I鈥檇 say it鈥檚 a definite game-changer now and has gone mainstream. I think it’s going to evolve even further in another year or so, because there’s going to be so many iterations of process improvement work. We’re already seeing hybrid work models, and everybody is doing something different.

With every undertaking within a firm, it鈥檚 going to be driven by individual firm culture, resources, organizational maturity, leadership, and so on 鈥� and that鈥檚 also the beauty of process improvement. No one does it the same as anyone else, yet it works for everyone.

Fred Esposito, COO of the regional law firm Rivkin Radler, has more than 25 years of law and accounting firm experience, is an author and sought-after speaker specializing in financial and organizational management, process improvement and project management, and has managed and worked in a consulting capacity with several domestic and international law firms. He is also a senior consultant with the Legal Lean Sigma Institute, LLC, and a Certified Green Belt in Legal Lean Sigma with a Project Leader designation. Fred is working towards his Black Belt Certification.

成人VR视频 Institute: We increasingly hear about clients being in the driver鈥檚 seat these days, holding the power to make demands and elicit concessions from their law firms, especially in areas of pricing. Do you think that is true, and more importantly, does process improvement offer law firms a tool to combat this?

Fred Esposito: Clients are in the driver seat, and law firms need to have a better handle on what clients value as well as the economics of their own firms as well. Most firms do not have a clear grasp about how much it costs to perform and deliver their legal work.

With the rise of procurement and legal operations professionals in client companies as well as pricing and knowledge management professionals in law firms, the days of producing an approximate value of a matter based solely on experience are long gone. The focus is no longer on what rates to charge, but how much is it costing the firm to produce the requested legal services. This question opens the door to many components and related processes which may or may not be contributing to an efficient work product.

Firms should be looking at all critical legal and business processes, which means starting with a way to surface, select, prioritize, and resource process improvement projects that are related to pricing.

In fact, you often can see the economic perception of some law firms and their lack of understanding of their own cost process on display. During speaking engagements, for example, I will often ask a room full of legal executives, if they know how much it costs their lawyers to produce one billable hour. Do they know that cost per hour by practice area or task? Regrettably, few hands go up 鈥� sometimes just three to five hands in a room of 100 executives. Consequently, many firms have dipped their toes into the fee arrangement pool and for lack of better terms, drowned in the process.

The good news, however, is that law firms are learning from the mistakes of the past, listening to clients, feeling some positive peer pressure, and paying closer attention to the numbers. A significant benefit of this is that process changes will be accepted.

成人VR视频 Institute: Is this a problem that solely comes from the law firm side?

Fred Esposito: No, because in all fairness, some clients may be unreasonable in their requests for specific fee arrangements; but there are one of two ways to manage those situations. One, the firm can turn the existing or potential client away because the firm will not or cannot be that flexible; or, two, the firm can rely on its economics and produce various pricing scenarios that might fit better with the client. This would be the desired course of action.

Unfortunately, many law firms do not take the time to understand how and why their pricing works the way it does or does not. Firms should be looking at all critical legal and business processes, which means starting with a way to surface, select, prioritize, and resource process improvement projects that are related to pricing.

One easy thing to do to is to review operations and productivity data to see where the law firm can improve in pricing. For example, see where there are write-offs and write-downs, or simply ask employees and clients about pain points and improvement opportunities.

The result will be a streamlined and efficient process that will reduce and/or make more predictable the costs to produce legal services while generating profit. Thus, all this allows the firm more flexibility in their proposed fee arrangements.

成人VR视频 Institute: How can process improvement transform the pricing function from there?

Fred Esposito: The goal is to create efficient processes that positively impact the bottom-line without sacrificing quality and while improving client and employee experiences. Firms need to have the right amount and type of data which can provide the details for how much time a task should take and at which attorney level it should be done.

This is further complemented by firm financial data surrounding operations and productivity. In short, law firms need to ascertain how much it costs them to produce a billable hour, by attorney and by practice area. Again, it is not about rates, it is about the amount of time being spent to produce the work. Deeper dives into the how the work is currently produced will be the playing field for a process improvement initiative.

Law firms must first understand how a current process is working to order to identify where improvements can be introduced. This is best accomplished by defining how the current process is working and measure and analyze the data produced.

Law firms cannot improve efficiency and create that added value unless they understand the issues that are keeping them from reaching that optimum performance. Law firms that can strike that balance will differentiate themselves from their competitors in developing business. Once a law firm is conversant with their economics, pricing becomes more predictable and profitable. Also, an inherent flexibility in what the law firm can do with pricing becomes more apparent, and more importantly, more innovative.

成人VR视频 Institute: So, would process improvement support that better understanding of the pricing function?

Fred Esposito: Well, pricing is, in and of itself, a process that can be improved. The key takeaway is that law firms are getting the message from their clients and working harder to develop smart pricing that produces a win-win. They are also getting better at client, project, matter/case, knowledge, and budget management. Overall, they are making strides to pricing and managing their legal services.

Yet, pricing has always been viewed as a financial component; however, with streamlined processes that promote cost reduction, efficiency, and client value, it can be a significant stepping-stone for taking the client relationship to a whole new level of strategic growth. It is not just about finance; it is about building relationships with innovative and competitive advantage.

The success of this process is attributed to firms鈥� ability to align the needs 鈥� or the voice 鈥� of the client and their own need to provide efficient legal services while generating a profit, delivering higher quality work product and service, and providing a better employee experience, too. Taking it a step further, law firms that are successful in this area are using this work to gain competitive advantages in their marketing and business development efforts.

Using process improvement for pricing is important not only for profitability and delivering what clients want, it is quickly becoming 鈥渢able stakes鈥� for law firms that want to remain or become competitive in today鈥檚 marketplace.

Next, we鈥檒l look at what the future holds for process improvement and the firms that pursue it.

Fred Esposito, COO of the regional law firm Rivkin Radler, has more than 25 years of law and accounting firm experience, is an author and sought-after speaker specializing in financial and organizational management, process improvement and project management, and has managed and worked in a consulting capacity with several domestic and international law firms. He is also a senior consultant with the Legal Lean Sigma Institute, LLC, and a Certified Green Belt in Legal Lean Sigma with a Project Leader designation. Fred is working towards his Black Belt Certification.

成人VR视频 Institute: You had said that when you selected a new project for process improvement at your firm, you immediately knew you wanted to tackle the client in-take process. Why is that?

Fred Esposito: I wanted our firm to start our process improvement program by working on one that is critical to the business; those processes include intake, conflicts, timekeeping, billing, on-boarding, and pricing. The client in-take process was selected because it not only touches every part of the firm, it also produces outputs that affect and inform those other processes and strategic decisions.

I believe that client in-take may be one of the most critical areas on which a firm can focus its process improvement efforts, simply because it鈥檚 a contact point with almost every part of the client鈥檚 interaction within the firm.

成人VR视频 Institute: How did you begin this process on client in-take?

Fred Esposito: We always do this work with a cross-functional, diverse team (which is why process improvement supports firms鈥� diversity, equity & inclusion efforts). As the process improvement operation into client in-take began, I had partners, associates, managers, directors, and administrators 鈥� such as those in finance, billing, and IT 鈥� selected to work on the project. I cherry-picked 10 individuals who now have been working on this project for two years. We have three partners from different practice areas, the firm鈥檚 Director of Finance, Director of IT, Director of Marketing Communications, Billing Manager, and a Lead Legal Assistant.

We also have three Equity Partners who perform the role of the project steering committee. They are responsible for conducting gate reviews, which involves checking our work at each phase of the DMAIC framework 鈥� the Define, Measure, Analyze, Improve, and Control steps 鈥� that we are using to deliver this project. They review, comment, and provide the approval to move onto the next phase. In this way, we have a lot of communication and change management built into the way we do process improvement work.

In fact, one of the keys to this project鈥檚 success was to get buy-in from the Steering Committee (SC). At each phase of DMAIC, the team is required to produce specific deliverables in order to pass a gate review. For example, in the Define phase, the project team developed a project charter. Part of that work involved compiling more than enough data to make a business case that illustrated the inefficiencies. We then presented our work to the SC in the Define phase gate review. Once the SC reviewed the data presented, it was eye-opening. The SC was convinced that we had picked the right project and were tackling the right problems, had the right team, scoped the project well, and could achieve the goals we set for ourselves. They wanted to learn more, which then moved us to the Measure phase.

At each phase of DMAIC, the project team and the SC learned a great deal as the data that was collected, measured, and analyzed, made the business case for improvement. The innovation began to take shape in the Improvement phase as the project teams begin to develop solution filters and pilot those proposed solutions with firm personnel.

Not only is the SC seeing the ongoing progress, but through the piloting that is taking place, firm personnel are starting to get a taste for some of the solutions being considered and are solicited for their ongoing feedback. This is when the process improvement initiative starts to take on a life of its own.

成人VR视频 Institute: You spoke about improvement 鈥渟howing the relationship between urgency and innovation鈥�. Did that come into play here? How did you balance these concepts?

Fred Esposito: All of these divergent voices greatly contributed to moving the project forward successfully. For example, we saw a lot of things from the lawyers鈥� perspective that have been very useful. Using this, my team delved into not only the procedural process of how the firm was conducting client in-take 鈥� measuring and analyzing the different steps of the in-take process 鈥� but also identified what being missed or overlooked.

For example, a large part of the in-take process is determining whether potential clients have conflicts that should be known to the firm. With the ability to focus on this one specific area, the team was able to find a way to better identify conflicts around adverse parties or relationships between parties, which often get missed in routine conflict checks. They also determined whether there were false conflicts being raised that may have caused needless problems.

Solutions considered for this area included reformatting of intake and conflict check protocols and forms. All of the proposed solutions for piloting were vetted by the SC and the firm鈥檚 new business committee. The DMAIC framework is so useful because the building blocks of transformation are built right into it. Working with attorneys and staff at all levels was the key to success because you cannot make substantive change to any process without gaining the knowledge and experience of those who are working with the current and proposed process.

成人VR视频 Institute: When the pandemic changed everything, how did your process improvement project adapt?

Fred Esposito: When the pandemic hit, we wanted to see what the impact of a virtual law firm would be on these processes. So, we regrouped and revised our project charter and scope. In fact, we actually did the Measure and Analyze phases twice. That was because team members had worked the conflict process to a certain point, then decided to expand the scope to capture these missed and false conflicts. There was enough information that had been gathered to tell us this is something we should be considering.

Overall, the process improvement initiative in client in-take at our firm has been going on for more than two years. And that鈥檚 my point, this all takes time 鈥� it’s not an overnight thing. It’s not like you’re going to buy a Process Improvement for Dummies book and have your firm changed in three months. It’s not going to work like that 鈥� process improvement, done right, takes time.

成人VR视频 Institute: What comes next in this process? Have you been able to determine if this was a success?

Fred Esposito: While the project team is gearing up for Control phase, we are very optimistic that we will accomplish our goals for improving the client in-take process overall. While the firm is still working on the technology aspects for the new process, I am working with the team to start transitioning the ownership of the client in-take process to those who will be working with it.

The project team has worked very hard to bring the work to this point, but it鈥檚 now coming to the point where the firm must accept ownership and move forward. The Control phase will be our litmus test, but also a source of gratification and accomplishment, not only for our exceptional project team, but for the firm as well.

Next, we鈥檒l look at the impact that process improvement could have on law firms鈥� pricing function.

Fred Esposito, COO of the regional law firm Rivkin Radler, has more than 25 years of law and accounting firm experience, is an author and sought-after speaker specializing in financial and organizational management, process improvement and project management, and has managed and worked in a consulting capacity with several domestic and international law firms. He is also a senior consultant with the Legal Lean Sigma Institute, LLC, and a Certified Green Belt in Legal Lean Sigma with a Project Leader designation. Fred is working towards his Black Belt Certification.

In this post, we speak to Esposito about how law firms are approaching process improvement in the post-pandemic environment.

成人VR视频 Institute: Of all the massive changes that the pandemic crisis brought to the legal industry, you have said that one of the most important and yet relatively unheralded is the renewed focus on process improvement. And while process improvement has been around since the days of Taylorism, what has the pandemic done to bring a new emphasis to this area?

Fred Esposito: The pandemic offered many industries, legal among them, both an imperative and a pause in which to consider and change (out of sheer necessity) how they were doing business and what could be done better. This had its benefits in terms of pushing firms to look at how they perform and deliver legal services, and I think that in turn has brought process improvement to the forefront.

The pandemic crisis also allowed for a slow-down in thought that made people realize there was a 鈥渕iddle step鈥� that wasn鈥檛 officially recognized during the last great upheaval, the Great Recession in 2008. That middle step involves process improvement.

The need for project management and alternative fee arrangements came to the head of the line for many legal innovators in past cycles, but those things are not enough. In addition to managing and pricing of legal services, we must also identify and carefully define the problems and opportunities 鈥� and it鈥檚 not just about identifying waste and what is occurring in a process. It鈥檚 important to not solve too early but to identify why the waste is happening and get to the root cause.

When law firms start looking around and comparing themselves to their peers, most do not conduct an adequate apples-to-apples comparison in terms of how the firm is performing 鈥� this is one of the flaws to benchmarking performance data. Comparing a 50-attorney firm鈥檚 revenues and performance to another 50-attorney firm is not necessarily a good comparison, unless the firm鈥檚 infrastructure, compensation, and support models are the same as well, which is unlikely. And that鈥檚 because revenues and other performance metrics are generated differently based on practice areas and support for producing legal services.

成人VR视频 Institute: At this juncture then, what makes process improvement so critical?

Fred Esposito: Process improvement helps us work as a cross-functional, diverse team. We lift the hood and see how and why the engine runs the way it does. In this way, the use of process improvement provides law firms an opportunity to examine how they currently perform their legal services.

The first step is to select which of the process improvement methodologies to use. Typically, we use the Define, Measure, Analyze, Improve, and Control (DMAIC) framework. It takes discipline to follow these steps, but this data-driven improvement cycle has change management built-in and practically ensures successful delivery of Lean Sigma projects.

Firms needs to define and understand their current process, measure how it works, analyze the performance data, and identify the root causes for any inefficiencies. Only then can they develop solutions to improve the process and implement steps to minimize the inefficiencies.

成人VR视频 Institute: What are the initial steps in the process?

Fred Esposito: After we get the project approved, we prepare and assemble our cross-functional team, and assign roles and responsibilities, including establishing what is called a Steering Committee. This is a small group of decision-makers who ensure we produce required deliverables in each phase in what are called 鈥渢oll gates鈥� or 鈥済ate reviews鈥� at proscribed points in the project. It鈥檚 also important to identify all the stakeholders involved in the current process, so you know who will be impacted by this process improvement initiative. And it’s not just the clients, it’s everyone that has a hand working within this process.

We start with project planning in the Define phase, set our scope and goals, gather Voice of the Client and client requirement information, and begin to get a picture of the current process with mapping it and gathering data in the Measure phase. It is always interesting to see what data exists and what does not 鈥� and also how good that data is.

After we see what is happening in a process, we figure out why those things are occurring in the Analyze phase. It is crucial that we do that before implementing any fixes or solutions so that the firm has a baseline to measure any improvements.

Obviously, we want to pilot solutions before any full- scale implementation takes place. And once those improvements are put into play, firms must then monitor and set up controls to ensure a consistent result every time. Clearly, these steps involve reviewing the right data, but it all assists the firm in developing ways to make its work processes operate more efficiently.

成人VR视频 Institute: Certainly, this approach will raise some questions for firm leaders. What would be foremost on their minds at this point?

Fred Esposito: One main question is likely to be, 鈥淲here do we start, and how do we select which projects to approve?鈥� And in terms of a specific legal or business process, they might ask: 鈥淲hat is standing in the way of making this a more efficient process? Is it our policies? Technology? Is it a training or communication issue?鈥� Our role as process-improvers is to ensure no one jumps to solutions too quickly but to also pick the right methodology, approach, and tools for the situation at hand.

For example, there are many immediate improvements that can be identified in one process mapping workshop. We also have the Legal WorkOut^庐, which is a way the Legal Lean Sigma Institute developed for teams to rapidly improve processes. An experienced practitioner is worth their weight in millions of dollars 鈥� and other benefits.

It鈥檚 also important as the process improvement moves forward to be prepared to address any potential conflict this initiative might cause. Certainly, some people 鈥� often including partners within a law firm 鈥� will push back against any change in the way things have traditionally been done, even if those older ways are not working as well anymore.

One way to address this conflict, is to court buy-in early on from top-level and respected individuals within the firm, something I did when Rivkin Radler sought to change the way it conducted its client in-take process. As part of this, the data gathered at the beginning of the Measure step of the DMAIC process allowed my team to show what inefficiencies were occurring in the process before and how those problems could be addressed.

成人VR视频 Institute: So, this is a change in mindset as well as a change in the way the business operates?

Fred Esposito: Yes, I want people to think of improvement as the relationship between urgency and innovation. We can help people to see the reason for necessary improvement and the path to how it will get done.

Working with clients on their process improvements, I鈥檝e seen that many times it is people 鈥� the staff, the associates, and of course, the partners 鈥� who are coping with a broken process and often, while well-intentioned, contributing to the problematic efficiency issues. Helping people work as a higher functioning team is at the heart of transformation work for us.

Next, we鈥檒l look at the impact of process improvement on the client in-take process.