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Legal Office Application of Six Sigma–Is it Possible?

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  • #26930

    Ray Swenson
    Participant

    Recently our corporate legal department indicated an interest in applying Six Sigma to our legal office operations. However, it seems to me that the kind of work we do is poorly suited to the kind of measurement and quantification that is an essential step in applying Six Sigma, other than repetitive tasks involving basic office tasks such as maintaining records and billing our time. How do you assign a scalar to the quality of a legal opinion? How can you assume that a large number of legal opinions, of varying lengths and complexities, will have a normal distribution on that scale? Does anyone know of any actual full implementations of Six Sigma in a legal office context (either law firm or corporate counsel), as opposed to the use of common sense, non-quantified quality management principles?

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    #65485

    G. Chris Taylor
    Participant

    Business is a process, even if you don’t design and produce tangible products. The six sigma methodology can be sucessfully applied to non-manufacturing, service oriented business functions . Don’t over- emphasize advanced statistics…six sigma teaches you to improve your approach to problems and processes. Begin by using basic measurement and data analysis, once you have used these basic tools – you will find the need and the way to incorporate more advanced analysis. I have read of financial institutions using the six sigma methodology to decrease employee turnover (measurable) and reduce the need to turn away business (also measurable)as one example. The technique of measure and improve is simply this – we tend to treasure what we measure.
    This concept will drive continuous improvement.
    Regards,
    G. Chris Taylor, CQE

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    #65488

    Ram Josyula
    Participant

    Mr. Chris Taylor is right on. When I worked a GE headquarters as an MBB and Quality Leader we successfully applied six sigma to legal, HR, Finance an even Corporate Comunication and training. To tell the truth, these applications are more exciting, meaningful, applicable, profitablle than the industrial six sigma projects. As Mr.Taylor says the key is approaching this as a process. There are lots of six sigma myths around: One of them is that statistics and six sigma do not apply to professional areas. Believe it or not, we even did DOE with interesting interactions.

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    #65489

    Bill Dean
    Participant

    I agree with both Chris and Ram. You will normally find more opportunity with the transactional projects since it is something that is not often measured. If you correctly identify the appropriate dashboards (based on the Voice of the Customer), you’ll likely be surprised at the results. The tools needed will be very similar to those in industrial applications through the middle of the Analyze phase in DMAIC. You will tend to use non-parametric statistical techniques since your data will tend to be ordinal or nominal, and the transactional data will often violate some of the assumptions of the more commonly used parametric techniques.

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    #65490

    Mayes
    Participant

    The responses that have been given so far are optimistic but lacking in specifics. An article I read about the GE legal office applying Six Sigma only identified activities that are handled by office support staff as being affected, not the work of attorneys. I would like to see a specific example of applying Six Sigma to real legal work, as opposed to the relatively automatic processing of documents.

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    #65491

    Carl Thomas
    Participant

    It’s not difficult to figure out how to apply six sigma to a transactional process like the legal profession. First, you need to determine a process (something repeatable — not necessarily hundreds of times, but repeatable) that the business gains a significant benefit from improving. Are you manually doing research in books for 2 hours a day? Are legal filings taking too long to file? What is the issue that is causing customer perceptable defects (however they define them) or a lack of productivity. DEFINE it. What is the process. Who is affected. What are the definitions of terms. What is in scope and out of scope.

    Second, MEASURE the process. Gather data, real data, on the process. There are some resources that I found on this site that help with measurement system analysis.

    Third, ANALYZE the data you collected to find out what the problems are. Sometimes you don’t even need a lot of data to determine the root cause, but make sure you can tie data directly to a cause. Otherwise you risk wasting time and money going forward.

    Fourth, IMPROVE the system by determining a way to fix the root cause that you determined in the analyze phase. There are tools to help you and the team do this.

    Finally, CONTROL the improvements you have made to the system to ensure that you don’t lose the gains. Control includes statistical tools, if you need them. It also includes dashboards (e.g. filing hours per day), customer complaints and other data that helps you monitor the progress of your process (the one you have defined and improved).

    Does this give you a better idea on how to implement six sigma on legal issues? If not, what specifically do you need more help with?

    Sincerely,
    Carl

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    #65497

    Mayes
    Participant

    The problem with doing the kind of measurement you suggest is that an attorney’s work will have a number of measurable INPUTS, but there needs to be a measurable OUTPUT. There is no way to tell whether two hours of legal research is too large or too small without evaluating the adequacy of the legal opinion produced by it. The only way to do a thorough evaluation is to do the whole thing independently and compare outputs. About the only time there are resources sufficient to do this is when plaintiff and defendant are both preparing legal briefs on the same topic, and even then, there is not necessarily a clearly correct answer. The effectiveness of the argument will depend on a number of things that are beyond the attorney’s control: the facts that created the controversy, the client’s actions prior to giving the matter to legal counsel (making admissions and confessions, etc.), the degree of certainty in the statutory and court-made law on the topic, etc. So one creates a legal brief that is the best one can do, under the circumstances. Thus the process (a) is subjective and non-quantifiable,(b) would cost as much to evaluate as to do, and (c) is not repeatable, since each case has its own facts and its own constellation of applicable law and precedent. What is more, there can be a complete inversion of the profit impact of measurable inputs such as hours of legal research, depending on the context. For example, in a law firm, it is in the firm’s own interest to charge as many hours of legal research as possible to the client, as long as it is justifiable and the client can pay. On the other hand, for an in-house legal department, profits are directly affected by controlling costs, so there is an incentive to decrease legal research time within the bounds of competent legal work. The cost and profit implications of legal work can be out of all proportion to the number of hours spent on it. Sometimes a case which does not on its face involve a significant cost is fought assiduously because it could have significant cost consequences if other potential plaintiffs are encouraged to sue.
    In summary, the cost and profit outputs of legal work are so subject to factors outside the control of the attorneys that no matter how much they control the inputs to the process the outputs and profit results can vary widely and often unpredictably. It is more akin to a chaotic process like a sports competition or war, or a political campaign. It’s somewha

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    #65537

    melvin
    Participant

    I’m a former GE Capital Six Sigma Quality Leader and had, as part of my responsibility, the Legal profession at one of the Divisions. I can assure you that there were inputs and outputs that were measurable. In one situation a DMAIC project yielded a cost savings in excess of $5MM for the division and over $40MM for capital. You can’t just look at the individual attorney, but rather the processes within the whole firm. In the savings I mentioned, it was related to the billing practices and the errors found therein.

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    #65548

    Mayes
    Participant

    I am interested in more details about precisely what was done with these outside counsel billings that produced the cost savings. I believe GE had negotiated reduced rates in return for assurances of business to a smaller group of outside counsel, as well as more billings based on set fees for specific tasks rather than hourly billings. These are practices that many corporate legal offices are adopting, using the sheer volume of their demand for services as leverage in negotiations. But these are not necessarily matters of statistical analysis. Can you provide some details as to the role of Six Sigma in these savings?

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