The Business of Law Download-Issue-7694 PDF

ILTA White Paper March 2010
The Business
of Law
Strong Support for the Practice of Law
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ILTA White Paper The Business of Law 4
6 CONTROLLING COSTS WITH LEGAL
PROJECT MANAGEMENT
by Steven B. Levy, Lexician
Legal project management (LPM) helps attorneys
succeed with their projects in ways that go directly
to the rms bottom line or the departments P&L
controlling costs, meeting schedules, managing risks
and maintaining sanity while doing so. Our author
literally wrote the book on this concept and shares
his knowledge.
14 BETTER DUE DILIGENCE THROUGH BETTER
SEARCH TECHNOLOGIES:
by Liza Madden and Mike Safar,
Autonomy iManage
Modern innovations in search technology can help to
broaden the due diligence associated with the conicts
search without overwhelming the existing processes
or staff. These technologies increase the effectiveness
of the conicts analyst and attorney evaluating new
business. The speed at which conicts are resolved and
new business is approved is ever more important.
18 PUTTING THE BUSINESS BACK IN THE
NEW BUSINESS INTAKE PROCESS
by Yuri Frayman, The Frayman Group
A series of colliding factors impacting law rm
business, including the rise of risk issues and the
fall of the economy (and law rms), has created an
opportunity for rms to transform new business and
risk-related IT cost centers into true competitive
advantages. The result is a redened approach to new
business intake that is strategic, safe and fast.
24 LEAN SIX SIGMA: MASTERING THE ART
OF SERVICE DELIVERY
by Lann Wasson, Husch Blackwell Sanders LLP
While the healthcare and nancial services
industries have recently seen an explosion of
implementations, the legal industry holds the
distinction of being one of the last service functions
to incorporate Lean Six Sigma concepts and tools.
Today a number of factors indicate a growing interest
in Lean Six Sigma within the legal industry.
THE BUSINESS OF LAW
In This Issue
www.iltanet.org The Business of Law 5
While its hard to say anything nice about
the current economy, it has brought to light the
necessity of sound business practices to survive and
prosper. And any area of a rm can be improved by
exing its business-savvy muscles.
Our authors provide a broad spectrum of
experience, knowledge and opinions that theyre
sharing in this white paper. We run the gamut,
starting with improved new business intake and
conict checks; we explore the art of good decision
making and Lean Six Sigma concepts; we look at
cost recovery vis--vis alternative fee arrangements;
and more.
Many thanks to our writers for sharing their
smarts theyre our Better Business Bureau!
Randi Mayes
Editor-In-Chief
36 GOOD RECORDS MANAGEMENT
EQUALS GOOD BUSINESS
by Ganesh Vednere
Establishing a records management program that
is focused on the proper storage and retention
of records helps rms ensure compliance with
applicable record retention laws/regulations and
that they are meeting client expectations. Effective
records management simply makes good business,
operational and nancial sense.
38 ARE ALTERNATIVE FEES THE DEATH
KNELL FOR COST RECOVERY?
by John Gilbert, nQueue Billback
While it may seem that cost recovery and xed fees
are diametrically opposed We dont need to
keep track of copies and faxes since we are now
billing for them as part of a xed fee in fact,
keeping careful track of these types of expenses is
more necessary than ever. Find out how you can do
the math!
42 SUCCESSFUL BUSINESSES ARE BUILT ON
GOOD DECISIONS
by Ayelette Robinson, Littler Mendelson P.C.
Good decisions and good decision-making processes
lie at the heart of every successful business. Our
author provides synopses of two books focused on
this subject. These publications tackle the often gnarly
processes of making good decisions and inuencing
others to make good decisions.
50 ONLINE COLLABORATION ENHANCES
BUSINESS OPERATIONS AT
NEXSEN PRUET
by Carlos Rodriguez, Nexsen Pruet, LLC
Webinar technologies can be very powerful and can
greatly improve your rms collaboration efforts, not
only the traditional uses in the areas of marketing
and education, but also to enhance practice and
business operations. See how one rm leverages the
technology in all these areas with the ultimate goal of
delivering better services to their clients.
T
he rising tide of cost pressure is
lapping at the shores of law rms
and legal departments. Alternative
fee arrangements (AFAs) represent
uncharted waters in which many rms
and clients fear potential reefs and shoals
lurking just below the surface. Business-side clients
with increasing demands steer the ship one way, while
shrinking legal budgets pull it the other. How do legal
practitioners navigate not just a safe course but one
that speedily moves them in the right direction?
Legal project management (LPM) provides a very
practical route through potentially stormy seas. It
features minimal process overhead; a low buzzword
quotient; and most of all, a set of techniques, tips
and tools that attorneys can apply to quickly take
control of their legal projects. The goal is not to turn
attorneys into full-time project managers. Indeed, LPM
STEVEN B. LEVY LEXICIAN
Controlling Costs with Legal
Project Management
works well even for accidental project managers,
such as attorneys without formal project management
training who step up, or are appointed, to run legal
projects. LPM draws on and enhances the skills
attorneys already possess. There are a lot of smart
legal professionals, but long-term success will come to
those who work smarter.

HOW LEGAL PROJECT MANAGEMENT
IS DIFFERENT
Legal project management applies the proven
concepts of project management to the management
of legal cases. It involves not the legal work itself but
the mechanics of the work surrounding the practice of
law and the provision of legal services. LPM modies
the actual project management techniques and
approaches to t the legal world and its practitioners.
Because many of the core teachings for managing
construction or IT projects have no legal analogs,
traditional project management per se is a poor t
for the legal environment. Especially at senior levels,
attorneys can present challenges for traditional project
managers, as they are often resistant to rigid process
boundaries and limits on their actions.
LPM is designed specically for attorneys rather
than for project managers. It takes into account the
constraints surrounding both the practice and the
business of law. Also, the output of legal work is
signicantly different from the output of standard
project management, e.g., a construction project or
piece of software. The different output and different
processes require notably different techniques.
Good legal project management is unobtrusive as
it supports attorneys in delivering higher client value.
It can improve efciency for in-house practices as well
as rms.
THE GOALS OF LEGAL PROJECT
MANAGEMENT
Legal project management yields project
predictability via principles that are
straightforward, practical and business-focused.
How can the members of a practice feel
condent about large xed-fee cases without
faith in their ability to control costs on those
cases? To succeed protably today, rms need
to aggressively contain costs, respond to both
expected and unexpected events, and do only
the work that truly delivers value to the client.
The same holds for work taken on in-house,
though the goal may be to do as much quality
work as possible on a limited budget, rather than
prot. Either way, attorneys need to be able to
predict costs, delivery dates and results.
AFA cases arent the only type that benet
from legal project management. Consider any
case where you want to accomplish one or more
of the following goals:
Control or better understand the cost
Control or predict the time spent
Be better prepared for unplanned events
Deliver only the work necessary to meet the
clients needs
Engage the most appropriate resources,
assigning them the work best suited to them
Improve communication within the team and
with the client
LPM cannot solve these problems by itself. Rather,
it positions its practitioners to take command of these
areas to deliver the highest possible value, benetting
both client and practice.
THE CORE TECHNIQUES OF LEGAL
PROJECT MANAGEMENT
While LPM is a rich and complex subject, the central
techniques are straightforward.
The First Stage: Initiation
Start by building the project around the clients
business problem, which must be the rst thing
you identify and clarify. Most clients have business
problems, even when theyre presented as legal
issues. By focusing on the business problem, you
can negotiate an effective goal or done statement,
clarifying the two or three no more than that
critical success factors that determine client satisfaction
with your work. Identify the stakeholders within the
practice as well as in the clients business, and, for
rms, clarify the clients in-house legal representatives.
Be particularly alert for high-inuence business-side
stakeholders who arent in the foreground. Assess who
can inuence for better or worse the project and
its actual and perceived success.
Above all, the legal team and the client must
agree on the done statement. Such agreement
is a critical part of determining the conditions of
satisfaction for the project. Be sure that the team
and the client concur on the projects scope. Use the
done statement and establish a clear project vision
to inoculate the project against scope creep, that
tendency for a project to pick up new and unforeseen
requirements that redene success. In particular, look
at scope in terms of both the breadth and the depth
of the legal work requested; set a goal, even though
it is not always achievable, of doing only outcome-
determinative work.
Understand from the outset the projects (or
cases) return on investment (ROI) for both the client
and the practice. Minimize the work you do on legal
projects with low returns, but remember that projects
can have returns not easily measured by money.
Use at least informal ROI analysis to develop a cost
structure and budget. Dont be afraid to discuss fees
or departmental chargebacks up front with the client,
but focus on value delivered, not just cost.
Build a clear picture of the team you need for
the project to be successful. Analyze the skills you
need, the type of work, and the right professionals to
achieve the project vision and get to done. Dont
simply draw on a pool of whos available or not billing
within the practice.
Finally, develop a communications plan to
cover items such as the business problem, scope,
fees or chargebacks, project/case budget, billing
questions, status updates, risks, work processes such
as meeting formats and decision making, and change
management. All of these elements will likely come
up during the lifetime of the case. Deciding up front
that you will communicate proactively about them
minimizes difcult conversations in the heat of a matter
and mitigates the occasional client tendency toward
micromanagement. Creating a communications plan
up front only takes an hour or two and will save hours of
pain, difcult discussions and client unhappiness.
The Second Stage: Planning
Planning is the most overlooked step in managing
a legal project. When its overlooked, the result is a
rushed, ready . . . re . . . aim approach.
CONTROLLING COSTS WITH LEGAL PROJECT MANAGEMENT
Its understandable that attorneys and many
project workers seek the thrill of diving into
execution. However, a modicum of planning not only
sidesteps trouble but increases predictability and
cost certainty.
The iron triangle the tradeoffs among scope
of work, schedule and resources (money and people)
governs both planning and subsequent execution.
Theres no free lunch; changing one element affects at
least one of the others.
Break out the project into manageable tasks.
Tasks should be between about 8 and 40 hours
on most projects of a few months or less, and
should revolve around outcome-determinative
work. Foster longer tasks and you lack insight into
task details, perhaps missing important aspects.
Create tasks too short, and you introduce excessive
process overhead. The next step is to assign
the right people to the projects tasks. Consider
tradeoffs, such as a partner costing three times
as much as an associate but who is five times as
effective. Schedule the tasks according to resource
availability, deadlines and dependencies (when one
task affects or depends on another).
Create a budget to keep the costs of the work
within client or departmental guidelines, and share
it with the project/legal team. Budgets and task
descriptions guide the team as well as the project
manager, and help minimize the time spent on work
that the client doesnt value highly.
Consider what metrics and measurements youll
use to track progress. Keep in mind that accurate,
appropriate metrics are your friend on a project, but
misaligned metrics can cause signicant damage.
What you dont know hurts you. Create, and keep
current, a worksheet that lists risks, your exposure
(probability times loss), and what you can do to
mitigate or counter them.
Mind the gap. Watch for the legal gaps
between the clients situation and the desired
outcome; foresee gaps between what you
know and what you need to know; and beware
your own gaps, aka learning opportunities as a
legal project manager. Common gaps include
resources you havent located or that may be
unavailable; lack of agreement on done and
the two or three must-do items; dependencies
you cant fully track or understand; nancial and
budget issues; undecided items that need action
now; misaligned assumptions, both project and
legal; and lack of clarity around work processes,
decision making, and conict resolution.
Finally, watch out for analysis paralysis. Too
little time in planning leads to inefcient, costly
projects. Too much leads to the same result.
The Third Stage: Execution
Execution is the time for driving on the legal
issues, for the attorney/project manager as well
as the rest of the legal team.
When execution overlaps planning, as it
often will, execute simpler tasks rst as you
plan later tasks. Consider breaking projects into
mini-planning/execution cycles, and, as always,
communicate broadly.
Its up to the project manager to deal with
difcult clients, directly or through a client
manager. Focus on their interests and how
done will further those interests.
When circumstances change or differ from
what you originally believed, deal with reality
now. Use change management to control the
possibility of runaway projects. Make sure you have
a decision structure for dealing with changes before
youre confronted with them.
Sometimes the schedule will need to be
condensed when theres more work than imagined,
fewer or less productive resources than planned,
or the client (or court, etc.) imposes new deadlines.
Keep the project team and the client informed of all
schedule changes. Use tools such as SharePoint to
share project and team information. Provide regular
progress updates to the client, not just bills or
chargeback statements.
Seek objective truth
about the project, always.
Tell the truth yourself,
as you know it, when
you know it. Dont point
ngers on failures. As
the project manager,
dont let others point
ngers either; interpose
yourself, even as a target,
if necessary.
The Fourth Stage: Delivery and Evaluation
Delivery and evaluation are important as a nishing
stage to every project.
Obtain signoff from stakeholders that the project
has reached done and that the practice has met the
conditions of satisfaction. Ask the client for feedback.
Even the simple act of requesting feedback and
hearing the client out improves client satisfaction. Its
even better if you nd value in the feedback and use it
to improve future work.
Ensure project documents make it into your
document management solution, whatever that may
be: ling cabinet, e-mail folders, SharePoint or formal
software system. Capture as much knowledge and
learning as you can. Remember that all practices
have a knowledge management system of some sort,
even if its the institutional memory of attorneys (and
support staff) whove been around for years.
Learn what went well on the project and how you
can build on it. Examine what didnt go so well, and
draw lessons on how to improve those aspects on
future projects.
Finally, celebrate project success with some sort
of passage ceremony. It
neednt be an expensive
team dinner; on small
projects, a sincere thank
you for a job well done
can be meaningful.
Celebrate individual
successes as well. Provide
positive, specic feedback
when you catch someone
doing something right. Let
the team share by publicly acknowledging successes.
THE TOOLS OF LEGAL PROJECT
MANAGEMENT
The sharpest tools in the project managers shed
are the attorneys who are as committed to client
satisfaction as they are to legal results. The most
important tool of legal project management is not a
piece of software; it is the framework for organizing
the project and commanding its issues. Good project
managers use a combination of mental models
and software tools to guide projects to successful
conclusions. Software tools without the right mental
models will create more problems that theyll solve,
Law can be a calling,
indeed a noble
calling in support of
civilization and the rule
of law, but the practice
of law is a business.
CONTROLLING COSTS WITH LEGAL PROJECT MANAGEMENT
and they will sour everyone in the practice on the idea
of project management itself.
TOOLS OF THE MIND: THE LPM
FRAMEWORK
The focal point of legal project management is the
delivery of value, not just legal services. LPM drives
value to the client, of course, but also increases value
to the practice.
In a rm, that value comes in the form of clearer
control over prots and an increased ability to deliver
the nonroutine work that clients are willing to pay
highly for. Dont forget that clients, no matter how
much cost pressure they may be applying, need rms
to be successful. They need to know that when they
require specialized legal work, and when theres a lot
at stake, youll be there to support them.
In-house, that value comes from being able to
deliver more and/or stronger legal services to the
many corporate departments you serve. If budgets are
at or down and yet demands continue to increase,
only through a rigorous focus on value-added legal
work can you meet your corporate obligations.
Legal project management provides a framework
for delivering maximum value. The techniques
summarized above are one part of the process,
perhaps the most important part, but they wont work
in isolation.
One key activity is inculcating at least an overview
of business and scal literacy in practice attorneys.
Law can be a calling, indeed a noble calling in
support of civilization and the rule of law, but the
practice of law is a business. Today, all attorneys must
participate in a practices protability. Understanding
the practices business doesnt mean becoming an
accountant or getting an MBA any more than LPM
means morphing into a professional project
manager. It doesnt even require signicant
knowledge of math. But it does require learning
a few basic concepts such as opportunity cost
and return on investment.
Another important concept to understand
is risk exposure. All projects have risks, usually
more risks than you can reasonably manage. A
good project manager examines the projects
exposure to each risk and then works to mitigate
those risks with the greatest exposure for
the practice or the project. Risk exposure is
easily tracked via a spreadsheet, though more
sophisticated tools are also available.
SOFTWARE TOOLS FOR LEGAL
PROJECT MANAGEMENT
Some software tools such as those for
managing risk, sharing knowledge and
communicating within the team can add value
without requiring an inordinate investment of
attorney time.
Spreadsheets:
A series of simple spreadsheets can be the project
managers most important software adjunct.
For example, a risk spreadsheet helps
minimize the effect of unplanned events.
For each potential risk the team sees on a
given project, dene a rough probability of
occurrence and the cost to the project should it
occur. Together, these two factors probability
times cost equal the risk exposure. Spend
more energy mitigating and managing risks
that create higher exposure. In addition, for
each risk, track the mitigation plan, or how to
prevent the occurrence; the contingency plan, which
is what the team will do should the event occur; and
the trigger, representing a clear signal that the event
has come to pass. Continue to track each risk on
a regular basis weekly for most projects until
the probability goes to 0 percent, meaning it can
no longer occur, or 100 percent, meaning that it has
happened. Involve the project team in risk tracking;
the more eyes and ideas, the better within the
limits of client condentiality, of course.
Project Management Software:
Most standalone project management software is
ill-suited for accidental project managers. First,
the tools are complex, have steep learning curves
and are designed for professional project managers.
Second, people often place inappropriate emphasis
on those mechanics of project management that
can be most clearly dened, such as scheduling.
They can provide the illusion of control without
a corresponding lowering of risk or increase in
delivered value.
Index cards tacked to a corkboard above a
horizontal timeline can outdo high-end software for
many projects and for many project managers. Keep it
simple and manageable. Extremely complex projects
with many moving parts may benet from more
sophisticated scheduling and tracking tools, but those
are the same limited set of legal projects that would
also benet from a professional project manager
assisting the team.
Communicating and Sharing Knowledge:
One indispensible communication tool these days is
e-mail; however, the old-fashioned telephone may
be even more effective in certain circumstances. (As
Marshall McLuhan noted, the medium often is the
message.)
Equally important are tools for sharing documents,
status and knowledge among the project team.
SharePoint is excellent in this regard, especially
when coupled with tools to help locate and rene
information. If youre not already using a tool such
as SharePoint, consider a prebuilt extranet-plus-
workspace to facilitate communication, knowledge
sharing and institutional memory.
SUMMARY
Attorneys can use legal project management to
succeed in managing cases even as they do the legal
work necessary to succeed substantively in those
cases, and they can do so without process overhead
or obfuscating buzzwords. Becoming a truly effective
attorney project manager takes practice, as well as
training and coaching; however, LPM also provides
practical techniques, tips and tools that attorneys can
put to use immediately.
Legal project management helps attorneys
succeed with their projects in ways that go directly
to the rms bottom line or the departments P&L
controlling costs, meeting schedules, managing risks
and maintaining sanity while doing so. ILTA
ARTICLE TITLE
INTELLIGENCE V. DATA
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Information is abundant, but insight is hard to come by. Market intelligence
from Monitor Suite gives you the insight you need to make strategic marketing
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industries and prospects that match your rms capabilities. To learn more
about Monitor Suite, call (312) 873-6881 or visit hubbardone.com.
2010 Thomson Reuters L-355674/1-10
Thomson Reuters and the Kinesis logo are trademarks of Thomson Reuters.
L-355674_szA.qxd:ILTA White Papers 1/27/10 12:59 PM Page 1
O
ver the past two decades, law rms
have applied various information
technologies to automate key
aspects of conict of interest
processing during new matter
intake and lateral hire processes. At their best, these
systems have helped to reduce the toil of compiling
reports and maintaining key data used in searching.
Typically, the search technologies embedded in these
solutions are based on simple structured data and
keyword search for text elds such as client, matter or
party name. These legacy techniques have not kept
up, though, with key changes in search technology.
A recent study published by the Text REtrieval
Conference (TREC) found that keyword-based Boolean
searching the kind typically used in the conicts
process returns only 24 percent of the relevant
results, missing 76 percent of the relevant content.
LIZA MADDEN AND MIKE SAFAR AUTONOMY iMANAGE
Better Due Diligence Through
Better Search Technologies:
Meaningful Conict of Interest Processing
The risk associated with a conict of interest claim
can be huge, and as the size of rms has grown, so
has the complexity of best practices. Meanwhile,
conict of interest systems have continued to search
only a xed set of structured data sources, namely the
matters, parties and lists of physical records. The vast
majority of content stored in legal information systems
(e.g., documents and e-mail messages), however, is
unstructured. Legacy technologies are ill-equipped to
provide the scalability and intelligence necessary to
tap these sources during
an organized conict of
interest process. The risk
of ignoring such a large
proportion of the rms
information assets may
no longer be tolerable
for rms that are under
increasing pressure
to improve their due
diligence during a
conicts check.
Modern innovations
in search technology
can help to broaden the
due diligence associated
with the conicts search without overwhelming the
existing processes or staff. Expanding the scope of
searches increases the effectiveness of the conicts
process by exposing potential conicts that traditional
approaches can miss. Conicts analysts productivity
is enhanced through faster processing power and the
advanced clustering capabilities of large results sets,
which includes the ability to automatically lter noise
results from more relevant results.

SEARCH TECHNOLOGIES FOR
UNDERSTANDING THE MEANING
OF UNSTRUCTURED INFORMATION
Innovations in search technology associated with
unstructured data have advanced considerably
over the last decade. Using sophisticated
mathematics, and statistical and machine-
learning techniques, computers now understand
the meaning of unstructured information. For
example, in a conicts search, these systems are
able to understand
that a document
or record that
references Steve
Jobs may also have
relevance to a search
for Apple Inc.
Moreover, the system
can understand
that Apple Inc. is
an organizational
name, distinct from
the phrase an apple
a day. Without
understanding the
underlying meaning
of the content, expanding the target corpus by
400 percent to include unstructured data would
overwhelm the conicts process and put the
rm at a competitive disadvantage. Intelligent
techniques to understand the meaning of
unstructured data are essential for reducing the
noise level in large searches.
There is no one search strategy that
represents a whole solution to improving the
process for conicts checking. A range of
Expanding the scope
of searches increases
the effectiveness of
the conicts process
by exposing potential
conicts that traditional
approaches can miss.
techniques must be combined and properly applied as
an effective response to searches for unstructured data.
These techniques include the following:
Automatic Query Guidance
As the user enters search terms, the system can
look for related terms and searches that may be of
interest to the user to help produce a more accurate
search. For example, typing Einstein might turn up
a more appropriate search such as Albert Einstein.
Other relationships provided through a rm-supplied
thesaurus and through automated analysis by the
search engine might turn up other interesting
relationships such as Enrico Fermi.
Relevancy Ranking
It is quite common for the conicts analyst to be
forced to search on several variations of a name
using wildcard characters and various spellings to
be thorough about nding a conict. Today, these
techniques can be automated, and the results can
be automatically scored as to how close they are to
the original query without the user having to guess
at every variation that can occur within the text. For
example, using relevancy ranking, the system can
determine that an exact match on Albert Einstein is
highly relevant, and Albert went to Einstein Bagels
for coffee may be irrelevant. Relevance can be
further tuned to suit the process, such as prioritizing
results from active matters as higher in relevance than
matters closed more than ve years ago.
Entity Extraction: Finding Names of People and
Companies
By employing various methods of detecting the
context of word usage, technology can automatically
differentiate proper nouns. For example, it may be
important to weight references to General Electric
or GE as much higher in relevance than a document
that simply contains the words general and electric.
Automatic Categorization
Not all content is equal. A at search to nd
documents or data that contain a simple keyword
or wildcard pattern may turn up many thousands of
hits. Todays technology is capable of automatically
determining the context of a document within the
overall repository and can be taught about the rms
unique business processes through simple training
and learning techniques. Once this process is applied,
certain categories can be weighted higher than others.
For example, the rm may assign a high degree of
relevance to e-mail messages referencing discussion
about potential representation or do not represent,
as this type of dialogue is critical to the intake process
but is difcult to determine through traditional
keyword searches. Without automated categorization,
determining the differences among various types of
content depends on the application of structured
metadata to each document, which is both laborious
and typically incomplete.
These technologies, and many others, when
carefully applied to the conict of interest process,
increase the effectiveness of the conicts analyst and
attorney evaluating new business. The speed at which
conicts are resolved and new business is approved
is ever more important. Advances in meaning-based
computing reduce risk by increasing the scope of due
diligence without overwhelming the process. ILTA
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EXPERIENCE
WHERE IT COUNTS:
WHEREVER
YOU WANT TO BE.
If ever there was a time to have proven technology in place, its now. Elite
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help you become more efficient, collaborative and profitable, just as weve done
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Experience, where and when it counts. Learn more at elite.com.
2009 Thomson Reuters L-355303/12-09 Thomson Reuters and the Kinesis logo are trademarks of Thomson Reuters.
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T
he progress in law rm business
development over the past decade
has been driven primarily by the front
ofce. Strategy-based initiatives have
included hiring Chief Marketing Ofcers
and public relations agencies, launching rebranding
campaigns and dynamic websites, as well as lawyers
leveraging social media tools, such as LinkedIn and
Twitter, to connect directly with prospects. On the
ip side, back-ofce technologies to support these
efforts have largely been reactive, facilitating the
functions associated with new business intake, but
not innovating the process as a whole. True, lawyers
still receive the all-important client/matter number
to begin billing. However, a series of colliding factors
impacting law rm business, including the rise of risk
issues and the fall of the economy (and law rms),
has created an opportunity for rms to transform new
YURI FRAYMAN THE FRAYMAN GROUP
Putting the Business Back in the
New Business Intake Process
business and risk-related IT cost centers into true
competitive advantages. The result is a redened
approach to new business intake that is strategic, safe
and fast.

EVOLUTION: NOW SERVING CLIENT/
MATTER NUMBER . . .
Simply put, lawyers want to begin billing right away,
which makes new business intake all about getting
to the client/matter number as quickly as possible.
Historically, however,
new business
intake has been
a largely manual
process requiring a
tremendous amount
of human resources.
Re-keying information,
a time-consuming
and error-prone
process, became the
norm. Lengthy tomes
containing details of
potential conicts
were printed and
routed not only to the requesting lawyer, but to all
others in the rm involved in potential hits. Lawyers
had to take precious billable time to review these long
reports for potential issues or, worse, just skimmed
through them, possibly missing red ags. Bottlenecks
associated with paper-based routing and approvals,
and wasted time spent on repetitive tasks, made
it clear that technology could be implemented to
reduce these inefciencies.
IT has always been charged with nding the right
tools to do the job easily, effectively and with as
little maintenance effort as possible. We need
a customer relationship management (CRM)
system (check), time entry system (check),
document management system (check), and so
on. With such clear-cut needs for other back-
ofce functions, rms were on a fairly level
playing eld. Firm size was what typically drove
the selection of one vendors technology over
another. But when it came to new business
intake, one clear technology solution didnt
emerge.
Depending
on the rm,
information
needed for
evaluating
potential
business and
assigning a
client/matter
number could
come from
time and
billing system
reports, conicts
management systems or any number of
information repositories within the rm. Business
rules for evaluation and approvals also varied.
IT turned to off-the-shelf, bespoke and hybrid
workow tools that could help automate and
streamline processes to reduce the time required
to open new business.
Still used today, these new business intake
systems automate the steps in the review
and approval process, and then trigger the
issuance of the client/matter number. IT did
New business intake
systems in use today were
not likely developed in
cooperation with rm risk
management leadership
and may not be reective
of a rms current risk
prole and practices.
its job to get information to ow from point A to
point B faster. Although an improvement, the term
new business intake became synonymous with the
electronic routing of forms and not with the business
strategy, risk issues and work-habit realities that
must be considered and addressed at every stage.
For the most part, these initiatives were driven by IT
requirements, not business requirements, and the
tools developed reected that view.
WHEN ITS TIME TO CHANGE, YOUVE
GOT TO REARRANGE
Business does not operate in a vacuum, and the steps
to get from a request for a client/matter number to
the issuance of one are constantly in ux as internal
processes, new technologies, risk protocols and
economic considerations change.
PROCESS CHANGES
Every law rm has its own unique methodology
for bringing in and vetting new business, but the
rules are not set in stone. Evaluation criteria can
change, and roles and responsibilities can shift.
For example, some rms have transitioned conicts
vetting from lawyers to conicts analysts, many of
whom are non-billable lawyers tasked specically
with conicts oversight. In doing so, conicts
analysts may need deeper drill-down capabilities,
and information disseminated to involved lawyers
may need to be tailored to a specic relevant hit.
These changes impact information access, analysis,
routing and reporting. Another common example
of a process change impacting new business intake
is a merger between two rms that likely utilize
different technology systems and business rules.
External factors such as regulatory mandates can also
impact a rms new business intake requirements
and information-gathering processes. For example, a
rm expanding its business practices overseas might
now have to scrutinize potential business against
Solicitors Regulation Authority (SRA) guidelines.
TECHNOLOGY CHANGES
Connecting disparate internal systems via APIs
and integrating external sources, such as Dunn &
Bradstreet, are fairly typical processes with most new
business intake systems. However, what happens when
these internal systems change (e.g., a switch in time
and billing systems) or when new data repositories are
added to the mix (e.g., e-mail)? Also consider the real-
time nature of news in todays world. Are results from
external information providers, such as Lexis-Nexis,
D&B and others, as current as Google Alerts, CNNs
RSS feeds or corporate Twitter streams? How can,
and how should, rms keep up with the information
available about clients and prospects?
However, the toughest technology challenge in
most rms is accommodating the way that lawyers
really need and want to work. While most new
business intake systems have moved the approval
process from the physical inbox to the virtual one,
the reality is that lawyers are using their hand-held
devices to keep business moving and to remain
competitive. New business intake processes and
existing systems must deal with the reality of this
increasingly mobile workforce. A lawyer might need
to send a request for new business from a cab in
between meetings or before jumping on an 18-hour
ight to India. Hundred-page-long conicts reports
cant be sent and reviewed or marked up on hand-
held devices. The approval process is once again
slowed, just for new reasons.
PUTTING THE BUSINESS BACK IN THE NEW BUSINESS INTAKE PROCESS
RISK PROTECTION
Firms have signicantly beefed up their risk
management practices in keeping with the global
nature of todays business. Firms need to manage
potential exposures that could result in loss of
reputation, nes or worse. This includes managing
regulatory requirements and other external
requirements such as Know Your Customer (KYC),
as well as managing ethical and privacy concerns.
According to a 2008 Altman Weil study, more than 85
percent of law rms have appointed in-house General
Counsel, and the majority did so in the last few years.
New business intake systems in use today were
not likely developed in cooperation with rm risk
management leadership and may not be reective of
a rms current risk prole and practices. For example,
the rm may now have a rule that no work, even
e-mail communication, can begin against a matter
until related information barriers and ethical walls are
in place. However, the existing new business intake
system may issue a client/matter number to the
requesting lawyer, whose team then begins billable
work on the matter before required security is in place.
ECONOMIC CONDITIONS
No one could have predicted the economys screeching
halt and the impact it would have on rms. This led to
an increased need for strategy and speed in the new
business intake review and acceptance process. Firms
may now pay closer attention to a potential clients
credit score or the accounts receivable of an existing
client. A rm may change acceptance protocols in order
to bring in new types of business to ensure protability
in a tough economy (and yes, that may be in direct
conict with risk protocols as noted above). With so
many rms circling for business, rst mover advantage
Launching Your New Business
Intake (NBI) Project:
Choose your vendor partner wisely. Not every
tool kit vendor understands NBI.
Instead of buying a tool kit to build your
custom NBI workow, consider NBI application
providers. These rms not only understand
the process, they likely leverage sophisticated
workow-based systems that can be extended
for other rm workow needs. This can save
time, resources and budget dollars needed to
get up and running.
Consider Microsoft Windows Workow
Foundation (WWF)-based solutions, as
opposed to proprietary workow engines.
WWF is strong, and for NBI type human-
intensive workows, its the best technology
choice at a fraction of the cost.
Be open-minded. Your way of performing
NBI may be the best you know, but may not
be the best system to implement. Find and
trust a vendor that brings the knowledge
and expertise of many different NBI
implementations.
Be prepared for change management. Any
change in process requires retraining of
people and resetting their expectations. Plan
for it to avoid disappointment and to ensure a
successful rollout and the acceptance of new
technologies and processes.
Try to achieve better alignment of business and
IT goals by ensuring constant communication
between GC and the CIO, and more
importantly the rms entire executive team.
is critical. Also, with collapsing rms, partner layoffs and
associate furloughs, new business intake systems must
also support the vetting of lateral hires and merger and
acquisition activity, from both business strategy and risk
perspectives.
New business intake systems in use today were
built to accommodate specic rule sets. As a result,
these naturally arising changes are largely addressed
via retrots to the system. The more nuanced the
new business intake process becomes, the quirkier
supporting technologies become sometimes
preserving efciency and sometimes not. Firms need to
determine the time and costs associated with updating
these new business intake systems. What are the true
costs associated with workarounds, not just vendor or
consulting fees, but also IT resource drains and the
potentially negative impact on speed and efciency?
Delays impact decisions, which impact speed,
which directly impacts competitiveness and
protability. Further, dated information gathering
and dissemination methodologies impact decision-
making condence and potentially expose the rm to
risk. New business intake technology downshifted to
addressing nuances rather than revisiting the overall
business needs on a holistic scale and thats where
we are today. Its no wonder new business intake and
risk management systems are viewed as cost centers.
REVOLUTION: FROM COST CENTER TO
PROFIT CENTER
One upside of the current economic situation is that
it has served as a highly disruptive force that brings
with it the opportunity for new leaders to emerge.
Law rms are rening their business strategies and
applying new dynamics to old business practices,
choosing to focus on long-term planning supported
by strategic investments that will ensure a return on
investment. By helping to put the business edge back
in new business inception, IT can play a major role in
leveraging new strategies and technologies to not only
support the client intake and risk management needs of
the business, but also to help the rm proactively and
protably address these core functions.
Sure, getting to the client/matter number fast is
still the name of the game, but when you take a holistic
view and address the true business needs of the rm,
you have the potential for a comprehensive technology
platform that can intelligently support the end-to-end
needs of the business and can transform cost into prot.
CIOs are vital members of leadership teams for
rms on the road to reinvention. IT will play a pivotal
role in the new frontier. Success is dependent upon
the ability to look beyond whats in place today and
understanding whats possible tomorrow.
In leading this charge, consider these next-
generation concepts:
Holistic Approach:
Alignment of business goals, business development,
risk management and technology.
24/7 Capabilities:
Decisions and resulting actions available and
implemented around-the-clock (in minutes, not days.)
Global View:
Ability to accommodate mandates that may vary from
locale to locale (even for the same client), multiple
language requirements and time zone differences.
Mobility:
Two-way communication for receiving and sharing
PUTTING THE BUSINESS BACK IN THE NEW BUSINESS INTAKE PROCESS
information without any compromises to detail or
quality.
Collaboration:
Seamless information ow across the rms systems
and staff.
Weighted Information:
Data from multiple internal and external sources
ranked according to quality.
Smart Logic:
A continual analytic view incorporating decision
engines that gain intelligence as they go
Continuous Search:
Ongoing mining of existing client and prospect data
repositories (structured and unstructured) to nd
opportunities and red ags.
Automation:
Extended workow to simultaneously automate the
lockdown and population of work-in-process systems
at the same time a client/matter number is triggered.
Audit Trail:
Documented compliance of every step in the new
business inception process.
Fluidity:
Ability to easily and continuously accommodate
changes with no additional costs or resources required.
Let your rms technology demonstrate a strategic
view of new business intake and conicts, a critical
step in better business development. ILTA
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A
lthough surveys of corporate counsel
have noted the need to control
costs for a while, that need now
tops their list of priorities for the rst
time in three years. Large numbers
of corporate counsel are also reporting that the
majority of their law rms have not taken seriously
their suggestions to increase the value of their
services, and some outside counsel have provided
feedback indicating that services value has actually
declined. This lack of responsiveness by law rms is
prompting in-house counsel to take bolder action to
drive efciency through value-based strategies and
the utilization of online matter management systems,
which can evaluate law rm performance.
While many lawyers continue to debate whether
corporate counsel will actually go forward with these
plans, some rms have recognized that gaining a
sustainable competitive advantage requires a better
understanding of their costs of production and a
more collaborative service delivery model. Given the
growing number of case studies that demonstrate
the effectiveness of Lean and Six Sigma concepts in
service industries, law rms should investigate how the
LANN WASSON HUSCH BLACKWELL SANDERS LLP
Lean Six Sigma: Mastering the
Art of Service Delivery
framework of Lean Six Sigma can streamline internal
operations and translate conversations about value
into lower costs, higher quality and levels of client
satisfaction that result in larger portfolios of work. In
doing so, law rms may also discover how to clear the
common hurdles to the successful deployment of Lean
Six Sigma in professional services.

THE INVISIBLE HAND
Whether as a result of new leadership, large technology
implementations or growth through mergers, most
law rms have pursued operational excellence by
incorporating best practices and by benchmarking
their technology systems and programs against industry
standards. While appreciating the merit of these
approaches, Michael George, Ronald Snee and Roger
Hoerl, formerly at Toyota, DuPont and GE respectively,
contend that service functions and businesses
operate with more complexity and less technical and
management infrastructure than their manufacturing
counterparts, which results in enormous amounts of
activity that have no value from the clients perspective.
Since at least half of the work to deliver services is non-
value-added, George contends that Lean Six Sigma can
often reduce the cost of service processes by 30 to 80
percent, increase the speed of service delivery by 50
percent, and the capacity of teams by 20 percent.
Undoubtedly, law rms t this prole because
the functional areas serve hundreds of partners who
are promoting their own practices and cross-selling
others. Often law rms lack the line of sight necessary
to connect cost and value, because processes
remain undocumented; the division of labor hinders
communication across functional and legal areas; and
rms lack a common language with which to discuss
strategies for improvement. Furthermore, billing by
the hour focuses managements attention on
utilization and realization versus metrics like
cycle time and process efciency. By researching
how Lean and Six Sigma methodologies can
be applied to legal service delivery, law rms
can start to gain visibility into the themes and
variation of their workows and understand
how to orchestrate projects that minimize the
unintended consequences of the billable hour.
THINKING LEAN
Lean and Six Sigma address these environmental
factors through the application of methods
and tools originally developed in the
Toyota Production System and Motorolas
Quality Initiative, and then later at General
Electric under Jack Welch. As these process
improvement methods have evolved in services,
they have become problem-solving strategies
that fundamentally change the way individuals
think and teams collaborate. In particular,
Lean activities are advantageous because they
draw on the knowledge and experience of
people doing the work. In a recent interview
with iSixSigma Magazine, Lisa Damon, Chair
of Seyfarth Shaws Labor & Employment
Department explained, There are denite
hierarchies or strata in all law rms. Seyfarth
Shaw has been replacing the old hidebound
structure that reinforced division with a team
dynamic that brings partners, associates and
support staff together. People...see the full value
each person can bring to the table, regardless
of what their title or position in the rm may
be. Sylvia Coulter, a Six Sigma Green Belt and
Vice President and Chair of Hildebrandt Baker
Robbins Client Development and Growth Practice
concurs. By treating people internally with the same
respect lawyers treat their clients, rms can build
incredible loyalty within legal teams and throughout
the organization.
From an improvement standpoint, instead of simply
trying to cut costs, Lean strives for growth through the
enlarged capacity of more effective processes. For
instance, in a legal context, a real estate client might
want to reduce the time
required to negotiate and
close contracts and leases
in order to open more
stores within a certain
period of time. Using
Lean methods, lawyers
would rst map the legal
process and then identify
and remove activities,
such as negotiating
certain provisions,
which do not add
value from the clients
perspective. Attorneys
would then reorganize
the remaining activities to minimize the interruptions,
wait time and unnecessary transfer of information in
the workow. Supervising lawyers would also identify
which activities should be assigned to associates and
paralegals to maximize value to the client. Since 20
percent of the activities typically cause 80 percent of
the delay, as George notes, increasing the speed of a
small percentage of the work has a disproportionately
positive effect on quality and cost. Thus, increasing the
proportion of valued-added activities in the workow
(process efciency) and organizing the process more
effectively (cycle time) results in faster lease closings
and more store openings.
STRENGTH IN NUMBERS
In addition to being a statistical concept, Six Sigma
is a business philosophy that addresses the need
for short-term gains while developing talent and
improving operations. In his book The New Six
Sigma, Tom McCarty, former Vice President of
Consulting and Training
Services at Motorola
University, underscores
the importance of
understanding the Voice
of the Customer (VOC)
by emphasizing that
teams should describe
their perception of
client expectations early
on in an engagement.
In a 2009 ABA paper,
Betsy Collins noted that
because every discovery
project is different, it is
important and relatively
easy to implement the voice of the customer Six
Sigma application into your projects. Its simply good
business to pay attention to how your client wants
to frame the scope of the project and what they
view as the crucial elements. When nearly every
industry survey of client service has identied a large
gap between attorney perception and actual client
satisfaction, improving attorneys capabilities in this
area helps reconnect costs to the value of services.
By learning how to identify, interview and survey
stakeholders and prioritize their value propositions,
In addition to being
a statistical concept,
Six Sigma is a business
philosophy that
addresses the need for
short-term gains while
developing talent and
improving operations.
LEAN SIX SIGMA: MASTERING THE ART OF SERVICE DELIVERY
lawyers and project managers can translate general
expectations of responsiveness, quality and cost-
effectiveness into measurable factors that Six Sigma
denes as Critical to Quality, which can then be
validated with clients and communicated to project
teams. Understanding, how to interpret the voice
of the client is even more important when legal
departments approach law rms from the standpoint
of their own Six Sigma programs.
Six Sigma also provides a world-class improvement
methodology, DMAIC (Dene, Measure, Analyze,
Improve and Control), which emphasizes the
standardization of activities, data-based decision
making and continuous improvement. Although Six
Sigma is most famous for its statistical measurement
of product defects, in a service environment, defects
are not simply mistakes and rework, but any activity
that does not add value from a clients perspective.
In a recent article in iSixSigma Magazine, David Niles,
President of SSA & Company, a leading consultancy
for Lean Six Sigma, points out the importance of data-
driven improvements. Their research of 500 companies
showed that attempts to improve a process without a
data-based approach result in a misdiagnosis of the
root cause or causes of a problem nearly 40 percent of
the time.
Simply measuring a process is usually a challenge
for law rms, since most systems are designed only
to capture time for billing purposes. If one follows
Richard Sabats approach in his case study on
mortgage loans, one could measure the number of
hours each partner, associate and paralegal spent
during each day on activities to complete a legal
project. Then one could plot the data points along an
x-axis (hours) and y-axis (days) to see the distribution
of time for each type of timekeeper in a matter. Used
alongside a process map, graphing a sample
of these matters would show stakeholders the
most critical periods of delay and rework, the
greatest areas of variation in the amount of
time needed to complete certain tasks, and
opportunities to improve value by adjusting
timekeeper assignments. Finally, by establishing
a baseline for a type of matter, lawyers could
better understand the costs of production
for the service and approach alternative fee
engagements with greater condence. In the
context of Six Sigma, continuous improvement
goes beyond lessons learned by incorporating
project data, client feedback and the teams
observations to make processes more effective.
GREATER THAN THE SUM OF
ITS PARTS
Although Lean and Six Sigma methods can
be used independently, often companies in
service industries have minimized the trade-offs
between quality and cost/time by integrating
the two methods. Lean complements Six
Sigma by reducing complexity, eliminating
non-value added activities and improving cycle
time. Three-to-ve day Kaizen sessions can
also accelerate DMAIC methods and balance
resource constraints through intensive, action-
oriented workshops. Six Sigma complements
Lean by placing client value front and center,
using data to reduce variation within key
activities and creating an infrastructure to
manage and sustain results. In an iSixSigma
Magazine editorial, Jessica Harper relates the
conviction of Bob Silvers, Managing Director of
SSA & Company, that when used together, these
two methods can solve 90 percent of the problems
faced by organizations today.
The combination of both methods is so effective
that successful organizations gain a competitive
advantage in their industry. For example, Snee
reported in Six Sigma Beyond the Factory Floor
that the Commonwealth Health Corporation saved
$800,000 in the rst 18 months, prompting its CEO to
announce, I wish we had done this ve years earlier .
. . the competitive edge the organization has gained
through this process is incredible. By focusing on
the client experience, Silvia Coulter commented in a
recent interview that a law rm can become the Ritz-
Carlton or Starbucks of the legal industry. She noted
that process improvement is the key to unlocking the
doors to additional revenue because a consistent level
of quality across the rm makes it really easy for clients
to send more work to the rm.
LESS IS MORE
One of the primary challenges for service
organizations is to adapt the concepts, vocabulary
and tools of Lean Six Sigma to their industry so
that managers can apply these manufacturing
methods to their projects. Fortunately, the service
industry literature and industry surveys offer some
guidance in understanding how many tools to use
and whether to use the more statistical tools. Snee
recommends including some initial training in
statistics so that managers can not only learn the
more advanced tools, but also understand how to
integrate them as they solve problems. However,
he also points out that you dont need an army
of professional statisticians to make Six Sigma
work. Ordinary people can be trained to conduct
Six Sigma projects successfully. With industry-
appropriate training and the right mix of tools,
managers in service industries can keep the rigor of
Six Sigmas data-based approach without having to
become the legal equivalent of an engineer.
Michael Marxs surveys of Lean Six Sigma
practitioners also show that of the 50-odd tools
available for use on projects, only a few tools
process mapping, project charters and brainstorming
are used all of the time by the majority of certied
professionals, and a few more Pareto charts, 5
Whys, basic statistics and graphical charts are
considered tools of choice. Marxs surveys also
indicate that Lean tools, such as process mapping, 5
Whys and the 7 Wastes of Lean, are often preferred
when starting an initiative because they are easier
to learn, offer faster returns and develop a process
improvement mind-set. In services, more practitioners
also use Voice of the Customer, Stakeholder Analysis
and SIPOC, which identies the suppliers, customers,
inputs and outputs of a process.
Since the nancial benets of Lean Six Sigma
initiatives stem from the cumulative result of successful
projects, organizations also need to pay attention to
their ability to manage projects and change over the
long term. In the article Manage Your Human Sigma,
John Fleming argues that while widespread use of Six
Sigma and TQM methodologies has resulted in vastly
improved product quality over the past two decades,
there is considerable local variation in quality at
the individual and team levels in service and sales
organizations. To address the variability in Human
Sigma and the entropy factor, organizations must
not only offer training to develop process thinking,
but also adjust policies and incentives to reward
attention to continuous improvement, hold sponsors
accountable for results and develop communication
plans to confront parochial tendencies. Over the
last few years, many legal organizations have
expanded their ranks to include project managers
and business and knowledge management analysts to
minimize the costs associated with large technology
implementations and practice group development.
Since these roles often span functional boundaries,
these managers and analysts can play a key role in
reinforcing new processes, developing skills, coaching
teams and sustaining the overall initiative.
LEGAL DEPLOYMENT CHALLENGES
While the literature applies case studies from
law departments to all areas of the legal vertical,
there may be differences between the way legal
departments and law rms adapt these concepts to
their organizations. Most of the discussion about legal
departments tends to reference Six Sigma methods
over Lean strategies, possibly because the case
studies come from larger organizations that
already have functioning process improvement
initiatives. Legal departments may also start
by applying Six Sigma to litigation processes,
such as e-discovery, because the process is
already well-dened and an important element
in a departments effort to manage risk. Finally,
as Betsy Collins observed in Six Sigma, the
Discovery Process and the Corporate Legal
Department, the metrics that result from
process improvement projects may justify
increasing law department technology budgets,
which in turn provides additional tools to
monitor and manage value-added strategies.
On the other hand, law rms may be more
attracted to Lean methods because Lean
requires a more modest infrastructure and can
. . . law rms may be more
attracted to Lean methods
because Lean requires a more
modest infrastructure and can
generate results more quickly.
generate results more quickly. Lean can also have a
greater positive impact on an organizations culture,
which helps teams overcome resistance to change.
Marxs industry surveys in iSixSigma Magazine also
indicate that smaller companies ($50 million in
revenue) tend to use Lean, while larger companies
($1 billion in revenue) tend to deploy Six Sigma.
Law rms may also
choose to start with
Lean because the
initial investment is
smaller. Surveys from
the American Society
for Qualitys healthcare
division indicate that
the start-up cost for a
Lean project is usually
between $25,000 and
$50,000, whereas
Six Sigma initiatives
are usually closer
to six gures. Since
each organizations
objectives and time
frames are different, it
is important to conduct
a readiness assessment
and create a deployment plan in order to understand
the full extent of ones investment.
WERE DIFFERENT
While the healthcare and nancial services
industries have recently seen an explosion of
implementations, the legal industry holds the
distinction of being one of the last service functions
to incorporate Lean Six Sigma concepts and tools.
Even those rms that have recognized the need
for greater operational efciency or a different
value proposition have undoubtedly encountered
resistance when discussing process improvement
strategies. Many attorneys perceive these methods
as manufacturing initiatives that dont apply to
professional services or as management fads that
divert resources away
from billable projects.
George and
Snee have identified
the perception that
were different as
the fundamental
reason for resistance
to deployment. This
attitude reflects a core
belief among lawyers
that legal work is
more of an art than a
science. In an interview
with the Creative
Growth Company last
year, Paul Mattingly,
Seyfarths Atlanta office
Managing Partner
explained, There is
definitely an art to what we do . . . It is a humbling
thing to say that you can break down what I do into
processes and steps and you can maybe move some
of that away from me, because I need to stay busy
myself. Since account managers in firms are also
the producers of legal services, there is a greater
trade-off within legal between the time required for
training and billable work. To address the concern,
Seyfarth incorporates leadership training in their
While the healthcare
and nancial services
industries have recently
seen an explosion of
implementations, the
legal industry holds
the distinction of being
one of the last service
functions to incorporate
Lean Six Sigma concepts
and tools.
program, so that investments made by attorneys
contribute to their personal value and career
potential. While overcoming these convictions
can be challenging, Damon attributes greater
acceptance at Seyfarth to early internal success,
practical experience and client enthusiasm for the
program.
While there are certainly similarities between
legal and healthcare, and between service functions
and service vendors, there are also some notable
differences that may make law rm implementations
more challenging. Attorneys account for nearly
half of the workforce in law rms, whereas doctors
represent only about four percent of the staff in a
hospital. Despite their numbers, Ray Bayley, President
of NovusLaw points out in an interview with Bruce
MacEwen that the outsourcing literature shows that
between 70 and 80 percent of legal work is not lawyer
work, so many of the activities used to produce legal
documents and arguments are susceptible to process
improvement methods. Like so many other types of
initiatives, it is important to walk before one runs.
By demonstrating how Lean Six Sigma can improve
legal service delivery on internal projects important to
stakeholders, rms can challenge the were different
perception and build momentum for these programs.
Like talented musicians who attend conservatories
to master technique and theory, lawyers may also
discover that intensive study of Lean Six Sigma can
transform their creative work into world-class service.
TOTALED QUALITY MANAGEMENT
When close to 60 percent of all corporate Six Sigma
initiatives report failing to deliver expected results, it
is not surprising that process improvement proposals
are met with skepticism. Reminiscent of the time
when The Washington Post coined the phrase,
Totaled Quality Management, September
2009s BusinessWeek reported a rising interest
in Six Sigma due to the tough economy, and
admonished managers from seeking short-term
gains through its methodology. Earlier this year,
the Wall Street Journal also cautioned against
hurried deployments in a recent article titled
Where Process Improvements Go Wrong.
The fact that hyperbole has followed process
improvement should serve as a reminder that
Lean Six Sigma initiatives typically require two
years of thoughtful adaptation, training and
practice before reaching a point of mastery
and the critical mass necessary for cultural
change to begin. When properly applied, these
methodologies still represent a sound way to
run an organization. As Fortune quoted Ray
Stata, CEO of Analog Devices in 1993, Total
quality essentially involves attention to process,
commitment to the customer, involvement of
employees and benchmarking best practices.
It is hard to believe you cannot benet from
that. As law rms consider new ways to operate
effectively and provide greater value to their
clients, Lean Six Sigma can offer rms fresh
insights into their costs of production and
service delivery.
Furthermore, law rms can clear the common
hurdles to successful deployment, such as
dedicating human resources and budget,
providing training, aligning projects to strategic
priorities and focusing on client value versus the
methodology, by drawing on a proven game
plan developed over the last decade of Lean
Six Sigma service deployments. In fact, Snee
and Hoerl conclude that the key difference between
earlier improvement methods and more recent
implementations is the existence of an infrastructure
of management systems that support and sustain
deployment. Executives from companies as diverse
as Bank of America, Stanford University Hospital and
Clinics, ITT Industries and Seyfarth Shaw all emphasize
that personal executive involvement in projects and
strategy is the key to overcoming these stumbling
blocks. In an interview with iSixSigma Magazine,
Thomas Sager, Vice President and General Counsel for
DuPont, said executive engagement is critical, because
it is too hard to work on continuous improvement
if you have people saying that weve been doing
things the same way for 25 years and thats ne.
Leadership engagement, instead of mere support and
commitment, is the essential ingredient in overcoming
both the were different attitude and the perception
that TQM is merely another management fad.
LEGAL CASE STUDIES
As in-house counsel grow bolder, only time will tell
whether more law rms will move forward with Lean
Six Sigma initiatives to tackle the challenges of cost
and value. Today a number of factors indicate a
growing interest in Lean Six Sigma within the legal
industry. First, as the ACC Value Challenge continues
to gain momentum, more law rms are considering
process improvement as a means to understand their
costs in alternative fee arrangements. Second, there
are a growing number of blog posts, conference
sessions and webinars on this topic, as well as training
courses, such as Hildebrandt Baker Robbins Work
Process Redesign program, which explicitly ties
the knot between project management and process
improvement. By some accounts, more than100
legal organizations have requested presentations on
process improvement over the last few years.
In part, the number of legal departments interested
in Six Sigma is growing because more than half of
the Fortune 500 companies have already deployed
Six Sigma to an extent. Organizations like Bank One,
Caterpillar, DuPont, GE, IBM, ITT, Jones Lang LaSalle,
Kodak, Lockheed Martin, Motorola, Raytheon and
Texas Instruments have also implemented Six Sigma in
legal services. Collins noted last spring that in many
companies the general counsel are being held to the
same standard and metrics as other business unit
colleagues and are expected to implement process
improvement in measureable ways. In companies that
have embraced Six Sigma, implementation of the
philosophy is as serious in the law department as it is
on the manufacturing oor. Many law rms reviewing
their institutional client lists will likely discover any
number of their top clients already practicing Six
Sigma methods.
Some writers have speculated that the use of Six
Sigma in legal departments may actually accelerate
the trend toward assigning matters to more efcient
law rms. In Robert Ambrogis Fortune article, For
the Record, James Michalowicz, former litigation
manager at DuPont and Tyco, pointed out that a
number of law departments are now seeking to
integrate the so-called Six Sigma method of quality
improvement into the management and monitoring
of their outside law rms. The trend to assign work
on the basis of efciency has already begun in some
areas. In November 2009, Tyco announced a two-year
contract with Eversheds, which, through the utilization
of project management, had reduced Tycos fees
by 27 percent and the number of litigation cases
by 60 percent, resulting in a 300 percent increase in
high quality work for the rm. Likewise, a Corporate
Counsel article from December 2009 reported that
United Technologies had engaged Seyfarth Shaw to
handle almost all of the companys single-plaintiff
employment litigation after the rm introduced
associate general counsel Chester Paul Beach to the
SeyfarthLean methodology. As assigning work on the
basis of efciency becomes more commonplace, law
rms will need to discover more accurate means of
bidding for work to remain competitive.
Over the last decade, the number of law rms
deploying Lean Six Sigma has also grown, although
few rms are talking about their projects. An early
case study from Morgan Lewis demonstrated how
the application of Six Sigma reduced the cost of
mortgage loan services by 25 percent. Prior to its
acquisition by Bryan Cave, iSixSigma Magazine
reported that Powell Goldstein utilized Six Sigma
rst internally to improve processes like associate
retention and recruitment, and then externally
as its client relationship management program
evolved with its Six Sigma clients. A recent Legal
Project Management blog post by Paul Easton
also discussed how Morris James has begun to
apply Six Sigma to its e-discovery process. Finally,
in a number of recent interviews, Seyfarth reported
that it has completed over 30 internal projects,
from supply purchasing to nancial management to
reducing the time-to-close conicts from two weeks
to 24 hours. In addition, some of their more recent
projects have included M&A transactions, trademark
prosecution, non-compete litigation, real estate
leasing, e-discovery, and collective actions. Seyfarth
claims that its approach works across all areas of law
and that it can consistently reduce the cost of legal
services by 15 to 50 percent.
GAINING THE UPPER HAND
Law firms serious about understanding their
costs of production and finding alternatives
to their value proposition should investigate
how Lean Six Sigma can help them gain a
competitive advantage in an industry defined
by the billable hour. As more law departments
pursue the management of value through a
greater use of Six Sigma and technology, it
will become more difficult for firms to maintain
the presumptions that process improvement
doesnt apply and that the expectation of
cost savings is fleeting. However, executive
leadership should complete the proper due
diligence and weigh the cost of investment
over the long term before jumping into a large
scale process improvement initiative. Many
firms will undoubtedly walk before they run
by implementing Lean Six Sigma on a project
basis to streamline their internal operations
before approaching clients directly. While each
organizations leadership ultimately overcomes
resistance to new initiatives in its own way,
there is now ample evidence to suggest that
law firms can deploy Lean Six Sigma strategies
effectively to reduce costs and engage clients
in a dialogue about value and growth. ILTA
Bibliography
Ambrogi, Robert. For The Record, Fortune, May 15, 2006.
www.timeinc.net/fortune/services/sections/fortune/pdf/051506_GoToLawFirms.pdf
Burnsed, Brian and Emily Thornton, Six Sigma Makes a Comeback, Business Week, September 10, 2009.
Chakravorty, Tya S. Where Process-Improvement Projects Go Wrong, The Wall Street Journal, January 25, 2010.
Collins, Betsy P., John H. Goselin II, Caroline B. Keller, Joe Mann and Andrea Tecce. Six Sigma, the Discovery Process and the Corporate Legal
Department, ABA Section of Litigation Annual Conference, April 19-May 2, 2009.
Coulter, Silvia L. Leading with a Forward Focus, Law Practice Magazine, April/May 2009.
Creative Growth Company interview with Paul Mattingly, Seyfarth Shaw.
http://blog.professionalatlanta.com/2009/08/17/six-sigma-and-the-selfdestructive-habits-of-professional-services-rms.aspx
Fleming, John H., Curt Coffman, and James K. Harter, Manage Your Human Sigma, Harvard Business Review, July-August 2005.
Friddle, Jamie. Due Process, iSixSigma Magazine, July/August 2008.
George, Michael. Lean Six Sigma for Service (New York: McGraw-Hill, 2003).
Harper, Jessica. So Happy Together. iSixSigma Magazine, September/October 2009.
Jacob, Rahul. TQM More than a dying fad, Fortune, October 19, 1993.
Levett, James. Better Together, Executive Healthcare Management, July 2009.
http://www.executivehm.com/article/Better-Together/
MacDonagh, Catherine Alman and Laura Colcord, Process Improvement for Law Firms, Legal Sales and Service Organization, 2008.
http://www.legalsales.org/pdf/processimprovementforlawrms.pdf
MacEwen, Bruce. A Conversation with Ray Bayley of NovusLaw, www.AdamSmithEsq.com, December 10, 2009.
Marx, Michael. Lean: Benets and Challenges, iSixSigma Magazine, September/October 2009.
Marx, Michael. Size Matters, iSixSigma Magazine, November/December 2007.
Marx, Michael. The Lean Six Sigma Toolset, iSixSigma Magazine, November/December 2009.
McCarty, Tom and Matt Barney. The New Six Sigma. (Upper Saddle River: Prentice Hall PTR: 2003).
Miller, Amy. Seven Sigma, Corporate Counsel, December 1, 2009.
Reynard, Sue. Getting Down to Gearing Up, iSixSigma Magazine, September/October 2009.
Sabat, Richard J., Morgan Lewis. Case Study: Six Sigma Legal Services for Mortgage Loans, www.mortgagebankers.org/les/conferences/2007/2007
techconference/5ApplicationofLeanSixSigma-RichardSabat.pdf
Schmidt, Elaine. Law and Order, iSixSigma Magazine, November/December 2009.
Snee, Ronald D. & Roger W. Hoerl, Six Sigma Beyond the Factory Floor (Upper Saddle River: Pearson Prentice Hall, 2005).
Using Six Sigma to Reduce Law Department Costs, The Metropolitan Corporate Counsel, March 2005.
Weiss, Genna. SixSigmaIQ interview with Lisa Damon and Carla Goldstein, Seyfarth Shaw. http://www.sixsigmaiq.com/podcenter.
cfm?externalid=304
ARTICLE TITLE
I
n todays highly litigious world, the question
of whether to have an internal records
management group is a no-brainer. The
bigger question for rms is whether the
records management group is an effective
organization that has a say in how records should be
managed at the rm, or whether the group performs
simply a passive function, principally acting as a
conduit for archiving rm records.
A good records management program creates
efciencies in the overall litigation process by
providing key infrastructure channels to store,
retain, process and produce records. Such a
program can help facilitate better management of
client information and assures its condentiality,
integrity and reliability. All clients expect that their
information is retained in a secure manner, but
the reality, in some cases, is somewhat different.
We have all heard the story of records found in
dumpsters, and woe unto the law rm that happens
to be associated with such a story.
However, the pace at which law rms or internal
counsels operate can make it hard to apply good
information management practices. Barely has
a matter nished when three more are
already in the pipeline, and all require
immediate attention. In addition, a matter that was
closed a year ago may now have to be reopened
and all relevant material reviewed across various
le servers, hard drives, separate repositories and
offsite storage. What can law rms do to ensure
that their primary legal work is not affected while
they work to establish sound records management
practices? Here are some key considerations.
Funding:
Law rms must allocate at least some funding to
the records management program and provide
for adequate hiring of personnel, equipment and
technology to support the rms needs. Asking
for money is never fun, but if law rms want good
records management, they have to get serious
about providing at least enough funds to sustain an
effective records management group. Rather than
make the junior paralegal the records person, a rm
should hire an experienced records manager to help
establish and maintain the program.
Policy:
Having a documented records management
policy that is consistent across all the legal
practice groups is fundamental to ensuring record
GANESH VEDNERE
Good Records Management
Equals Good Business
management success. While it may be hard to
get everyone to agree to the policy components,
it must be done, and done sooner rather than
later. If there is an existing policy, it should be
evaluated to see if it is still relevant in the ever-
changing business landscape.
Retention Buckets:
Records need to be retained for set periods of
time (retention periods or categories) depending
on applicable federal, state and industry laws, or
business and client operational needs. It is easy to
go overboard and create many such categories,
usually with the result that they are rarely
recognized and often misunderstood. Instead,
record retention categories should be kept to a
minimum, and it should be easy to store, retain
and dispose of records.
Simple Procedures:
A records management operational manual that
looks like a phone book may not always work in
practice. Records management procedures should
be simple, easy to understand, straightforward
to follow and be unambiguous in stating what
attorneys are expected to do.

Technology:
Technology should be used to help remove the
operator error aspect of records management.
Whether it is managing les or e-mail messages,
there are a variety of tools in the marketplace that
automate the sometimes arduous task of records
management. Some of these tools are fairly
inexpensive and can certainly pay off in the
long run in terms of better record ndability
and operational efciencies.
Training:
Getting everyone at the rm trained on
proper records management practices
is not always easy. There are always
meeting conicts, pressing matters and
important court dates to attend. However,
senior members of the rm must make it
unequivocally clear to all personnel that
training is a must-do.
Compliance:
At some point, rms must establish a
precedence of adverse action when someone
does violate the records management
policy. Periodic compliance checks may
be undertaken to determine how well the
records management processes are being
followed and adopted across the rm, and
provide for suitable corrective actions.
Establishing a records management
program that is focused on the proper
storage and retention of records helps rms
ensure compliance with applicable record
retention laws/regulations and that they are
meeting client expectations. Effective records
management simply makes good business,
operational and nancial sense. ILTA
W
hile it would seem that xed
fees and at rates would
make cost recovery systems
unnecessary for law rms, it is
more likely that the opposite is
true. Corporate law departments may be requesting
xed fees, but they are providing little insight into
how these arrangements should be priced. So, while
it may seem that cost recovery and xed fees are
diametrically opposed We dont need to keep
track of copies and faxes since we are now billing for
them as part of a xed fee in fact, keeping careful
track of these types of expenses is more necessary
than ever.

SHIFTING THE RISK
With a traditional billing model, law firms bill
their fees hourly and bill expenditures as they are
JOHN GILBERT NQUEUE BILLBACK
Are Alternative Fees the Death
Knell for Cost Recovery?
incurred. The client incurs all risk. If the project
requires more work than is anticipated, the firm bills
more hours, and the client spends more money. The
same is true on recoverable expenditures. If the firm
makes more copies than expected, the client pays
for them.
In recent years, corporations have tried to place
some controls on their law rms, largely through
outside counsel guidelines. Firms were generally
limited in how much they could charge for copies or
how many attorneys could attend a deposition. While
this provided the client
with more control, it
did not shift any risk.
Unless they were in
direct violation of the
guidelines, the client
still had to pay the bill.
Put another way, the rm
might agree to bill no
more than 15 cents per
photocopy, but there
was no limit on how
many photocopies could
be made.
Since the beginning
of this recent Great Recession, more and more
corporate law departments have been trying to shift
risk onto their rms, asking rms to provide a simple
xed fee for a project. The rm provides a single
number and thats what the rm is paid. (This is an
oversimplication in many cases: the fees may be
based on project stages or particular outcomes. But
the premise holds true.) This environment forces law
rms to do a better job of controlling costs, as the
rms are no longer rewarded for overruns.
FIX THE LEAK BEFORE YOU FIX THE FEE
Under an hourly billing model, it is necessary
to keep track of the number of hours spent
on a project in order to bill for them. With a
xed fee, it is necessary, instead, to track hours
to make sure that the project is protable.
Similarly, in a traditional model, the rm must
track recoverable expenses in order to bill them
back to the client. In a xed-fee environment
despite the fact that these specic charges
are no longer recoverable it is even more
important to track
all project-related
expenses. There is
no quicker way to get
the rm in nancial
trouble than by
quoting xed fees
without absolute
clarity as to the rms
actual expenses
related to the matter.
For a law rm,
xed fees require a
detailed protability
analysis by practice
area, by client and even by matter. Some
expenses, such as client lunches and business
development costs, are clearly the rms
responsibility (overhead), but these still must
be considered when calculating the protability
of a client or matter. Expenses related to
photocopies, scans, faxes and phone calls are
historically the clients responsibility, but they
are not always fully tracked and sometimes
not tracked at all. Other expenses that are
Since the beginning
of this recent Great
Recession, more and
more corporate law
departments have been
trying to shift risk onto
their rms, asking rms
to provide a simple xed
fee for a project.
typically the responsibility of the client are often
not recovered if they are incurred outside the rms
systems. Examples might include overnight charges or
online research. It is imperative to capture information
about all expenses, no matter where and how they are
incurred. Many times this phenomenon is referred to
as nancial leakage.
COST RECOVERY SYSTEMS TO THE RESCUE
The same systems that provide cost recovery also
provide law rms with insight into their expenses and
ensure productivity. Unlike a relationship where rms
bill for hours and recover for expenses, alternative
fee arrangements force rms to be more efcient,
and reward them for that efciency. Gaining a full
picture of all fees and expenses related to a matter,
including areas of nancial leakage, is more
important than ever.
For example, imagine a matter that generates
1,000 photocopies in a given month. The attorneys
administrative assistant may make most of the
copies, but say the partner himself makes 200 on
a Saturday. Uninterested in looking up a client/
matter code, the partner simply enters 9999. If the
rm doesnt have a good mechanism for managing
exceptions, it loses track of 200 copies. Then when
reviewing a pre-bill, the engagement partner
writes off another 200. The client receives the bill,
complains a bit, and receives a credit for a further
200, never even realizing that his organization was
not billed for the delivery of the documents by FedEx
or for the online research that went into creating
those documents. If the rm were tracking a billable
amount to factor in a monthly at fee for the client,
it would base its price on less than 40 percent of its
expenses. The rest has been leaked. That protable
negotiated monthly fee may not be so protable
after all.
TIME IS MONEY, AND MONEY IS MONEY
When working in xed fees with no ability to bill for
excess costs, even a small loss in protability can make
a big difference to a rm. The key to xed fee billing
is to collect good data throughout the rm and then
apply that data to sound protability analyses. Firms
account for every hour worked, even those that are
not billable, and it is similarly crucial for rms to collect
all expense data. This includes copies, faxes, prints,
phone calls and scans, as well as travel, court fees,
research, overnight delivery, courier and credit card
charges. The key is automation to ensure information
is collected as these expenses are incurred, rather
than asking attorneys and administrators to recreate it
after the fact, or worse yet, to guess.
Once all data is collected, use it to get a full idea
of your protability. Analyze by matter, by partner, by
client and more. Make sure all write-offs are accounted
for, and make sure they provide value; reducing the
bill for an already unprotable client does not serve
the rm. And make sure you factor all that into the
pricing of any xed fee arrangement, so that your
rms prots dont leak away. ILTA
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R
unning a successful business all comes
down to making the right decisions:
choosing the right business model,
selecting the right marketing message,
hiring the right people, buying the right
products, prioritizing the right projects and so on.
Each of these decisions, from the most mundane to
the most complex, has some effect on the future of
your organization. Understanding how to make good
decisions, and knowing how to inuence the right
people to make the right decisions, are, therefore,
essential business skills.
For guidance in making smart business decisions,
there are two books in particular that provide
valuable insight into the process: Smart Choices: A
Practical Guide to Making Better Life Decisions and
Inuence: The Psychology of Persuasion. Each of
these publications tackles the often gnarly processes
AYELETTE ROBINSON LITTLER MENDELSON P.C.
Successful Businesses Are
Built on Good Decisions
of making good decisions and inuencing others to
make good decisions. The synopses provided here
are the jumping off points for our reection on this
subject. They support the thesis that not only is
the substance of decisions the foundation of good
business, but solid decision-making processes are just
as crucial to success.

MAKING GOOD DECISIONS
Decisions, even simple ones, can be difcult
to make. When comparing multiple products,
services, approaches or projects, dissimilar factors,
competing forces and uncertainty can make for a
stressful decision-making process. This often leads
to mediocre decisions in which even the decision
maker has minimal condence. In Smart Choices:
A Practical Guide to Making Better Life Decisions,
authors John Hammond, Ralph Keeney, and Howard
Raiffa set out a structured process for analyzing
choices so that, more often than not, you will make
sound, condent decisions. By following their process
repeatedly, for both small and large decisions, you
will sharpen your decision-making skills so that you
make better choices more easily.
The authors formulated the following PrOACT
approach for making decisions: identify the right
problem, clarify your objectives, imagine the
alternatives, recognize the consequences and evaluate
the trade-offs.
Identify the Right Problem
Choosing the right starting point for your decision-
making is just as crucial as choosing the right solution
to your problem. Is the question, which data storage
vendor should I choose? Or is it, should we buy more
storage or reduce the amount of data we store? Even
if you know the cheapest, most reliable, easiest-
to-manage data storage product, it may be
that the better decision for your organization
is not to increase storage capacity, but to slow
the process of data growth by deleting existing
data and producing less new data both
of which would lead to completely different
future actions and projects than buying a new
product.
Clarify Your Objectives
Write your objectives down, say them out loud
and share them with others. Understand your
objectives fully before analyzing any decision.
For example, if a rm is considering the question
of whether to open a new ofce in Chicago,
there can be two equally correct answers: yes
and no. If a law rms objective is to increase the
number of its clients, then expanding into new
territories could be just right. If, instead, the law
rms objective is to get a broader range of work
from fewer clients, then it may want to focus
its resources on client service and marketing
initiatives with larger, existing clients, rather than
on opening new ofces.
Imagine the Alternatives
Alternatives represent your options for
reaching your objectives. To create your list
of alternatives, brainstorm on your own, and
consult others for their suggestions. Based
on individual experience, each person will
undoubtedly have new alternatives or different
nuances to offer. You do not need to identify
every possible alternative; but, in order to
support a solid decision-making process, you
should have enough alternatives on your list to
represent the realistic spectrum of your options.
Recognize the Consequences
Map out the consequences for each alternative as
precisely and accurately as possible. This stage often
requires some research, but being as specic as
possible at this point will both ease and strengthen
your decision. Record easily measurable costs
(software, hardware, consultant services, resource time
to upgrade, resource time to address user problems,
number and length of delays in client service), as well
as more difcult to measure, but equally important,
factors (reputation of the rm, attractiveness to new
hires, morale of employees). Seeing the data in front
of you can be invaluable. In fact, often just by listing
the alternatives and their respective consequences,
the right decision can quickly become clear. If this
happens, congratulations; your decision can be made,
and you can move forward with condence.
Evaluate the Trade-Offs
In some cases, you will be faced with the daunting
task of pitting equally important values and
objectives against each other: budget needs vs. risk
management; stability vs. scalablity; business acumen
vs. legal skill. The authors of Smart Choices lay out a
creative process for handling this scenario.
First, eliminate dominated alternatives. If option
A is better than option B in meeting some objectives,
and no worse than option B in meeting all other
objectives, then A dominates B, and you can cross B
off your list of alternatives.
For options that remain on your list, use the even
swap method to eliminate the poorer choices. The
concept of this method is based on the elementary
pros vs. cons list, comparing the pros and cons of
option A to the pros and cons of option B.
The even swap method, while it can get more
complicated in practice, does, at its core, offer a
structured and helpful approach to weighing decision
alternatives. First, create a chart with your options
along one axis and your objectives along the other.
Then, score each option based on how well it meets
each objective. Finally, cross off your list any objectives
that receive the same score for all options (no analysis
is necessary here since choosing any option will allow
you to meet that particular objective equally well).
For the remainder of the objectives, modify the
scores as described below to reduce the comparison
to one or two objectives. For example:
Option A s software cost score is a 5 (very good),
and resource time score is a 1 (poor); Option Bs
software cost score is a 3 (average), and resource
time score is a 3 (average).
Which option is better Option A with a very
high score for cost but a very low score for resource
time, or Option B with average scores for both?
Option A Option B
Software Cost 5 3
Resource Time 1 3
To make the evaluation easier, you need to reduce
the objectives to one criterion, lets say software
cost. In order to eliminate resource time from
the analysis, you must make the scores for that
objective be the same across all options. Pick one
option, Option B, and to reduce its resource time
score to 1, determine how much resource time you
SUCCESSFUL BUSINESSES ARE BUILT ON GOOD DECISIONS
would be willing to trade to meet the software
cost objective more easily.
If you would be willing to spend a lot of resource
time (the two points needed to modify the score to
1) in order to have even just a slightly better software
cost (one points worth), then for Option B, decrease
the resource time score to 1, and simultaneously
increase the software cost score to 4. Now you have
the following chart:
Option A Option B
Software Cost 5 4
Resource Time 1 1
Now, since Options A and B have the same score
for resource time, you can cross that objective off
the list. Compare the two alternatives on software
cost only, and you have a clear winner Option A
with the higher score of 5.
Option A Option B
Software Cost 5 4
Resource Time 1 1
UNCERTAINTIES, RISK TOLERANCE AND
LINKED DECISIONS
After analyzing your decision using the PrOACT
approach, there are still three additional elements
that can be highly relevant to a decision-making
process: future uncertainties, your risk tolerance and
linked decisions.
When uncertain future events will determine
whether a decision you make today is right or wrong,
the key is to dissociate consequences from decisions.
Since it is impossible to know the future, making
a good decision is about choosing intelligently
with the information you know at that time.
Future events that transpire cannot undo the
soundness of a choice made without knowledge
of those future events. Nevertheless, you often
need to take the possibility of future events
into account when making a decision. To do
that, create a risk prole for each alternative,
identifying: (1) the key uncertainties, (2) the
possible outcomes of those uncertainties, (3) the
chances of occurrence of each outcome and (4)
the consequences of each outcome.
Whenever uncertainties exist possible
consequences that are either unknown or simply
out of your control you need to determine
your or your organizations tolerance for risk
before proceeding. After evaluating the level of
risk you are willing to accept, you can apply that
to the risk proles of the alternatives to help you
decide which alternatives are viable.
Finally, whenever you are making a decision,
you must identify any related, or linked,
decisions that will be triggered or altered by
your choice in the rst decision. Recognize
how your choice in Decision 1 will modify the
alternatives available to you in Decision 2. And,
after you make Decision 1 and it comes time
to make Decision 2, be sure to reevaluate the
Decision 2 alternatives and their risk proles in
light of your new information (the now known
outcome of Decision 1).
MAKING SMART CHOICES
Decision making is like any other skill it can be
learned. Smart Choices offers an insightful and
methodical approach to strengthening your decision-
making processes. The authors posit, convincingly,
that by practicing their approach, you will begin to
make better, and more condent, decisions.
HELPING OTHERS MAKE GOOD
DECISIONS
Making good decisions is half the story. To achieve
business success, each of us relies on others, both
inside and outside
our business, to help
bring the goals of our
decisions to fruition.
Even after we make
a good decision, we
need to convince others
(internal colleagues,
as well as external
partners, vendors and
consultants) that acting
on that decision makes
sense. Inuence:
The Psychology of
Persuasion offers
insight into the human psyche and sheds light on
how certain types of words and actions affect our
decision-making processes.
TOOLS OF INFLUENCE
All animals, including humans, behave using xed-
action patterns. These are patterns of an almost
identical series of actions that are played out by all
of us when encountering the same situation. The
situations where xed-action patterns come into play
range from courtship and parenting to self-survival.
Because they are identical tapes that get played
over and over, rather than waste time reanalyzing the
same types of situations repeatedly and pondering
how to react, we abbreviate the triggers needed
to play one of those tapes so that just one signal
equates to the whole situation. Based on that signal
alone, we immediately launch into the appropriate
xed-action pattern.
For example, think about how you purchase
electronics. If you were to see just the price tags
of two laptops, without
the list of specs and
features, you would
assume that the more
expensive laptop is a
better laptop. You might
set out to disprove that
theory by examining the
features (in the hope
of getting the better
laptop at the cheaper
price), but your mental
starting point is that
higher cost equals better
quality. In other words,
your mind abbreviates a complex and time-intensive
analytical process into a single, easy trigger: price.
Furthermore, if you needed to make a purchase
decision without additional research, you would
feel pretty confident that, whichever laptop you
chose, the quality paralleled the price. If, before
purchasing, you had the time and inclination, you
might conduct research, but, for better or worse,
your mind has already made assumptions based
solely on the price trigger.
Author Robert B. Cialdini presents six tools of
inuence: reciprocation, commitment and consistency,
Making good
decisions is half the
story. To achieve
business success, each
of us relies on others,
both inside and outside
our business, to help
bring the goals of our
decisions to fruition.
SUCCESSFUL BUSINESSES ARE BUILT ON GOOD DECISIONS
social proof, liking, authority, and scarcity. Each is a
trigger for a xed-action pattern of compliance with
the person who leveraged the tool.
RECIPROCATION
The concept of exchanging favors is a basic one.
In business, however, it is important to recognize
the power of reaching an arrangement through
reciprocation. The benet of this particular tool lies
not only in getting something you want, but also in
its effect on the person who accepted the exchange.
That person now feels responsible for the nal
arrangement, and therefore feels much more satised
with it. These feelings of responsibility and satisfaction
generate a sense of commitment to carrying the
arrangement through to its conclusion.
Also noteworthy is evidence suggesting that even
when the favor requested is substantially greater than
the favor given, the mental reciprocation tape will
still play. Think about the effect on negotiating and
concessions: if you concede even a small item, the
other partys innate desire to return the favor (and
no longer owe you) is so deep that he or she can be
persuaded to concede more than you did.
COMMITMENT AND CONSISTENCY
Our culture values consistency. Those who change
their minds are considered at best indecisive,
and, at worst, untrustworthy holders of a double
standard. Put peoples own words in front of them,
and rather than admit they have changed their
minds or made mistakes, they will, more often
than not, defend them for the sake of appearing
consistent. Gaining commitment from another,
therefore, can be as simple as tying a current
decision to a past decision or action of that party.
If that past event was public, commitment will
likely be swift since both self-image and public
image are at play.
SOCIAL PROOF
If your organization is like most, its decision
makers like to see what everyone else is doing
before making a decision. Showing that others
have made the same decision lends invaluable
credibility to your decision analysis.
There are two important points to note,
however, when leveraging social proof:
The greater the similarity between the other
decision makers and your organization (e.g.,
both mid-size law rms), the greater the
power of the social proof.
Social proof is most powerful in situations
of uncertainty, when your organization
does not know which option to choose. If it
does have reasons for selecting a particular
option, it is more likely to stick with its
choice (remember consistency?) than to
change its mind simply because others made
a different decision.
LIKING
Almost nothing triggers the mental persuasion
tape better than liking. Think of celebrities selling
products our minds automatically assign the
qualities we see in one person or object to linked
people and objects. This concept on its own feels
familiar, but Inuence goes on to dene the
factors affecting our likes and dislikes:
Appearance:
An attractive, tailored presentation invites others to
listen and agree with you.
Similarity:
We like people similar to us. Mentioning similar
home towns, alma maters, professional associations
and hobbies opens the door for collaboration.
Compliments:
Evidence indicates that even if we know a compliment is
articial, we cannot help but like the party who gave it.
Contact and Cooperation:
The more contact we have with a party, the more we
like them; but to trigger liking, it is essential for the
contact to be in a collaborative setting (Marketing
and Finance working toward a common goal) rather
than in a competitive one (Marketing and Finance
competing for budget dollars).
Association:
When attempting to inuence someones decision,
linking yourself (think: unknown new car) to someone
the other party trusts (think: celebrity) will affect how
the other person perceives you and will add credibility
to your story.
AUTHORITY
We are built to respect hierarchy and listen to authority.
If you are not among the top ranks of your organization,
nd someone who is to champion your cause.
SCARCITY
When an item or option is scarce, we assume it is
in great demand and therefore (remember social
proof?) a valuable item and a good choice. This
tool of inuence may be less applicable for internal
organizational decision making, but is worth keeping
in mind for when you are on the other side of the
inuencing process. If a party shares that an option
is available for a limited time, for instance, be aware
the party is leveraging the scarcity tool to trigger your
mental-scarcity tape. The option may in fact be an
excellent one, but be sure to separate the analysis
of the options value from the tendency to perceive
scarce items as more valuable.
INFLUENCING OTHERS TO MAKE
SMART CHOICES
To bring a good decision to light, we often need to
convince others of its merit. Without a doubt, the data
supporting the decision is crucial for that process,
but the method we use to present that data is equally
vital to the outcome. Inuence: The Psychology of
Persuasion provides productive insight into shaping
that method.
CONCLUSION
Good decisions and good decision-making processes
lie at the heart of every successful business.
Standardize a strong analytical approach to making
choices and inuencing others choices, and you will
help your organization thrive. ILTA
ARTICLE TITLE
strategic
unity
CLICK HERE FOR THE
TOP 10
REASONS
WHY YOU SHOULD
ATTEND
ILTA 2010
AUGUST 23-27
Gaylord Opryland Resort & Convention Center
Nashville, TN
T
he practice of law is collaborative. Often
attorneys engage peers within their
own practice groups (PGs), other PGs
or even outside counsel who are usually
located in different geographical areas.
They work together to reach their goals and objectives
while enhancing business processes and reducing
travel costs, both internally and for clients. And clients
are demanding that their needs be met in the most
cost-effective manner possible. Webinar technologies
can be very powerful and can greatly improve your
rms collaboration efforts, not only the traditional
uses in the areas of marketing and education, but also
to enhance practice and business operations.
CLE DELIVERED VIA WEBINARS
Ongoing education is a cornerstone of law rm life.
Attorneys are required to obtain continuing legal
education (CLE) credits not only to maintain their
licenses to practice, but also to stay on top of their
games. Webinars can deliver the required CLE in
a convenient package. Nexsen Pruet, LLC (NP) has
started to use its webinar platform to deliver these
educational programs to members of the Nexsen
Pruet Law Firm Alliance, an informal network of
attorneys in the Carolinas. While many of the
attendees are usually able to be in one of
the rms ofces, there are instances when
attorneys cannot make it to the event, yet they still
want to participate to obtain their credits. Through
Adobe Connect Pro, remote attendees can view
the session, which includes video from the speaker,
and participate by asking questions in a variety of
ways that includes Q&A Chats and voice-enabled
interaction. This type of interaction is a requirement
from the alliance and the bar association for both
the delivery of content and the certication of
attendance in order to receive CLE credit.
MENTORING VIA WEBINARS
Mentoring is also part of our attorneys lives. Senior
attorneys are often responsible for training their
juniors. When practice groups are geographically
dispersed, training and mentoring can be ineffective
over the telephone or inconvenient and costly when
having to travel to different ofces. Mike Mann,
Intellectual Property Practice Group Leader at NP,
explains how using a webinar tool can resolve this
issue. I am able to show online how an attorney can
le trademark applications by using Meeting Place
Express (MPX) so that we are looking at the same
thing, and the other attorney can see what I am
referring to. This feature is easily underestimated.
He continues by explaining how collaboration is
enhanced while working on documents. I could
simply e-mail a document to another attorney so that
CARLOS RODRIGUEZ NEXSEN PRUET, LLC
Online Collaboration Enhances
Business Operations at Nexsen Pruet
we are looking at it when talking on the phone, but
he or she may not be looking in the same place I
am. Using our webinar tool, I just use the arrow to
indicate where I want him or her to focus.
TRAINING VIA WEBINARS
In the same way, the training department is taking
full advantage of the use of webinars to enhance
the delivery of content and training to the rm. Jill
Letts, Training Manager at NP, uses this technology
to conduct short training sessions. Meeting Place
Express is used for mini-webinars for our internal
users, allowing them to connect from their desktops
or laptops and listen via their phones. We have
had up to six ofce locations view quick training
sessions for software skills reinforcement. Sessions
last from 15 to 30 minutes, and no one has to
travel anywhere, not even to a conference room.
Furthermore, enhancements to the system will soon
allow us to record sessions so that they would be
accessible at any time.
This type of collaboration can also increase
the overall productivity and efciency of attorneys.
How many drafts among attorneys, staff and clients
are e-mailed back and forth in order to produce
a document? Attorneys in the rm use MPX to
expedite this process while achieving even better
results. Michael Mann says, This tool is also helpful
in collaborating with my clients. I can meet them
online with a draft patent application, and cover
it with them. If something needs to be corrected,
either one of us can do it while the other person can
see exactly how the corrections are being made.
This greatly speeds up the process of getting a
draft patent application to the point where it is
ready for ling.
CLIENT SERVICE ENHANCED
VIA WEBINARS
Nexsen Pruet strives to provide clients with
the services they need, and weve been able
to leverage the use of webinar technologies
to provide them with sessions that include
reviewing new laws, regulations or simply
education on specic topics. There have even
been occasions when attorneys have had a
need to conduct mediation, but all the involved
parties could not be in the same location, or
they simply did not want to travel. In those
cases, collaboration via a webinar saves time
and travel costs for all parties. In the same
way, when our marketing department or our
PG leaders see a topic or trend that could
potentially bring new business to the rm, they
use webinars as a communication strategy to
reach targeted audiences.
In this tough economy, law rms and clients
are pursuing different ways to collaborate and
achieve common goals. In addition to your
collaboration tools, such as SharePoint portals
or Web 2.0 media, webinar technologies can
signicantly enhance business operations
and client satisfaction, while providing a cost
effective platform that allows attorneys and
their business partners to work together toward
achieving effective results. ILTA
YURI FRAYMAN is President and CEO of The Frayman
Group. He has over 20 years of experience in providing
mission-critical solutions to the global legal market. Yuri
previously founded LegalKEY Technologies Inc. He can
be reached at yfrayman@fraymangroup.com.
JOHN GILBERT is Vice President of Sales & Marketing
at nQueue Billback, a provider of information
accountability, expense management and cost recovery
solutions worldwide. John has more than 20 years
experience in supporting law rms. He was formerly
Vice President at PerfectAccess Speer, where he
helped pioneer the methodology used to customize
Microsoft Word for the legal environment including the
awareness and removal of metadata in documents. He
can be reached at jgilbert@nqbillback.com.
STEVEN B. LEVY is the author of the groundbreaking
book Legal Project Management: Control Costs, Meet
Schedules, Manage Risks, and Maintain Sanity. For many
years, he headed the legal technology department at
Microsoft. He currently leads Lexician, where he offers
legal project management training, coaching and
consulting to rms and in-house departments. He has
been managing projects for almost four decades. He can
be reached at steven.levy@lexician.com.
LIZA MADDEN is the Director of Marketing for
Autonomy iManage, responsible for providing
strategic marketing programs for Autonomys
Information Governance suite of products, covering
document management, e-mail management, records
management, knowledge management, enterprise
search and e-discovery. Liza has over twenty years of
experience serving the content management needs of
AmLaw 200 law rms and Fortune 500 legal departments
as a consultant and an account executive. She can be
reached at elizabeth.madden@autonomy.com.
AYELETTE ROBINSON, ESQ. is Knowledge
Management Counsel, Manager of KM Technology
at Littler Mendelson, P.C. She is responsible for
the development and implementation of the rms
technology-based knowledge management resources,
including the rms portal and enterprise search.
Ayelette works closely with cross-functional teams,
designing efcient knowledge management solutions
and overseeing the analysis and maintenance of
rmwide practice resources. She can be reached at
ayrobinson@littler.com.
CARLOS RODRIGUEZ is the Network Manager for
Nexsen Pruet, LLC in Columbia, South Carolina,
where he is responsible for designing, implementing
and maintaining day-to-day operations of the rms
network and security infrastructure. In more than
10 years of successful technology engineering and
leadership, he has focused his efforts on leveraging
IP networks in order to enhance internal processes,
telecommunications and network security, while
delivering tools that increase productivity and enhance
the impact of technology on business processes. He
can be reached at crodriguez@nexsenpruet.com.
MIKE SAFAR is Senior Product Manager for
Governance Solutions with Autonomy where
he is responsible for products such as iManage
RecordsManager, Autonomy Legal Hold, iManage
Digital Safe, iManage ConictsManager, and other
governance initiatives such as HIPPA/HITECH
ABOUT THE AUTHORS
compliance and records standards certication.
Mike has over 20 years of experience leading the
development and strategy for legal document and
records management solutions. Before joining
Autonomy, Mike led product development and
product management at PC DOCS. He can be reached
at mike.safar@autonomy.com.
GANESH VEDNERE is a manager with a global
nancial service consulting company based out of New
York. He has expertise in implementing information
and compliance programs including e-discovery,
compliance research, records management, legal
research and program implementation. He has 15
years of relevant industry experience in various
business and technology verticals. He can be reached
at gvedn@comcast.net.
LANN WASSON is the Senior Manager of Knowledge
Management at Husch Blackwell Sanders LLP located
in Kansas City, Missouri and a certied Project
Management Professional (PMP). For the last ten
years, he has worked with technology systems to
support business and practice development and
knowledge management at the rm. Lann can be
reached at lann.wasson@huschblackwell.com.
ABOUT ILTA
Providing technology solutions to law rms and legal
departments gets more complex every day. Connecting with
your peers to exchange ideas with those who have been
there done that has never been more valuable. For over three
decades, the International Legal Technology Association has
led the way in sharing knowledge and experience for those
faced with challenges in their rms and legal departments. ILTA
members come from rms of all sizes and all areas of practice,
all sharing a common need to have access to the latest
information about products and support services that impact
the legal profession.
STATEMENT OF PURPOSE
ILTA is the premier peer networking organization, providing
information to members to maximize the value of technology in
support of the legal profession.
DISCLAIMER
This report is designed for use as a general guide and is not
intended to serve as a recommendation or to replace the
advice of experienced professionals. If expert assistance is
desired, the services of a competent professional should be
sought. Neither ILTA nor any author or contributor shall have
liability for any persons reliance on the content of or any errors
or omissions in this publication.
COPYRIGHT NOTICE
Copyright ILTA 2010. All rights reserved. Printed in the United
States of America. No part of this report may be reproduced
in any manner or medium whatsoever without the prior written
permission of ILTA. Published by ILTA. c/o Editor, 9701 Brodie
Lane, Suite 200, Austin, Texas 78748.

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