Lean Is The Path To The Perfect Legal Practice (Part 1)
Lean is a philosophy that every lawyer says they understand, yet few really do understand. In this essay, I will give the longer explanation of what Lean really means and why it is critical for lawyers to learn. But, I also recognize that lawyers like the short, pithy version before they dig in to the details. So, this is the way one lean thinker explained what lean coaches do when his seven year-old daughter asked what teaching lean meant, “Daddy tries to teach people how to work faster and make less mistakes. And, most importantly, we also try to teach people to be nice and respect each other… that way everyone can do their very best.”
I have divided this essay into three parts. In the first part, I give a brief overview of the history and five basic principles of Lean. In the second part, I will explain how Lean can help legal services providers. In the final part, I will explain how to incorporate Lean ideas into your legal services and turn your organization into a continuous improvement enterprise.
Lean Unites Many Streams of Thought
In the 1940s, a startup in the automotive industry called Toyota Motor Company began uniting many streams of thought into what became the Toyota Production System (TPS). Five major streams form the core of TPS.
First, three philosophers in the United States—Charles Sanders Pierce, followed by C.I. Lewis and John Dewey—founded the pragmatism tradition of philosophy. Pragmatists focused on practicality, claiming “that an ideology or proposition is true if it works satisfactorily, [and] that the meaning of a proposition is to be found in the practical consequences of accepting it.” Walter Shewhart, who was followed by W. Edwards Deming and Joseph Juran, created the quality movement in the manufacturing world. Shewhart built his statistical quality control ideas partly on the pragmatist tradition. Deming and Juran, who learned statistical quality control from Shewhart, introduced quality concepts to Japanese businesses after World War II.
Second, Henry Ford developed the moving assembly line. The moving assembly line revolutionized manufacturing. Instead of a team of craftsman working in one spot to put together a car, the car chassis started a journey through the factory. Periodically, a group of workmen would perform a specialized task, such as put in the engine or the wheels. The change from one-spot production to the moving assembly line, essential for something as complicated as a car, became a core competency of manufacturing that still exists today.
Third, the United States corner dry goods grocers, butchers, bakers, and fresh vegetable markets were brought under one roof by the supermarket. One stop for all your grocery needs. Supermarkets used shelving systems customers served themselves from instead of using clerks to serve customers. The customer would pull a can of corn or peas off an inclined shelf that had many more cans ready to slide into place. This system was the origin of kanban.
Fourth, Frederick W. Taylor, a young engineer working at a steel company, developed the ideas of scientific management. Using his ideas, companies standardized work, used metrics to measure the time spent on tasks, and brought discipline to the unruly factory floor.
Finally, the United States government contributed by creating the Training Within Industry (TWI) system at the beginning of World War II. As trained workers left factories to join the armed forces, the U.S. had two problems. Factories needed to scale up production to meet the demands of the military. At the same time, the ranks of skilled workers were depleted. In one case, lens grinding, it took five years to train a replacement. Using TWI, the lens grinding companies were able to bring the time to train a replacement down to six months and by the end of the war it was down to six weeks.
TWI was developed by the U.S. government and implemented by industry to address the worker problem and industry used it in offices and for services, not just on the factory floor. It performed far better than expected and was used from 1940 to 1945. According to many, TWI was key in the U.S. producing the products needed to win the war. While TWI was terminated in the U.S. when the war ended, General MacArthur, leader of the allied forces in Japan, introduced it to Japanese businesses to help them re-build. TWI was a major part of what became TPS. While TWI brought many elements to TPS, the most notable came to be known as “respect for humanity.”
At Toyota Motor Company, Taiichi Ohno was tasked with helping the company build its automotive manufacturing business under the harsh post-war conditions. Raw material, workers, and money were in limited supply. Everything had to be used wisely and wasting anything was the new enemy. Ohno, with a group of engineers working together as the Toyota Autonomous Study Group, pulled together these streams and developed many other pieces that they used to build the Toyota Production System.
In the early 1990s, John D. Krafcik, was doing research for James Womack, who was writing the book The Machine That Changed the World, which kicked off interest in TPS in the United States. Krafcik, a graduate student at MIT at the time who has since held many senior roles in the automotive industry including CEO of Hyundai Motor America Inc. and today is Alphabet’s CEO of Self-Driving Cars, coined the term “Lean” for Toyota’s system. Womack and one of his co-authors then published the primary work on Lean, Lean Thinking: Banish Waste and Create Wealth In Your Corporation (Womack and Jones, 1996). They used the term “Lean Thinking,” because they recognized that U.S. manufacturers, especially automobile manufacturers, would be reluctant to adopt a system called the “Toyota Production System.”
Today, Lean is used in industries of all types throughout the world. According to the 4th Biennial PEX Network Survey (PEX, 2015), Lean is the most widely used form of operational excellence in corporations (53.27%). Reflecting the general trend of services moving to adopt operational excellence methodologies, corporate departments, such as finance, HR, legal, and customer service, are steadily increasing their use of Lean.
Despite the overwhelming success of Lean, the legal services industry has been one of the last to adopt its philosophy and methods. Lawyers believe that Lean will force them to give up their autonomy, pride in quality, and their professionalism, all of which lawyers cherish. It is time to debunk that myth.
Not Strange Bedfellows
Lawyers look skeptical when they hear “Lean” and “law.” Their visceral response is that something born and raised in the manufacturing world has no place in the professional services world. Lawyers don’t make toasters, they solve the world’s problems. This type of work should not be measured by a stopwatch and humans should not be treated as robots, asked to perform the same task again and again without variation.
Of course, there is some merit in what lawyers say. Delivering legal services is not the mass production of goods. But Lean also is not what they have been taught or imagine and so the comparison is inapt. What lawyers fear is not what Lean brings. Ironically, what lawyers do today is much closer to the dreaded production line and Lean is key to taking lawyers to the types of practices they would like to have.
Lean sits well with anything people do, legal services included. The Lean philosophy is built on five principles that form a virtuous circle. Womack and Jones enunciated those principles in Lean Thinking:
Specify what creates value from the client’s perspective.
Identify all the steps across the entire value stream.
Create flow among those steps that create value.
Only make what is pulled by the customer just-in-time.
Strive for perfection by continually removing waste.
Principle 1: What Creates Value
Lawyers provide services to clients. They help clients solve problems. Thus, whatever the lawyer does should create value for the client. While this seems self-evident, for lawyers there are some interesting twists.
Lawyers work under a regulatory scheme that does not permit them to do whatever a client wants, even though doing so would create value for the client. A lawyer may be creating value for his client by helping the client move funds to evade paying taxes, but the lawyer is not free to help his client commit a crime. While a lawyer should create value for his client, there are limits on such value creating efforts. But, it also is hard to justify a system where a lawyer spends a lot of time on things that don’t add value for the client and then charges the client for the non-value added services.
Principle 2: Identify the Value Stream
This principle is foreign to most lawyers. They simply do what they do to finish the task set before them by the client. They do not classify the things they do into those that provide value and those that do not. Within Lean, we do that classification. We want to know which steps are the ones adding value and which ones don’t, or in Lean terms, which ones are waste. When we identify the value stream, we pull together those groups and processes that stand between the client request and the delivered solution, and include only those that add value. This gives us a story book of how to get from beginning to end with minimal waste (I’ll show you an example of a value stream map in a bit). The things that add waste are the things which make the lawyer’s job stressful, boring, and more like the assembly line than a creative opportunity to bring innovative solutions to client problems.
Principle 3: Create Flow
Flow occurs when each value step connects to the next value step without waste. While this sounds simple, it is extremely difficult to achieve. The service provided must move from client to lawyer, and within a firm or other organization from lawyer to lawyer, and then from lawyer to client, without any drag or interruption. The entire process must be free of waste. To get flow, we must change processes so that instead of each person pushing work to the next, each person pulls work. Flow is something we all want to get to, but no one has yet to achieve in its ideal form.
Principle 4: Just-in-Time
The just-in-time principle comes from the supermarket. Ideally, when you go to the shelf and remove a can, another one drops into place for the next customer (who is right behind you). In its highest form, just-in-time (JIT) means that each thing done in the value stream happens immediately before the next activity in the stream, not too early or too late. On a production line, the parts to attach the engine arrive at the work station just when the worker needs to use them. They are the parts needed for that particular chassis and engine, no others. JIT in legal services happens when each person in the value stream does just the work the client needs, when the client needs it, and no more or less.
Principle 5: Strive for Perfection
In Lean, your value stream would achieve perfection if you could remove all of the waste in it. This does not happen in real life, and so the virtuous circle of Lean continues as we cycle through the principles over and over again, always trying to move a bit closer to perfection. This is where the term “continuous improvement” comes in. Lean is not episodic improvement events, it is a drive that means every day, every employee looks at what she does and questions how she can do it better.
In the second part of this essay, I will explain how Lean can help legal services providers.
About the author: Ken Grady is Lean Law Evangelist for Seyfarth Shaw LLP, and Adjunct Professor at Michigan State University College of Law. Ken regularly writes and speaks internationally about legal practice issues. He was named to the Fastcase 50, honored by the Financial Times for innovative leadership of in-house counsel/outside counsel relationships, and is editor and author of SeytLines.com, included in the ABA Journal’s Blawg 100. Ken was CEO of SeyfarthLean Consulting, LLC, general counsel for three Fortune 1000 corporations, held executive positions at Fortune 500 and 1000 corporations, and was a partner in the law firm McDermott, Will & Emery.