InnovAction Award Winners In the News

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The following article appeared in the October 2012 issue of Of Counsel.

InnovAction Awards Honor Creative Efficiency Gains by Littler Mendelson and Seyfarth Shaw

By Steven T. Taylor

The pressure began mounting even before the economic implosion. It had been brewing above the legal profession like a swirling storm in the upper atmosphere and when the recession hit so too did the lightning and thunder from clients: “We need to cut legal spending so we need you to be more efficient,” they said. Some law firms took action and created new ways of doing business and some law firms are no longer doing any business; the list of dissolved partnerships continues to grow.

From within the offices of the San Francisco-based labor and employment firm of Littler Mendelson, attorneys and staff were among those partnerships that accepted the challenge and changed the way they worked.

“We wanted to demonstrate to our clients that we get it,” says Scott Rechtschaffen, Littler’s chief knowledge officer. “The new normal is real. We realized we could not continue to deliver legal services the way we’ve done it for the last 50 years. We knew we had to innovate—and we did.”

Indeed they did, creating Littler CaseSmart solution, a three-pronged system that saved clients money and made the firm more profitable. For their efforts, the attorneys and staff have been named one of two winners of the College of Law Practice Management 2012 InnovAction Awards.

The other winner of the prestigious honor bestowed annually for creative thinking and innovation in the legal profession is Seyfarth Shaw. This Chicago-based partnership has developed a new thought model, if you will, by adopting and modifying elements of the well-known business system Lean Six Sigma to create its inventive SeyfarthLean model.

Back in 2009, Of Counsel talked to Merrilyn Astin Tarlton, one of the InnovAction award judges both that year and in 2012 as well as principal of the consultancy Astin Tarlton and co-publisher of the daily blog “Attorney at Work.” She told us that more firms are beginning to innovate because, well, they have to. “The economy is having an impact on innovation in law firms in general because, as we all know, people usually don’t change until it hurts too much not to change,” she said back then, “and the economy is providing the motivation to do something different.”

In this regard, there’s not much difference between then and now.

Getting 100 Percent of Workload

A couple of years ago one of Littler’s major clients, a giant retailer, asked the firm and the others it retained to find a way to cut the company’s legal spending by 20 percent or more. Littler had been handling about a quarter of the retailer’s administrative agency workplace charges filed at the Equal Employment Opportunity Commission and at state and local agencies. The firm wanted more of that work. “Our relationship partner with that client said, ‘We’ll cut your spend but we want 100 percent of your charges,’” Rechtschaffen recalls, adding that the firm had already been looking at ways to increase efficiencies.

Rechtschaffen and many of the attorneys and staff members got to work. “We took the workflow analysis we’d conducted,” he says, “and asked, ‘What are shareholders doing that associates should be doing and what associates are doing that a dedicated administrative staff should be doing?’ We squeezed all of the inefficiencies we could out of the process.” Then they built a case management system so that when a charge comes to the firm from a client staff gathers all of the necessary documents and inputs them into the system. Consequently, when the working attorneys are ready to conduct an investigation and start doing a risk assessment on the case, it’s all there in front of them on the screen, completely paperless.

That’s one part of the innovative model. Another is Littler’s creation of a dedicated team of flex-time attorneys who work at home and do nothing but these types of charges for a particular client. “They get really good at the law surrounding the charges but they also get to know the client really well,” Rechtschaffen says.

These attorneys, most of them former Littler associates who wanted a lifestyle change, are supervised by partners who in turn are managed by another partner who directs the entire project. “We were able to make everybody more efficient with technology and dedicated staffing,” Rechtschaffen says.

The third key feature of CaseSmart is a “dashboard” of key performance indicators and reports that the clients have access to any time they want. They can also look at all of their charges and make some assessments and, perhaps, changes to their way of dealing with human resource issues. Rechtschaffen explains: “They can filter them in a way so they can ask, ‘Where do I have the most charges? Why am I having so many charges in New York? Why am I having so many disability discrimination charges? Do we have to do more training?’ We’re giving them actionable intelligence that allows them to look at what’s going on from a legal perspective in their organization that they’ve never had before.”

Oh and yes, Littler got and continues to maintain 100 percent of the client’s charges, has cut legal spending by more than 20 percent, increased the firm’s revenues and profits, and is now expanding CaseSmart to perform other types of legal work. Nicely done.

Modifying Sigma Six

At Seyfarth Shaw, long before the recession, in 2005, the firm wanted to increase the use of alternative fee arrangements, no doubt to satisfy the demands of some clients but also because the firm wanted to increase efficiency. “So we needed to figure out how to do the work more efficiently,” says Lisa Damon, partner and member of Seyfarth’s executive committee. “In other words, we said to our attorneys, ‘Don’t price the way you currently do but stand back, analyze the work and make it more efficient and then price that work.’”

The executive committee commissioned a task force to find an analytical model that allowed attorneys to rethink the way they work as a law firm. After testing several different models, the firm decided to combine the “core principles of Lean Six Sigma with robust technology, knowledge management, process management techniques, alternative fee structures, and practical tools,” according to the press release announcing the InnovAction Award winners.

The new thought model, SeyfarthLean, is being used in many different areas of the firm. In real estate, for example, Seyfarth had a client for which the leasing of real estate is core to their business and the cycle time—the amount of time it takes to get a lease done—is critical. That is, every day that the lease remains outstanding the client loses profits. “So they asked us to analyze the way they were working with their law firms and with us in doing these lease transactions,” Damon says. “We met with them, brought their experts and ours together, did a process map of how we had been working together to do the lease transactions, and then began to work with them, and internally, to become more efficient. The goal was to reduce the cycle time.”

By using SeyfarthLean, the firm not only dramatically reduced the cycle time to the client “but we also lowered the cost and obviously continued to deliver signed leases, which to the client is the best outcome,” Damon says.

And that’s one of many positive outcomes that innovation can deliver. We congratulate both Littler Mendelson and Seyfarth Shaw for their creative achievements.

Reprinted from Of Counsel, Vol. 31, No. 10, October 2012, © copyright Aspen Publishers.

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