What is Six Sigma?
Six Sigma is a set of techniques and tools for process improvement. It was developed by Motorola in 1986, and while initially the concepts were applied in a manufacturing setting it has been adapted and used in many industries over time. It became better known in the 90s when Jack Welch adopted the discipline as the central business strategy for General Electric.
Six Sigma improves the quality of outputs from a process by identifying and removing the causes of defects (errors) and minimizing variability. It uses quality management and statistical methods to measure and manage the results. There are different types of certification one can earn in Six Sigma, including Black, Green, and Yellow Belts, each with different levels of expertise in the Six Sigma methods.1
Isn't That Really Project Management?
People sometimes think Six Sigma is a project management methodology, but project management activities include initiation, planning, executing, controlling, and closing a matter. It means knowing what needs to be done, when it needs to be done, and by whom. Process improvement, whether via Six Sigma or other techniques, is about delivering value in a more efficient way and focuses on the "voice of the client."2
Why Should Law Firms Care?
With the increasing demand for predictability in pricing, transparency in the processes, and sharing the risks via fixed-fee or other alternate billing arrangements (other than hourly), any methods that can help firms achieve these goals should be of interest. Six Sigma goals include:
- reducing the length of time to complete a process
- reducing costs
- increasing customer satisfaction
- increasing profits
Sounds great, but due to the mammoth complexity, time and initial costs in adopting such programs, many law firms just don't seem to have the gumption to endure such a rigorous endeavor. This is where Lean Six Sigma (LSS) comes in to play.
What is Lean Six Sigma?
The "Lean" approach combines techniques from both Six Sigma and "Lean Processing," another managerial method for improving the speed of business processes. Six Sigma takes a data-driven approach, whereas Lean is focus-driven. Lean Six Sigma takes a bit from both and is well suited for the professional services industry. It also uses a belt based training system, but adds white belts (most basic) and master black belts (most advanced) to the yellow and green designations used in Six Sigma.3
Focusing on Waste
LSS focuses on improving quality and efficiency via the elimination of eight kinds of waste: defects, overproduction, waiting, nonutilized talent, transportation, inventory, motion, and extra-processing (aka "downtime").4 Examples of some of these as applied to a legal context are:
The LSS Methodology
LSS uses DMAIC as its framework for eliminating waste when analyzing a process. DMAIC stands for:
- Define—What does the client want? What is the problem?
- Measure—How will we work with the client to get from A to Z?
- Analyze—How can we improve the current workflow process? Are there areas where efficiency gains can be made?
- Improve—Create a new process map; implement a new plan; find ways to keep people "on the map."
- Control—Develop a control plan.6
How to Get Started
Patricia Olah and Andrew Terrett of Bordner Ladner Gervais suggested asking some key questions. Think of these questions as they pertain to each type of matter your firm handles, starting with those that you are targeting for improvement, whatever the reasons may be.
- What steps and activities are typically included in this process?
- Which steps and activities does the client value most highly? And which do NOT add value and could be eliminated?
- Can we standardize the process? Can we streamline the process?
- Can we reduce or eliminate repetition? Can we remove bottlenecks?
- How can we improve communication within the team and/or with clients?
- Can we reduce cost by delegating some tasks to junior staff who bill at lower rates? Can we "delegate up" to senior staff who can accomplish a task more quickly at a total lower cost?
Also consider your clients' point of view. How would they respond if you asked them: "Does the work take too long? Does it cost too much? Do you think we are communicating adequately?"7 These questions will help you focus on the processes that would benefit the most from applying a LSS discipline to them. The next step is to map out those processes.
Using Process Maps
A process map (think flow chart) is a common tool to lay out an existing process so it can be better understood, and ultimately improved. Creating a process map is at least a two-step process. In the first pass, the map would describe a process as you think it is. In reality, what you think it is and what it really is are likely to diverge. The process mapping exercise will likely expose these details, and offer opportunities for streamlining.
The second version of the process map will describe how that matter (type) should be run. Using the before and after versions of a process map, especially if you include time estimates for each task, will help you articulate to your client the improvements being made, as well as justify the ROI in the effort. A full-blown LSS endeavor can be a large commitment financially. For instance, one firm well-known for its LSS approach has reportedly spent $3 million to date administering and training workers on the philosophy, and budgets $200,000-$500,000 annually for these costs.8 These costs are recouped in theory by resulting in happier clients leading to more work being awarded, more profitable AFAs, and so forth. Willingness to make such an investment of course presumes your firm really does believe that offering properly priced work is ideal!
Lean's mantra of "doing things better" means firms need to view it from a cultural standpoint. It has to be more than an arbitrary process, and actually be engrained in the firm's culture for it to work. It requires buy-in from both senior management and employees.9 One example of a firm with such a culture was the former Hale & Dorr (now Wilmer Hale). Former employee and consultant Sylvia Coulter explained:
"When I was at Hale & Dorr, our managing partner Bill (William) Lee was very interested in quality management. His father helped found the Center for Quality Management (CQM) in the late 80s, so it is no surprise. To foster a culture of excellence, the firm sent a cross-functional team of managers to the Ritz for leadership training. The team included partners as well as leaders from IT, Practice Management, Marketing, etc. ...
"From there we brainstormed a number of processes impacting clients that could be improved. Initially we chose three processes to focus on in different areas, so we minimized the disruption that the process redesign would initially impose. For instance, one project focused on improving the billing process, while another was revamping the reception process (how we met and greeted our clients, what they experienced while waiting for their appointment to begin). This was just the beginning, but because we had the correct leadership buy-in, it changed the firm's culture to one continually focused on excellence. Orientation, for instance, included a video that all employees were required to watch that reviewed the firm's management principles including the focus on providing excellent client service and treating all employees with respect, that were a direct result of corporate leadership training through the Ritz-Carton's Leadership Center."
With its emphasis on measuring value rather than time, Lean Six Sigma is one way to deliver more to clients for less. It aligns client and lawyer interests. Firms that adopt it can expect to see:
- Better collaboration between clients and firms
- Enhanced focus on value and quality
- Improved ability to offer AFA's with confidence (pricing accuracy)
- Lower overhead/costs yet greater profit
- Faster response and turnaround times
- Increased productivity with fewer resources
- Freeing up of valuable resources that can take on other work
- Increased client satisfaction10
From a birds-eye view, Lean Six Sigma sounds reasonable but you will likely need some outside help to get started. There are a number of consultants who can help with the cultural change needed as well as the training itself. If you look at the websites of many top firms, you will find descriptions of the programs that they have in place, yet there aren't so many that you can't follow a close second to those that lead the pack. And at some point you will need to find ways to improve client satisfaction and offer better pricing regardless of methodology, or you are sure to lose business in the future.
- "Six Sigma," Wikipedia,http://en.wikipedia.org/wiki/Six_Sigma.
- Connie Crosby, "Bringing Lean Six Sigma Process Improvement Disciplines Into Legal Services: A CCCA Spring Conference Workshop,"http://www.slaw.ca/2013/04/22/bringing-lean-six-sigma-process-improvement-disciplines-into-legal-services-a-ccca-spring-conference-workshop/.
- "Lean Six Sigma," Wikipedia, http://en.wikipedia.org/wiki/Lean_Six_Sigma.
- For more examples, see "An Introduction to Lean and Legal Process Improvement, University of Ottawa, January 2014," (starting at slide 16),http://www.slideshare.net/KarenGimbal/intro-to-lean-six-sigma-for-lawyers-university-of-ottawa-january-2013.
- Supra, note 2.
- D.M. Levine, "Leap Of Faith: How much will Six Sigma pay off for Seyfarth Shaw?," The American Lawyer, April 1, 2010.
- "Process Excellence explained: What's the difference between Lean, Six Sigma, and Business Process Management (BPM)?," Process Excellence Network,http://www.processexcellencenetwork.com/lean-six-sigma-business-transformation/articles/process-excellence-explained-what-s-the-difference/.
- "Lean Six Sigma—What Is It and Why Do Lawyers Need It?"Gimbal Lean Practice Management Advisors,http://gimbalcanada.com/what-is-lean-six-sigma/; Supra, note 2.