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  Workflows Decide Workloads

Author: Richard Stock - Lexpert (May 2007 at p. 107)

In the 15 years that I have spent working with legal departments, and the 35 years spent working with lawyers, I have come to appreciate the similarities between the kind of work conducted by archaeologists and the work of management consultants.

Every few years, archaeologists unearth earlier evidence of man, and yet it becomes harder than ever to trace lineage across the millennia. Searching for the root causes of, and solutions to, challenges facing legal departments requires that I locate the pieces, make the connections and offer persuasive solutions before time and money run out. Clients are rightfully impatient. They will pay for 10-per-cent diagnosis and 90-per-cent implementation advice, but not the reverse.

For the past few years, I have had a part of my practice focused on getting legal departments to manage their workflows better. The more progressive legal departments have pretty explicit protocols in place about when business units should call their legal departments. But few have formal standards dealing with turnaround. Fewer still prepare detailed project/revenue plans for complex work — they just throw resources at a file, especially if it is a matter of strategic importance.

Most departments do not conduct annual satisfaction surveys with their business units, so it is not realistic to set key performance indicators (KPIs) around service levels. And, finally, many members of the legal department work 50 or more hours per week and get really stressed about perceived backlogs. Others become de-motivated after a number of years because the proportion of challenging work is insufficient.

While there is no single cause or magic bullet solution for each of these symptoms, I think it is possible and realistic to significantly improve the effectiveness of a legal department by focusing on its workflow protocols and practices. There are collateral benefits for workload management, user satisfaction levels, resource requirements and KPIs. But there is a prerequisite step to this sequence, and that is preparing and maintaining a reliable and detailed forecast of the company’s demand for legal services.

A demand forecast will usually span three years. It will be updated annually, and it will be detailed, going far beyond budgets and head count. The forecast should describe the primary categories or specialization of legal work, the levels of complexity for each category, the number of hours for each level, and all of this for each jurisdiction from which the services are to be delivered by in-house and external counsel. It helps to accompany each category with planning assumptions and the percentage probability for each assumption. This constellation of multi-dimensional planning assumptions constitutes the baseline for which all the rest follows.

A minority of legal departments have successfully introduced programs to reduce the demand for legal services — some by 15 to 20 per cent per year. Technology, training of the business units and a new balance of legal-business risk go part of the way to reducing demand for commercial and advisory services. Fast-track litigation, alternative fee arrangements, legal project management and technology combine to contain, if not curtail, the cost of litigation. Each of these initiatives will affect workflow. From there, the effect on workloads, resource requirements and costs can be tracked. A reliable demand forecast underpins each of these initiatives.

Lawyer practice patterns are idiosyncratic. Historically, relationship-based legal services are client-oriented. Practice in legal departments is not as team-based as what one finds in law firms. It is intrinsically inefficient, prone to constant interruptions and too often poorly supported by technology and human resources. Corporate counsel do not measure the type and quantity of backlog in their work. A combination of initiatives encompassing tighter intake protocols, better resources and standards for handling routine and complex work will eliminate chronic backlogs and relieve the demand for resources by about 20 per cent on a sustainable basis. That leaves more time to get involved in significant, strategic projects — and, possibly, to in-source key matters from law firms. As a minimum, it is a waste-management initiative that cannot be dismissed.

What gets measured gets done. It is straightforward to quantify the demand for and the cost of legal services. Expectations need to be managed. The resources must be invested. Managing workflows at the user and lawyer level directly affects workloads. The correlation between workloads and cost-effectiveness is then easier to demonstrate.

Well planned and well executed, the picture comes into focus: demand forecasting leads to workflow management, leads to effective workloads, leads to cost-effectiveness.

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