Our Lean Law Primer: Updated to reflect how Lean can help your practice survive and thrive in the next new normal

Lean Law Background

Lean Thinking emerged in the late 90s as a methodology based on Toyota’s Production System to produce cars. It’s a philosophy that advocates customer focus, waste elimination, and continuous process improvement. Once applied to manufacturing, the legal industry has more recently been adopting Lean. Behemoths like Seyfarth Shaw have built out their own Lean Law systems and while not necessarily branding themselves as Lean, many rising star Alternative Legal Service Providers [ALSPs] as well as small, agile and innovative firms have been adopting and successfully implementing lean law processes and philosophy to gain market share from traditional midsize to large law firms since the last recession. 

Lean Law evangelist Kenneth Grady emphasizes that the focus for law firms isn’t to reduce costs, though that’s certainly a benefit. Lean requires looking at your operational processes for getting work done, and identifying 1) those things that add value to the client, and 2) those that don’t, which are eliminated as waste.

Indeed, the starting point in any process improvement is the ‘voice of the client’. For law, this means establishing what your client wants, what they value—and ensuring this is what is delivered every time. Today this often means delivering better work product—in less time, at a lower cost. 

While it may sound like a tall order amidst the already intense workload at most law firms, learning what clients want and running operations through Lean methodology increases firm profitability, strengthens client relationships and referrals all while reducing workloads and operational chaos over time.  

Lean Law Implementation

While there’s no shortage of processes to which you can apply Lean thinking in your firm, you can’t just throw a process at your firm and expect a magical transformation.

Applying Lean first requires a focus on process thinking. This is a culture shift for many existing firms and not instinctual for many lawyers trained in a traditional environment—even if they are highly enthusiastic about Lean concepts. Giving careful thought to change management, building a culture around process thinking, and motivating and incentivizing your team is more than half the battle in implementing Lean Law. 

Much innovation in law in recent decades has lean underpinning. Three major areas many firms have adopted are 1) automating and eliminating redundant processes and time sucks in practice management and client communication through the adoption of practice management softwares and 2) automating the tedious portions of the manual review and management of documents and contracts and 3 ) Contract attorneys with 70% of large law firms now using contract attorneys.  

Still, shifts such as automating tedious work that resulted in high amounts of billable hours and the use of contract attorneys that lowered the hourly rate has been a long slow process. Large traditional firms have generally adopted these measures reluctantly and only at the demand of clients once they had other options. The level of resistance will likely depend on the size and culture of your firm. Clio founder Jack Newton’s book “The Client Centered Law Firm” provides a detailed manual for firms of all sizes to enact a cultural shift, get buy in, and design and measure new processes. 

Working through the initial resistance will produce a long term return on investment for your clients and your team. Applying lean to a law firm’s talent operations will result in clearly defined expectations and processes will result in better employee onboarding, higher employee satisfaction, and lower turnover. The top reasons for losing new hires were poor onboarding and lack of clarity surrounding job duties and expectations. Further, a less chaotic and smoother work environment will benefit the mental health of all from owners and associates to staff at a law firm. And a calm, organized, efficient operation will inevitably close more new clients and inspire more confidence, loyalty, and referrals from existing clients. 

Lean Law and the last and next new normal

Even in the past few years as the economy was thriving—one of the greatest motivators of adopting lean was for survival. With new players in the market offering lean advantages these efficiencies were no longer a competitive edge, but expected. In 2018 Melissa Prince, Chief Client Value Officer at Ballard Spahr noted that “Mastering the client value function is a key to survival now, as unlimited rate hikes are no longer an option in maintaining profitability,” and that very large firms would likely perish “if they can’t figure out this model.”

While they may not have specifically waived the lean law flag, this is at the heart of what successful Alternative Legal Service Providers [ALSPs] have been doing. With focusing on automation, efficiency, and customer service  these players made great gains in the commercial legal market over the past decade, particularly upon the 2008 recession sparking dramatic changes in legal service buying behavior. And while demand for legal services has grown steadily since 2010 as the United States eased out of the Great Recession, law firm demand remained relatively flat with ALSPs picking up most of this growth. Further, within the law firm sector, small law firms saw new gains over larger law firms in their ability to be agile and responsive to clients.

Throughout recessions and depressions economic activity and the need for legal services has continued. These times generally present accelerated changes in buying behaviors—and new opportunities for those who are positioned to capture them. Now is the time to reflect upon and research how to improve your operations and client experience and plan for how your practice can not just survive, but thrive in the next new normal.