As part of the New Year, we start a new discussion series on operations strategy and the law firm. As we scan through online and offline articles that deal with business strategy and the law firm, three lenses dominate the discussion:
- marketing: market positioning, promotion, and alternative billing
- human resources and leadership: mentorship, practice group design, firm leadership;
- finance: billing and especially now, alternative practice structures, including public company ownership.
Many business consultants will share with you that many of the major advancements in managerial research has been in the area of operations strategy: supply chain management, production optimization, outbound logistics, and data management. Yet, we perceive scant discussion of these topics in typical legal strategy publications.
That changes today.
Today, Precedent will start a 7-part series on operations strategy in the law firm. Over the next three months, we’ll be addressing seven common issues in operations strategy and how they apply to the law firm.
So, by way of introduction, we will be organizing our presentation along a very common topical scheme in operations strategy: the Toyota Production System. We’re using it because it’s scheme is simple, understandable, and has direct parallels in law firm operations. As a brand name, it’s approach is well-documented, accepted, and recognizable by lawyers. We thought it would make a great starting point.
There are many aspects to the Toyota Production System. We will only scratch the surface. A common starting point, though, are what is often called “the seven wastes”:
- Waste of overproduction
- Waste of time on hand (waiting)
- Waste of transportation
- Waste of processing itself
- Waste of stock at hand
- Waste of movement
- Waste of making defective products
A significant goal in the Toyota system is to minimize each of these wastes. One should not produce more than what is demanded (hence the famed “just-in-time” delivery system). Waiting means idling resources – a waste of resources. Unnecessary transportation and movement uses up valuable resources and cost. Inefficient processing is more costly than necessary. Re-work is costly both in time, money, and potentially customer goodwill. Each of these “wastes” affect each other. Minimizing one often reduces others. To minimize one will often require reducing others.
As I indicated earlier, each of these seven wastes has a law firm equivalent. Over the next few months, we’ll be exploring each in detail, how they relate to the law firm, strategies and tactics that lawyers can use to reduce each of the wastes, and the benefit to the bottom line. They are:
- Waste of overlawyering
- Waste of delay
- Waste of unnecessary delivery
- Waste of inefficient processing
- Waste of time and knowledge inventory
- Waste of silo work
- Waste of error and re-work
Let us know if you have any questions that you would like us to answer or address in future articles. Meanwhile, here is a great wikipedia article on the TPS. A great primer. Think about how it might apply to law firms: http://en.wikipedia.org/wiki/Toyota_production_system.
- Trending for Law Firms in 2012: What to Expect This Year (kowalskiandassociatesblog.com)
- Basic Economics of Law Firms & a Perfect Storm. (ldobuzz.com)
- Outstanding Service from Law Firms? (ldobuzz.com)