Twin Cities law firms embrace ideas from factories to lower costs, improve efficiency

Tom Snavely's job is to help the law firm of Faegre Baker Daniels, the largest in the Twin Cities, run like a well-oiled machine.

Snavely is part of a local and national shift to apply business management principles traditionally used in manufacturing to law firms as clients push for more efficient legal services.

"Our clients are looking for more creative ways to provide more predictable costs and these tools help us get there," said Snavely, the firm's manager of legal process improvement and project management.

But can the techniques that have made production lines at factories and research labs more efficient work to modernize the bureaucratic ways of conventional law firms?

In recent years, more law firms have focused on legal project management, or LPM, which refers to the application of project management principles to better streamline legal matters. Often LPM entails leveraging data and tracking progress to offer clients a greater sense of transparency. A related concept is legal process improvement, or LPI, in which firms more broadly map out steps in their processes to look for ways to improve.

To achieve better efficiency, a lot of LPM and LPI professionals turn to a variation of the Lean manufacturing methodology to eliminate waste of resources and Six Sigma quality management techniques that try to remove the cause of product defects.

Despite project management being rather common in other professional services such as accounting, law firms are only recently starting to take it seriously, said Susan Lambreth, a founding principal at LawVision Group and national LPM consultant.

Law firms are normally paid by the hour, a pay structure that can be at odds with clients' priorities to save time and money.

"There was less incentive to be 'what's the best, fastest way to do this,'" Lambreth said.

Since the 2008 recession, law firms have had to rethink how they manage their services as clients have become more cost-conscious.

More often than before, corporate clients ask for predictable pricing and want to negotiate alternative fee arrangements, said Bree Johnson, the director of strategy, pricing and legal project management at local firm Stinson Leonard Street. Last year, Stinson participated in a handful of reverse e-auctions in which firms compete online for a client's business.

"As clients started to ask law firms for this type of service, legal project management and AFAs, there had to be people available to respond to that," Johnson said. "While our leadership has been exceptionally supportive of what we do and has really genuinely supported us, it's really because clients are asking for it."

Johnson's LPM role is the first of its kind at the firm. Along with a team of four legal project managers and two pricing strategists, Johnson oversees requests for proposals and helps attorneys as clients ask for pricing analysis among other tasks.

In the Twin Cities, many of the area's top law firms have recently made investments in LPM or LPI by hiring specialized personnel, training staff on the core principals or using technology.

Rebekah Anderson spent 20 years at 3M, where she worked in marketing, product development and information services before she joined law firm Fredrikson & Byron. She is currently the firm's chief practice management officer.

FredAdvantage is the firm's formal program focused on LPM and LPI. The firm formed a team of attorneys from different law groups to act as "champions" of LPM. Fredrikson & Byron also has a pricing coordinator to help clients with their budget concerns and the firm has trained 100 lawyers and paralegals.

"By stepping back and instead hitching the wagon to where lawyers were at, and they were at a place of trying to deliver good service and good values, I've been able to work with others to bring [LPM] in the back door and it's a softer sell," Anderson said.

Norah Olson Bluvshtein, a shareholder at Fredrikson, said she has seen the benefits of LPM, such as when there have been clients who wanted to sue others but after the firm takes them through the process and costs, the clients ultimately decide against it.

"LPM changes things because you are taking a little bit more time upfront," she said.

At Faegre Baker Daniels, a lot of emphasis has been put on training. The firm was an early adopter, forming a working group around LPM and LPI in 2009. The group of about 30 people obtained certification in legal-oriented Lean Sigma and later an additional 100 employees were certified first starting with operations professionals and then including lawyers.

Even those who have not been officially trained have been exposed to process mapping to be able to better streamline tasks. Faegre also developed internal, digital "matter sites" that help staff keep records of information and where projects are at in the process.

Thanks to the firm's application of LPI, it was able to save about 40 percent of the time it took to complete visa applications by making a few simple adjustments such as adding the due date for certain documents and providing tips.

"It's not always about something earth shattering," said Steven Petrie, chief strategy officer at Faegre.

More advanced technology usage by law firms has been another large effect of the push for LPM. The Dorsey & Whitney law firm has already used predictive coding technology successfully in its LegalMine document review service. Now, the firm has expanded to use software for LPM to track the tasks and activities legal staff conduct for clients.

"Litigation is very complex," said Robert "Skipp" Swayze, Dorsey's chief financial officer. "There's no way to predict how much litigation is going to cost ... but if you take little pieces of it and look at it, you can be predictive for three or four months. That gives you an idea of where this case is going."

Dorsey partners say that LPM practices helped them keep a handle on the details of more than 80 cases that arose out of the Tom Petters' Ponzi scheme and the resulting bankruptcy liquidation.

The Twin Cities is considered unusually progressive in terms of the number of firms that are actively working on LPM, Lambreth said. Despite the growth of LPM, it still has a ways to go to get a greater percentage of lawyers to buy-in to the ideas, executives say.

"It's tough for attorneys who have been in this space for a very long time to have to change how they think about things and … think of the other part that they don't like to think about, the budget," Johnson said.

LPM experts predict in the future that law firms will further expand LPM and LPI application to more complicated tasks plus initiatives will be more data-driven. However, the biggest challenge remains to be cultural over technical, Lambreth said.

"It's not that complex to learn," she said. "The biggest change is to change how lawyers think and how they interact with their clients and their internal teams."