ACC Docket 74 May 2010

“When Textron started doing Six Sigma and Lean, we were all very skeptical — we were set in our ways. We thought it was just another fad. Once we started getting into the tools, that’s when I became a convert. To see how the tools helped us distill every-thing down to the basics has been phenomenal.”

Larry La Sala, senior associate general counsel

Many of us have experienced our business adopting an initiative “for everyone.” As corporate attorneys we have been able to make a case of “not applica-

ble here.” Initiatives such as Lean and Six Sigma have run rampant throughout corporate America. At last count, 80 percent of the top

Fortune 100 companies have some form of Six Sigma initiative. In general, during these types of initiatives, the legal function has been left alone to continue with business as usual.

In 2002, Textron launched its version of Lean/Six Sigma (called Textron Six Sigma, or TSS). The TSS initiative

promoted continuous improvement by using specific training, processes and tools. Initially we gave some attention to the program, but for the most part, contin-ued to do our jobs the way we have always done them. However, this was one program that didn’t seem to be

going away. If anything, it gained momentum as time went on. By 2005, we determined that if we were

going to do it, we didn’t have time to waste on just doing it half-way, so we made a full commitment.

We started by defining our five-year objective: to become the premier provider of in-house litigation management services of a multi-industry com-pany. Then we launched into a series of working sessions to identify and streamline our processes so we could understand our value streams and de-

liver what our customers needed most.

By Stephanie J. Kelly and D. Lynn Kelley

ACC Docket 75 May 2010

ACC Docket 76 May 2010

Uncovering revelations: Part 1In March 2006, we held a three-day ses-

sion with our key internal customers where we asked them to give us feedback on our services, and tell us how we might be more responsive. This was our first revelation:• What we thought: Controlling costs is the

most important thing to our customers.• What they told us: Preventative and legal

advice is the most important thing to our customers.We were surprised to discover that our

customers thought that litigation case manage-ment was a “necessary evil,” and what they really wanted was to be able to call us ahead of time and get advice so they didn’t end up in litigation. They wanted us to help them be proactive, and to supplement this with train-ing. This left us with an interesting dilemma because our litigation management resources were fixed and every lawyer was fully engaged in managing active case-matters. How could we continue necessary work while also finding time for preventative assistance?

During the March session, we also used the TSS framework to help us define our key value streams (the areas in which we primarily provide value to our internal customers). It became apparent that we needed to reduce complexity in our major value stream (managing litigation) in order to have time to focus on preventative law activities.

The value streams that were identified are shown in Figure 1.

Uncovering revelations: Part 2Our second team meeting was held in

May 2006, and was aimed at streamlining the litigation process. Again, we invited some of our internal customers. Prior to the meeting, we gathered data — using six weeks worth of time sheets that included categories and tasks of each person and function in the department. A sample of a timesheet is shown in Figure 2. We mapped these times on the value stream (Figure 3) and it became clear that there were areas of inefficiencies and times when multiple people “touched” a process, repeating the same activity. We found bottlenecks and a lack of standardization across the value stream: Each person handled the same task in his or her own manner. This obviously confused our customers who were told one thing by one person, and then something else by a different person.

With this information in hand, we had tangible evidence of what we had previously assumed — our major value stream for man-aging litigation was extremely inefficient.

Our customers were challenging us to provide preventa-tive assistance and we didn’t have time to dedicate to these efforts because we had waste in our major value stream. We realized we had an opportunity to meet our customer’s need for preventative assistance, if we could make our managing litigation value stream more efficient.

We spent the May session developing our “future state” value stream for managing litigation. The future state had four elements:1. Consolidation of redundant process steps;2. Standardization of key process steps and training to

support the standardization;3. Increased use of Team Connect (our litigation matter

management software program); and4. Shifting of meaningful work (integrating litigation as-

sistants as team players and using paralegals for junior associate-type work).

Turning future state into realitySince the development of our future state, we have

held annual assessments to evaluate our progress, using a standardized TSS assessment tool. From this assessment, each year we develop a prioritized list of improvements that need to take place, and we don’t leave the room until the top three improvements have been assigned to a team.

Stephanie J. Kelly is assistant general counsel – employment and privacy officer for textron

inc., headquartered in providence, Ri. She manages the company’s

employment matters and provides human resource counseling.

Kelly is a graduate of Syracuse University and Roger Williams

University School of law. She is a certified Six Sigma green belt and a trained black belt. She can be

contacted at skelly@textron.com.

D. lynn Kelley is vice president, operations excellence at textron inc. She oversees the engineer-

ing, integrated supply chain, procurement and corporate six sigma/quality councils. She is a member of textron’s executive

leadership team and a corporate officer. Kelley can be contacted at

lkelley@textron.com.

Figure 1

Defining Service Value StreamsManaging litigation: Cases and claims, insured and uninsured

Providing litigation services

Retain and manage outside counsel

Preventative law: Provide legal training

Preventative law: Provide legal advice

Negotiate and document agreements

Manage insurance claims and coverage issues

Records retention program

Manage corporate security program

Crisis management/medical

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ACC Docket 78 May 2010

Work standardizationAn example of one of the improvements is work standard-

ization. We were initially reluctant to standardize litigation management because we thought that it was impossible. Each case is unique and requires its own strategy, which may change as the case evolves. As we documented our “manag-ing litigation” value stream, it became clear that it wasn’t the actual managing of litigation that needed to be standardized, it was the steps around managing litigation that provided the greatest opportunity for efficiency. It suddenly became much more feasible — we could standardize processes such as receiving and assigning a matter, retaining outside counsel and claims review.

We initially tackled this by dividing our “managing liti-gation” process into three distinct parts — the beginning, middle and end. We focused on the steps at the beginning and end of the process and left the middle — the actual managing of litigation — to be reviewed at a future date. To standardize our work, teams worked together to share experiences and determine best practices. Cross-functional teams within legal developed standard operating pro-cedures, and training was conducted on these standard processes. We reallocated this work across the lawyers, paralegals and legal assistants in order to give the lawyers more time to focus on preventative law.

Preventative law and trainingAnother improvement focused on preventative law and

the training around it.

For this, we: • Worked with our customers to identify areas of up-

coming business activity that may create legal risk and dedicated resources to these areas of law;

• Developed relationships with our customers so they were comfortable calling us to ask questions and dis-cuss potential legal risks; and

• Educated our customers to identify areas of legal risk so they were able to recognize topics that require pre-ventative legal review. On a more formal basis, we have developed an annual

preventative legal training program to deliver to company leadership groups on a current topic of general inter-est. We have also prepared formal training programs to address new legislation and current legal trends as they arise. And, to focus our group’s training, we institutional-ized individual training plans that were tied to functional responsibilities and areas for improvement.

Reducing complexity within processesWe also completed a work allocation project. We

took blocks of work where there were too many “touch points” and eliminated the repetitive steps. Legal as-sistants became more actively involved in the day-to-day management of activities, and cross training occurred so that when people were unavailable, others could step in and perform those tasks. We set up workflow teams that changed our hierarchical structure to more of a team structure. The smaller group meeting created an

Figure 2

TYPE:TOXIC TORTENVTOTHER

#Cases/ClaimsPer Time Period

Processing TIme(Labor)

Lead Time(Elapsed)

#Resources/Type %Defect or Rework

Inventory(Current)

Receive matter and assign

Attorney preliminary review

Information gathering

Retain outside counsel

Notify insurers

Create matter

Analysis and strategy

Legal management

Update database

Claims review

Manage financial impact/invoice processing

Resolve/close matter

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ACC Docket 80 May 2010

atmosphere that encouraged more open dialogue. Law-yers, paralegals and legal assistants were learning more about each other’s roles and were able to improve steps in processes by better understanding what the next person in line needed from them. What is interesting about the workflow teams is that after two years, they became so successful that we actually didn’t need to formalize them any longer. We found that we naturally organized into teams at that point in our journey.

Maximizing technologyIn 2008, we addressed the Team Connect element of

our future state. Team Connect is a matter management software program that we use to track critical information necessary to better manage all aspects of litigation includ-

Figure 3

Legal assistants became more actively involved in theday-to-day management ofactivities, and cross training occurred so that when people were unavailable, others could step in and perform those tasks.

ACC Docket 81 May 2010

Inventory of GeneralCases = 55. Takt Time= 90 minutes.

55 Cases represent Q106 work, not including open cases in Legal mgmt.

ing discovery, internal reporting and cost containment. This software was used during the previous five years, but we weren’t entering data into the system consistently and we did not have robust reports; therefore, we were not using the system to its potential. We needed to put information in one place — with a single data entry point — and allow access to everyone who needed it. To address this, we: • Developed operating procedures to standardize the way

data is entered and organized;• Customized system fields that help us collect the infor-

mation we need to manage litigation effectively; and • Developed a standard set of reports that are easily

customizable, so we are better able to get information out of the system and provide that information to the people who need it.

Pitfalls to avoid: We have made a lot of progress, but in retrospect, there

are things that we should have done differently.

Everyone needs to speak the same languageInitially, we ran into a “jargon issue.” Our lawyers were

trained in TSS, but we did not train the paralegals and legal assistants. We had to expand the training to our full department because the specific jargon used in TSS was not easily understood without it. Along the same line, the strategic-level improvement projects were often just “con-cepts” that didn’t translate throughout our organization. We had to find ways to make the projects real to everyone.

First, we had an informal group training session with the paralegals and legal assistants, and in this session we

ACC Docket 82 May 2010

used an example that everyone can relate to — the process for making a cup of tea. We made an assembly line with items we found in the office and after we ran through the activity a few times we identified the process steps and created a value stream with the data we had collected — all the while using the TSS jargon. Toward the end of the session, we took what we learned throughout the activ-ity and had a group discussion relating it all back to the managing litigation value stream. Second, we sent our paralegals to the green belt TSS certification program. They identified their own TSS projects, and they included legal assistants on their project teams. The projects were more relatable as they were more task-oriented (and less strategic) and they were closer to what the paralegals and legal assistants do every day. We capitalized on the base-line understanding of TSS that we established with the paralegals and legal assistants. We began to relate daily work to the key elements of the managing litigation value stream so each person could understand where they fit in the process and how their work impacted it.

Create realistic expectationsThere were also unmet expectations. The fourth ele-

ment of our future state involving meaningful work pro-vided some opportunity for skill development as work was transferred from lawyers to paralegals, and from parale-gals to legal assistants. However, it didn’t entirely do away with the fact that some administrative tasks still needed to be done by someone, and much of the legal work has to be done by a lawyer. It was important to adjust expectations to the level at which we could provide enriching work.

Be mindful of people’s timeIn our zeal to be inclusive in adding meaningful work,

we found in the beginning that we were overly inclusive in inviting everyone to meetings. That doesn’t sound like a bad thing, but some of the projects that related primarily to lawyers, such as selection of outside counsel, did not require attendance by non-lawyers, who would initially sit

through full-day meetings while every detail of the future process was being planned. We now manage this better through report-outs and bringing people in and out of the project as needed.

Indicators of success We have gained employee engagement by creating

standardized and measurable performance objectives for everyone in the department. These “common objectives” are based on the objectives of the legal leaders, which are cascaded from the objectives of the enterprise. Employ-ees can now articulate how their work contributes to the bigger picture, both at the department level and the overall company level. We have the flexibility to modify common objectives for individual roles, but generally they are consistent and cover internal customer relations and satisfaction, talent development, cost containment, and continuous improvement and compliance. The com-mon objectives, coupled with quarterly performance management reviews, have increased employee engage-ment and buy-in.

The results of our efforts are evident in our metrics. We measure progress in continuous improvement efforts by conducting a Textron Business Systems Assessment, and in 2009 we achieved a score of “Silver.” We distribute an annual customer satisfaction survey, and have seen the scores go from 61 percent satisfied in 2008, to 81 percent satisfied in 2009. We have also generated financial savings by applying our standardized outside billing guidelines to external legal fees, and each year since 2007, we have saved the company money.

On the subject of cost containment, we do not want to leave the impression that it was not critical to the organiza-tion. In 2009, we instituted a number of initiatives includ-ing revised outside billing guidelines with tighter cost containment measures, an early case assessment process, and an outside cost containment initiative that achieved a minimum 10 percent billing rate discount and froze rates for at least 2009, which was embraced by more than 90

In 2009, we instituted a number of initiatives including revised outside billing guidelines with tighter cost containment measures, an early case assessment process, and an outside cost containment initiative that achieved a minimum 10 percent billing rate discount and froze rates for at least 2009, which was embraced by more than 90 percent of our major litigation providers.

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ACC Docket 84 May 2010

percent of our major litigation providers. We also took advantage of a second lawyer from a major US-based law firm and will continue this program through at least 2010. Other initiatives are in the planning stages for 2010, which include a protocol for controlling outside experts’ costs, and enhanced budget and litigation plan process.

Final thoughtsIntegrating TSS into our department hasn’t been an

easy process, but we can look back and see the progress we have made. We went from operating in silos, where each lawyer worked independently, to becoming a team

that works together for our internal customers. Most importantly, we’re not done. We just completed our latest assessment and have identified the top three things we will be working on in the coming year. Initially, we said we didn’t have time to do continuous improvement. How-ever, we now realize that when we take the time to focus on process improvement, we actually gain time to do the things that add value for our customers and in turn, enrich our own work experiences.

Have a comment on this article? Email editorinchief@acc.com.

ACC Extras on…Six Sigma & Law Department Metrics

ACC Docket• The Future of Contracts Seen Through Six Sigma

(Sept. 2007). Six Sigma offers attorneys a way to dotheir job more effectively. Learn how in this article. www.acc.com/docket/contrts_6sigma_sep07

• Constructing Standard Metrics of Your Law Department’s Value (Dec. 2006). This article discusses the Open Legal Standards Initiative and its mission to set the standard for quality and efficient legal services. www.acc.com/docket./metric_ldvalue_dec06

• Five Ways In-house Counsel Can Talk to Law Firms (Nov. 2005). Five key questions can help your department get service that is more attuned to your company’s competitive environment with a focus on Six Sigma. www.acc.com/docket/5ways_lfirm_nov05

• Six Sigma: Positioning for Competitive Advantage (Jan. 2001). Six Sigma can help you increase client satis-faction and reduce costs within your legal department. www.acc.com/docket/6sigma_comadvg_jan01

ACC Advocacy • The ACC Value Practice resource, “Use of Tailored Six

Sigma Methodologies at Seyfarth Shaw,” which focuses on Seyfarth’s efforts to apply a tailored version of Six Sigma practices to reengineer legal projects and deliver better results while using resources more efficiently. www.acc.com/legalresources/resource.cfm?show=80026

• Several other resources available in ACC’s Value Challenge Resources webpage, www.acc.com/valuechallenge/resources/index.cfm, discuss other litigation management practices.

Education• Let’s Get Organized: Using Six Sigma and Other Programs

to Streamline Law Department Procedures (Dec. 2007). Looking for optimal workflow, organization and productivity in your legal department? This material on how to apply top down and bottom up principles in conjunction with Six Sigma practices can help. www.acc.com/usesixsigma_dec07

• Metrics to Creating and Fostering a Successful Law Department (April 2007). This material will help you createa system for gathering metrics for a successful legal department. www.acc.com/metrics/ld_apr07

Article• Developing and Implementing Law Department Metrics that

Work (Nov. 2007). From ACC’s Law Department Executive Leadership Management Report, this article provides an overview of law department metrics. www.acc.com/ldept/metrics_nov07

Sample Form & Policy• Director Self-Assessment Questionnaire (Nov. 2003).

View this director self-assessment questionnaire to be completed by individual board members. www.acc.com/forms/dir_selfasst_nov03

ACC has more material on this subject on our website. Visit www.acc.com, where you can browse our resources by practice area or use our search to find documents by keyword.

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