Lean Document Review

Bruce MacEwen of Adam Smith, Esq., shares his interview with Ray Bayley, co-founder of NovusLaw. You'll likely walk away with a much different view of business process outsourcing. One of the major concerns about outsourcing legal work, including document review, is quality. Case managers wonder whether contract lawyers can provide the same quality output as highly paid associates working at law firms, in particular large law firms with plenty of resources. Bayley responds:

"Quality is one of our 'cornerstone' initiatives, along with ethics, security, and business continuity planning—all of which report directly to me.   In fact, we started our quality program before we even started the company.  But now our 'lean six Sigma' processes and quality control programs are certified by Underwriters' Labs, with full-time six sigma black belts on board that do nothing else but focus on quality.  'Lean,' which is a term that comes from the Toyota Production System, stands for the methodology used to eliminate non-value-added time and activity, a/k/a waste.  'Waste,' in turn, has a very simple definition:  Anything the client wouldn't want pay for if they were given a choice.

"Six Sigma is what we use to eliminate defects as we measure and analyze our work processes.  Typically, undocumented processes will yield 20,000—60,000 defects per million opportunities.  Six Sigma is designed to get that down to fewer than 4/million.  On our most recent document review we performed at Five Sigma, or approximately 200 defects per million.  By the way, that's about 200 times better than the average in the legal industry today."

As I wrote recently, this is the first time I've read about an entity applying lean production concepts to legal services.  And the document review process, of course, has the potential for involving a great deal of waste, making lean a good approach. At least as important as minimizing waste, however, the Toyota Production System emphasizes the value of respect for people.  Bayley also outlines his approach on this issue:

"Obviously it starts with who we hire: with recruitment.  The average lawyer at  NovusLaw has approximately eight years of experience, and we believe we've been able to attract talent on a par of those in AmLaw 100 firms with comparable experience.  Everyone interviews with me and each of my partners, as well as going through nearly a half dozen other interviews to ensure cultural compatibility.  NovusLaw is not for everyone.  If you can work independently, have a strong work ethic, and if you're smart about BPO—and if you have a sense of adventure—then you're a good candidate for us.  And I think our attrition statistics bear this out:  Only 3-4%/year.  It's a tough process to get in, but once you're in, you're in."

These are good numbers. Bayley's recruitment method reminds me of Toyota's when it opened its facility in Hebron, Kentucky. His organization obviously is taking a different approach to working with its people.

Now, these statements raise a lot of questions. How do you define "defect" in the ambiguous world of identifying relevance and privilege?  This measure doesn't easily translate from the manufacturing context. What specific processes do they use to minimize waste? What kind of waste is it? How do you show respect for people, while tasking them with some of the most repetitive and least glamorous work in the legal field?

But the real lesson here has nothing to do with business process outsourcing. It's that lean has something to offer the world of legal services. Indeed, nothing prevents lawyers and law firms from changing their own processes -- directly -- and using lean principles to improve their work.

D. Mark Jackson

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