Given my interest in law factory, I was excited to read recently about a firm that actually built one.

Foreclosure firm goes statistical to improve speed and quality in the ABA Journal  (March 2014) is an in-depth and fascinating look at how The Hunoval Law Firm built a high-volume, efficient foreclosure practice using Lean Six Sigma. I start with excerpts from the article, then report on my discussion with Ted Theodoropoulos of Acrowire, who helped the firm build its law factory.

Here are key excerpts:

“In the firm’s first concentrated effort at new efficiencies that began in January 2013, it achieved an impressive 88 percent decrease in the number of days it takes from the time a North Carolina foreclosure referral arrives until it files the notice of hearing that begins the process in the courts. An average of 69 days was whittled to just eight….

Hunoval had learned of LSS [Lean Six Sigma] from a personal friend, Ted Theodoropoulos, whose company Acrowire helped develop the law firm’s IT system—and who also happens to be an LSS black belt who works with law firms on process improvement.

“With such a highly commoditized practice like default service, Lean Six Sigma seemed a perfect match—except to a lot of law firms,” says Theodoropoulos, who did process management for Bank of America before going out on his own. “Matt wasn’t tied up by having done things a certain way for so long that he couldn’t imagine a better way. He got it.”…

Large flat-screen monitors mounted on walls in common areas, such as above photocopy machines, display color-coded spreadsheets detailing the past month’s workflow and totals in various tasks. At the bottom of the screens, graphics that look like streaming stock quotes carry status updates on case files, from intake to courthouse, showing where they are in each stage of the process and making it easy to spot problems that could slow or even halt their work.

Outlining the problem of long delays, CIO Kevin Divine of the Hunoval Law Firm asked supervisors and staff in the firm’s North Carolina default department how long they thought it took from file intake to sending out a notice of hearing to launch the foreclosure process. Anecdotally, they saw it as 14 to 20 days. But the crunched numbers tallied 69.”

I spoke to Ted to learn more, both about the process re-engineering and the technology Acrowire deployed for Hunoval.

Ted said that he had started by evaluating the foreclosure process as he found it. Ted clocked (literally, with a stop watch) each step in key processes. This helped identify areas for improvement. One example was developing a consistent way to handle the number of lines in a debtor’s address.

Digging deeper by talking to staff, Ted discovered “hidden factories”.  For example, some staff could not get a an envelope feeder to work so they created a manual work-around.  I love the term “hidden factories” – law firms of all sizes are full of them.

Another hidden factory was built to cut checks. Once the firm marks a loan as distressed and appropriate to foreclose, the firm must schedule a hearing. This requires cutting a check for the court fee. Staff would fill out a paper check-request form as they processed loans and send the completed form to accounts payable. This resulted in check requests accumulating – with delays – in the accounts payable office.

The digital request form converted a sequential process into a parallel one: AP could now cut checks while staff continued to process loans. This meant that by the time papers were ready for court, so too was a check. This saved a couple of days of turnaround time.  [Note: Ted would have liked to pay courts digitally but that is not possible now.]

The examples illustrate that process improvements can range from the “micro” (managing addresses) to the “macro” (changing workflows). In the first re-engineering process on which I worked, we changed everything from how lawyers reviewed discovery documents to how legal assistants applied bar code labels to pieces of paper. You always need micro and macro views.

The software behind the process improvements is reasonably straightforward:

  • Workflow is built on SharePoint
  • Performance data is extracted from an existing practice management system into a datamart built on SQL Server.
  • Metrics are driven from this data by Minitab and displayed to all staff via large overhead monitors. A ticker runs along the bottom and the state shown rotates every 30 seconds.  (I had not heard of Minitab and asked if it is like Tableaux, which is cool data visualization software. Ted said yes but that Minitab is better aligned with the precepts of Lean Six Sigma.)

The work here illustrates it is possible to build a law factory to improve law firm performance and client service. It also illustrates the close marriage of technology deployment and business process improvement.  (Acrowire’s range of technology services includes support for cloud-services, desktop virtualization, collaboration, and custom development, all supported by business process improvement.)

The law factory results are clear visiting the Process page of the Hunoval website. First, most firms don’t have such a page. And second, it highlights a faster process powered by Lean Six Sigma, accelerated time to sale, targeted efficiency, and rapid scalability. Clearly, this is not the usual law firm.

Some may dismiss the applicability of the story here to large law firms, thinking that in Big Law, there is not enough routine work to warrant this type of effort. Perhaps. But enough large law firms have done similar projects to suggest we have only just begun the journey to uncover hidden factories and fix them.