Clifford Chance

Facing rapidly changing markets and growing competitive pressures worldwide, every business needs to become as efficient as possible. Increased scrutiny on costs, faster delivery expectations and the need to provide a better work-life balance for employees are increasingly becoming important areas of focus for a wide range of businesses. As outlined in the 2021 EY Law Survey, for most legal departments, the workload is expected to increase by 25% over the next three years, while headcount is only projected to increase by 3%. In addition, 87% of GCs say that they spent too much money on low-complexity work. This creates a need for better ways of working to enable greater value and more efficient use of resources. In-house legal teams are particularly affected by this, as the points mentioned above are especially relevant for service-oriented business areas.

This problem is often referred to as the "more for less challenge", where the service provider is expected to deliver the greatest possible value in the shortest possible time and at the lowest possible cost without compromising the quality of the service given. One technique to overcome this challenge is to analyse common tasks and processes and apply the continuous improvement methodology.

In this blog, we explore the role of continuous improvement in modern legal departments, the benefits of implementing continuous improvement in your business and why process improvement will continue to grow in the future.

Continuous Improvement – Is it still relevant?

Continuous Improvement (CI), also known as process improvement, is based on the principle that any process can be streamlined and improved without compromising quality. By fully understanding who and what is involved in each task and drawing on the experience of those carrying it out, process improvement can create significant value. This benefits both those involved in the process and the recipients of the service, who receive a faster, more cost-effective and more convenient experience.

However, with the emergence of innovations such as Legal Technology, Legal Project Managers or paralegal-type Delivery Centres in the legal market, the focus of legal departments is less and less on traditional process management. Many of the tasks that occur in a process can be improved through the use of technology or alternative resources. Therefore, the question arises whether process improvement at its core is rendered obsolete by these innovations?

The simple answer to the question is: No, process improvement projects are much more complex than simply plugging in any legal tech tool to change the way a task within the process is done. One can say that process improvement does the groundwork to make sure that any tools or services that get implemented really address the underlying cause and not just the symptom. In many cases, technologies can only develop their full potential in standardised processes, without which they run the risk of being unable to meet the expectations. From mapping the current process to identifying the root causes for pain points and their solutions, to adapting the solutions to the needs of the process users - A process improvement specialist has a holistic view of a process and coordinates all available resources. Every innovation can serve as part of a solution within a process, while process specialists work with the users to implement the solutions in a redesigned process, showing that legal technology and process improvement are not mutually exclusive, but complementary.

As a result, the skillset of process improvement specialists in professional service firms had to expand in the last 10 to 15 years to remain relevant for modern legal departments. In addition to the traditional skillset, a comprehensive knowledge of available technologies, alternative resources and a deeper understanding of the daily business of lawyers is essential today. Therefore, CI specialists need to stay on top of any innovations and increasingly exchange information with positions such as IT, legal tech advisors or alternative legal resources. Furthermore, managing change within an organisation in a constantly evolving business landscape is a skill that is becoming increasingly important for CI specialists, as many improvement projects are accompanied by the need for change.

Understanding the benefits of Continuous Improvement for today's legal departments

We have seen that improving processes remains relevant and some of the benefits that the use of CI can bring, but how do legal departments get there, especially if they do not have a team of CI specialists within their organisation?

Firstly, it is worth considering whether a workshop with an external company, designed to ensure that processes run as smoothly as possible within your organisation, would be of value. In this regard, legal teams could increasingly partner up with private practice law firms to benefit from their capabilities.

Secondly, it is still possible to engage with Continuous Improvement principles without having a specific person or team dedicated to it. In many cases, the process users have never engaged with the idea of improving the process. It is often carried out as it has always been done and may use outdated methods. This is where any process user can identify tasks or process steps that regularly prove inefficient and try to improve them. Whether it is creating a template for recurring documents or emails in Word, creating a to-do list or checklist, or reducing unnecessary rounds of feedback. Often the introduction of seemingly simple solutions can have a significant impact on workplace efficiency, and sometimes just ensuring that everyone is following the same process is enough to make gains.

In any case, companies should ask themselves whether they need their own process specialist to become more efficient and get to the root of existing problems. Particularly in the case of processes that are to be improved holistically, the complexity of implementing newly found solutions into comprehensive processes still requires the involvement of a specialist.

At Clifford Chance, a dedicated Continuous Improvement program was developed in 2010 which has been growing ever since. Working alongside the lawyers to help streamline legal tasks and deliver outstanding value, the CI program has brought benefits not only to the internal processes but also improved the client experience significantly. This became evident in a cross-border merger where the CI team focused on the due diligence process. Here the process was streamlined, alternative resources (Legal Project Managers) were deployed, and a collaboration platform was used. This new approach proved to be highly successful, with the total cost of finishing at less than half the predicted cost of the traditional approach.

Will Continuous improvement continue to grow in relevance for legal departments in the future?

The "more for less" challenge has become increasingly important in recent years, and the global pandemic has reinforced this effect. In the 2021 EY Law Survey, over 50% of CEOs expected significant cost reductions in the next three years, while 88% of general managers said they planned to cut costs based on their CEOs' targets.

Optimising processes is thereby the third highest priority among cost-saving opportunities, with about 1/3 of GCs stating that optimised processes could lead to significant cost savings. The main problem for legal departments in this regard is that they need more skills to automate processes (83%), while it is also extremely difficult for them to find the right processes for optimisation (90%). Technology is the number one priority: 59 % of GCs favour using technology to save costs, while the vast majority (79 %) have difficulties securing the necessary budget.

This shows that Continuous Improvement can play an important role in enabling companies to remain competitive and profitable in a market that is under pressure from both outside and inside.

In addition to the more data-oriented numbers, the 'war for talent' within the legal sector poses another challenge for legal departments and law firms. Newly qualified lawyers usually have a choice of where they want to work, and law firms and legal departments compete for the best talent from the very beginning of law school. Using continuous improvement and other innovative new processes to create and operate more efficiently, legal teams can stand out in the market and attract and retain the best legal talent. Lawyers will benefit from this by spending less time on mundane, tedious, and repetitive tasks, which can significantly impact their work-life balance and job satisfaction.