Strategic operations issues and Lean Synchronisation

Introduction:

Lean synchronization is an emerging practice that seeks to streamline the ‘flow of products and services in order to eliminate waste. The aim of this paper is to identify the strategic operational issues in relation to A&B Partners (a law firm referred to as “A&B”), more specifically with the process of signing out mail.

The paper has three sections. Firstly, the definition of lean synchronization (referred to herein as “LS”) will be defined, especially within the service industry, followed by outlining the current process of signing out mail at A&B. By analyzing the existing procedure in the context of lean synchronization, the paper will highlight the delays and imperfections of the existing procedure, as well as provide recommendations to improve the process in order to improve the five performance objectives.

What is lean synchronization?

LS is a process of production with the ‘aim of achieving a flow of products and services that always delivers exactly what customers want, in exact quantities, exactly when needed, exactly when required, and at the lowest possible cost’. It has successfully been implemented in such corporations as Toyota and the Bolton Hospitals National Health Service Trust. Both examples aim ‘to achieve perfect synchronization through smooth and even flow’. It is important to note that LS cannot be achieved overnight, but it is a continuous process and should serve as an objective that managers should incessantly strive for.

Given that LS requires the cooperation of everyone involved in the process and the supply network, there needs to be transparency and communication between everyone involved, especially those involved with the operational components of the process and/or supply network. The goal of LS is to open up the work process and abolish the usual hierarchies of traditional management to provide ‘smooth, uninterrupted flow without delay, waste or imperfection of any kind’.

Whilst the idea of LS is well established in the manufacturing sector, the benefits of implementing the philosophy in the service industry can achieve equally valuable results. Pixar Animation Studios adopted Toyota’s approach to management and it has resulted in being a leader of computer graphics in filmmaking.

The encouragement of continuous advice and criticism from its creative teams brings problems to the surface before it becomes crises and affects the overall operation. By encouraging open communication during LS the responsibility for solving the problem is now shared with everyone, ‘improving the chances of the problem being solved’ in the most efficient and cost-effective manner in order to reply to the customer’s needs and demands.

A & B Partners

A & B Partners (“A&B”) is a specialized insurance and commercial litigation law firm. The objectives of the business are to be the leader in the area of insurance law, more specifically motor vehicle insurance, public liability, and home insurance. The firm acts for various insurance companies and there is often a panel of law firms acting for these insurance companies.

Whilst in most law firms there is only one client, in insurance litigation there are various stakeholder interests to weigh up. There is the insurance company (“Client”) who insures the insured (“IO”) or the insured’s company, motor vehicle, or home, the shareholders of the Client and upholding the Client’s obligations to the Insurance Commission Board, to which it is a signatory to. Weighing up these interests is sometimes a difficult and, often, a contradictory juggling act, which is made even more difficult with the solicitor’s obligation to the firm, his/her budget, the impact of settling one file affecting another file with the same opposition, complying with one’s obligations with the Legal Services Board and a solicitor’s primary duty to the court as an officer of the court, which overrides every other obligation.

In insurance litigation, more specifically, in motor vehicle insurance, there are often the same law firms within the “game”. However, occasionally the other driver involved in the accident (“TPD”) chooses not to go through their insurance company and either go through another law firm or a recovery agent law firm that specializes in issuing against insurance companies or chooses to be unrepresented. Therefore, you often have multiple matters against any one firm at the one time and, hence, how you interact with that firm on one matter will most likely influence how settlement negotiations will be dictated in another.

Because of the contract, A&B has with the client, all new files must be actioned within 48 hours. This is high volume, low variety work which often sees a solicitor handling 100- 115 files. The main principles are: - provide concise, practical, and commercially focused advice - proactively manage all disputes

- resolve disputes at the earliest possible opportunity
- build long-term client relationship
- deliver value for money

Because A&B is often part of a panel of firms that continuously have to re-submit tenders every 5-7 years, it is competing with other firms to provide the best service. This is measured but to key performance indicators:

1. Total days it took to resolve the matter;
2. Recovery/Settlement rate (how much the client spent on legal costs compared to how much was recovered or how much was paid out to the TPD).

Mail signing

Given the main KPIs are total days turnover and recover/settlement rates, speed and accuracy of advice are important. Law is often a game of chess. Even though most matters follow the same formula there is often one detail that can change the solicitor’s strategic approach to the whole matter and anticipating the other solicitor’s move will determine your next action. Because A&B is well regarded nationally as being one of the foremost leaders in its field, ensuring every document that leaves the firm from all 20-plus solicitors is consistent and aligned with the objectives of the firm, the client, and the insured is important. This has resulted in a policy that all outgoing mail/documents must be signed off by a Partner.

There are two Partners that are in charge of the motor vehicle team which consists of twelve Solicitors. Throughout the day solicitors place their completed correspondence in a designated pile in the respective partner’s office. Because each solicitor handles files from more than one jurisdiction, often the solicitors have to drop off correspondence in both partners’ offices. At approximately 3 pm the process of mail signing and discussing any issues or problems with files commences. This is often a long and arduous process, eating into valuable billing time of the solicitors and partners, who also have 100-plus files of their own they are running.

A minor mistake in a letter, for example, an incorrect spelling of someone’s name, will result in the mail not being signed out and having it be forwarded back to the solicitor’s secretary for amending. By the time it returns to the solicitor to give back to the partner, it is the end of the business day, mail people have gone home, or worse, the designated partner has left for the day and the letter must be re-amended to change the date to the next business day. What may be a simple task of forwarding documents to another party in the proceedings has taken more than two days to complete.

Performance objectives of the current systems

The aspects of the current mail signing procedure do not comply with all of the performance objectives of A&B.

Quality

The quality of work is high as most letters are of similar standard and style. Whilst most of the documents conform to some type of readymade precedent on the system, many do not. Furthermore, the precedents are often out of date and do not correspond with the costs allowed by the court. Additionally, numerous new cases have been handed down, which contradict the precedent letters regarding advice on liability and apportionment of costs. Even though the decisions in these cases are not upheld strictly in the local court and the courts of similar jurisdiction in other states and territories, it does add to the persuasiveness of one’s argument.

Speed

As previously stated one of the KPIs is the total amount of days the matte was open with the firm and how long it took to resolve the matter Therefore, timing is crucial. It is generally a rule that all matters be issued or actioned within 48 hours of the files being received by the firm. However, one to two days are lost at the beginning with the claims department printing the file, and forwarding the said file to a partner who then allocates it to a solicitor. If in the unlikelihood, the file contains all the documents needed to be actioned, it will still take a further two days at best to send out the first letter due to the backlog of dictation waiting to be typed up by the secretaries (at this stage, the ratio of secretaries to solicitors is 1:2.5), checked by the partner and ready to be sent out on the first attempt. Within the first week of receiving the file, the file is sitting idle in a partner’s office or in a dictation line for at least half of the time.

Dependability

While every attempt is made to respond to a client’s request within 48 hours, it is difficult with the amount of file load a solicitor has and the amount of “urgent” matters that need to be actioned that very day. As every solicitor’s schedule is different, (i.e time or hearings and amount of hearings) it is difficult to provide a guaranteed response time across the whole firm.

Flexibility

A&B values its relationship with its clients. Ensuring that we are able to provide general advice that we do not bill for, whilst performing the billable work is essential in ensuring A&B maintains client relationships as contracts must be re-tendered every 3-5 years. It is this “extra-value service” that sets A&B apart from the competition. Often it involves dropping whatever billable task is being performed and providing the client with comprehensive researched advice based on current law and trends in a particular jurisdiction by the close of business that day or the next morning.

Cost

Due to the highly competitive nature of the market, A&B has been the leader in introducing a fixed-fee pricing framework. If a matter only gets to a certain stage, A&B will only charge a pre-determined amount no matter how many phone calls/letters were drafted or how much work was required. This has reduced the time solicitors spend on costing a file and it also forces the solicitor to adopt lean processes to ensure maximum results with minimum effort.

Discounts are provided if the matter has not been finalized within the required time and if the settlement/recovery rate is not achieved. Conversely, solicitors are entitled to charge an uplift if matters are finalized within the agreed time frame and the recovery/settlement rate is achieved. The days of putting certain files in the “too hard” basket and waiting for schedules to slow down are gone due to this new pricing framework.

Lean synchronization

The rigidity of conforming to a particular style of writing affects the dependability, speed, and, ultimately, the cost of the performance objectives of A&B. Not enough training is provided to new solicitors as to the “A&B way” of drafting and negotiating. Furthermore, the knowledge and experience of the partners are vital to the solicitor’s application of the law to current files. Seeing each solicitor individually and having to wait until mail signing time to request guidance does not assist with the firm’s objective of providing quick and efficient legal solutions as it adds to the waste of irregular flow.

Given the new pricing framework, the importance of lean synchronization has never been more important. The goal for all solicitors is to provide advice that will ensure an excellent recovery/settlement rate and quick resolution of the matter. With difficult files that do not fit the established precedent letters, advice from the partners is essential. However, as stated above, waiting until mail signing time is not ideal as there are often other solicitors needing their mail signed out and often there will be corrections that need to be made.

Often making an appointment the next available business day is required to go into depth the theory behind certain legal principles as well as formulating a response that “fits” the intended audience as writing to a client differs greatly from writing to other firms and there is even a difference in the style of writing depending on who the law firm is.

Often the Partners do not understand why things have taken as long as it has due to non-transparency and non-communication between the different processes:

1. The amount of dictating the secretaries have to type;
2. The file load of the solicitor;
3. The amount of extra research the solicitor is doing that is unable to be billed;
4. The insufficient claims documents being supplied by the Client and, therefore, the amount of time spent chasing the client or IO for additional information;
5. The amount of time wasted whilst being on hold with the Client to seek further instructions. All of the above factors contribute to waste on a file that is simple and straightforward. Files that are complex are expected to take longer as it often needs to be explained to the Client and IO in more detail.

Recommendations

Given the word limit, only two recommendations will be outlined briefly.

Decrease the file load of the partners

Within the legal field imparting one’s experience of a certain judge, opposition or client is just as important as one’s knowledge of the principles of the law. Knowing the credibility of your own client will be a major deciding factor in any case. The wisdom and experience of a partner are vital. Therefore, the Partner should assume more of a mentor role and harness their time to teach the solicitors the skills they have acquired throughout their careers.

In time this knowledge can be passed on to the Senior Associates who can then share the responsibilities of signing out the mail of the other solicitor, as well as aiding the solicitors with any queries. Access to knowledge and guidance will be readily acceptable, therefore, reducing the waiting time and delays between activities.

Regular solicitors meetings

Conducting regular solicitors meetings of 4-5 solicitors where each solicitor raises any problems they have with a file or a particular process (i.e secretarial support is spread too thin) can serve two purposes;

1. It communicates any processes to senior management that are not working on an operational level; and
2. It encourages solicitors to work together to resolve “problem files” whilst allowing greater access to knowledge from other solicitors’ successful (not so successful) negotiating techniques, approaches, legal strategies, etc. In time the solicitors will have confidence in their ability to provide correct legal advice and the inefficient process of mail signing will be eradicated for experienced solicitors.

Conclusion

Based on the analysis above, we can conclude the current mail signing process is time-consuming and involves unnecessary processes that can eradicate completely or modified to increase the time available the solicitors can bill the client for. Eventually, the aim of adopting LS processes should be to increase access to information, whether that is recent trends in specific courts to theoretical knowledge of the legal principles so as to avoid the current bottleneck system. Partners should assume more of a mentor role and harness their time to teach the solicitors the skills they have acquired throughout their careers. Access to knowledge and guidance will be readily acceptable, therefore, reducing the waiting time and delays between activities.

Cite this Page

Strategic operations issues and Lean Synchronisation. (2016, Aug 13). Retrieved from https://phdessay.com/strategic-operations-issues-and-lean-synchronisation/

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