Lean Six Sigma Principles Can Be Applied In-House

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By Susan Bokermann

April 20 — As an in-house lawyer, there are real advantages to streamlining procedures and processes, said Cara Bradley, deputy general counsel at Xylem Inc.

The question corporate legal departments should be asking themselves is, “What does success look like [for our department],” said Suchitra Narayen, vice-president and associate general counsel at Oracle Corp. She said that utilizing Lean Six Sigma principles will get to this outcome.

Bradley and Narayen spoke on a panel discussing the application of Six Sigma principles to corporate legal departments during the American Bar Association’s Business Law Section spring meeting April 16.

Improving Quality

Six Sigma is a set of tools that companies can use to improve their processes, said Narayen. It was originally developed for use in manufacturing companies to improve the quality of their outputs by finding and removing errors. “Quality is what Six Sigma is all about,” said Narayen.

Six Sigma is “how you come to perfect an outcome,” said Rafael Zahralddin-Aravena, founding shareholder and chair of the national commercial bankruptcy and restructuring practice at Elliott Greenleaf.

Six Sigma considers how to get from “somebody should do something” to “getting consensus of who is going to do what,” said Narayen. You can go through the process, but you “have to go through the process legitimately.”

Narayen used the example of a senior executive in a company requesting a contract be drafted by one of the in-house attorneys. The senior executive expects it be finished by the time she returns from lunch. The in-house attorney begins to draft, but realizes that there are many unanswered questions regarding the contract, and so the draft is not completed by the time the executive returns from lunch. Narayen emphasized that all of the stakeholders in the process have to “be on the same page.”

Project Management

Improving communication among all the members of the process is essential to project management. “Lengthening that initial conversation to make sure we know what is expected” is key, said Thomas Romer, shareholder at Brownstein Hyatt Farber Schreck, LLP. “All lawyers are project managers,” said Romer, “we’re really just not that good.”

An important part of project management is defining the scope of service, said Zahralddin-Aravena. This “goes beyond the ethical requirements” and “should not be done without the client.”

Rather than defining the scope of service as “drafting a contract,” he said a good lawyer should discuss budget and how it will be monitored, estimates and any limits for spend, a process of alerts and reviews for when the project nears any limits and different phase or task codes to determine exactly what resources are being allocated and where.

This demystifies the legal process, said Romer, because it provides predictability through budget management. “As lawyers, we have been trying to achieve all three: time, quality and price.” He said we’re “being dishonest if we don’t tell our clients they will have to pick two.”

“These are not panaceas,” said Romer. But the panelists agreed that using Six Sigma principles and improving project management are tools that are important to corporate legal departments.

To contact the reporter on this story: Susan Bokermann in San Francisco at sbokermann@bna.com

To contact the editor responsible for this story: Kristyn Hyland at khyland@bna.com