Lean Methodologies for General Counsel - How can You Drive Efficiencies in the Legal Department through Process Excellence?

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In advance of the 7^th Corporate Counsel Exchange, IQPC Exchange caught up with Martin Clausen, General Counsel of Maersk Line, the largest container ship operator in the world, to discuss the way that Martin has incorporated lean methodologies, inspired by the process excellence department into his legal department, and what impact this is having on productivity. Martin has a legal team of 12 in Copenhagen, and there are approximately 30 lawyers located out of Denmark who use the standards and documents created by the Copenhagen legal team.

Legal IQ: Not many legal departments apply process improvement methodologies, why did Maersk Line decide to apply such methodologies and theories in the legal department?

Martin explained that to some extent it was a bit of a coincidence. In 2011 there was water damage in the Maersk Line head office so the legal team were temporarily relocated next door to the process improvement department. Martin thought it was silly to miss the opportunity, so approached the process improvement department to see if they could assist the legal team because they had already helped a number of departments in Maersk Line.

Legal IQ:  What systems, tools or frameworks have the legal department put in place?

Martin’s team have implemented a number of systems and methods and are planning to expand these in future. The key tool they are applying so far is visual management system. Many other departments started using visual management systems so the legal team also introduced these. The idea behind visual management is that you illustrate (on a whiteboard or similar) the processes or projects you are working on in some form of visual manner. You indicate at what stage you are at, what tasks you are doing, note how well the project or process is going and how happy or unhappy people are with the project and the current direction. This tool then keeps the whole department and yourself up to date on the project. Martin pointed out that visual management takes a lot of work as the participants must do multiple iterations on how it should look and how to get the right data so they continue to evolve and improve it so it becomes a better tool.

The team have also done some work observations with help from the process excellence department. In these observations they looked at how the legal team currently do their work and offered tips on how to improve their methods. They started by focussing on basic tasks rather than complicated processes: looking at how much difference a clean desk and a tidy email inbox can make. As Martin pointed out, in-house lawyers spend most of their time using these tools, yet very few are expert users; this is not an efficient use of their time. He also explained that although improving lawyers’ skills with Microsoft Word and Outlook will not necessarily improve the quality of the documents produced, becoming an expert user does free up a significant amount of their time which can be used on other tasks. Martins team spends significant time analysing the requests received in their shared inboxes. The analysis is used to guide the development of training and self-service solutions.

These work observations and findings have also led Martin and his team to search for external training on the tools they use regularly (Word and Outlook for example) and also to question whether these are actually the right tools for writing their legal documents.

The next stage for Maersk Line’s legal department is that they are planning a Gemba observation, scheduled for the near future; this is inspired by the process excellence team. A Gemba is a workplace observation technique used in Lean theory. The observer sits in silence next to someone to see how they are working. For example, they will see if the person is switching between tasks or doing things that are redundant and wasting their time.

 Legal IQ: How have the Maersk Line legal team monitored the success of the new processes and have they faced any challenges with monitoring it?

The legal team at Maersk Line have been gathering feedback from internal clients and so far it has been positive and they have expressed satisfaction with the results. When the legal team receive feedback they put this up onto the board, both good and bad feedback, to help the team put things in perspective. The team also continuously talk about what they think of the visual management system, how it is working and how they can improve on it.

 Legal IQ: In the future, how will corporate legal departments drive cost reductions and add value to their organisation, and can lean methodologies be applied in all legal departments?

Martin believes that there is a requirement within companies for everyone, including the legal department, to improve whether they like it or not. Something that keeps you focussed on continuous process improvement is necessary otherwise you can end up drowning in your daily work and fire-fighting.

In terms of the future for legal departments, Martin identifies offshoring as a trend. Maersk Line’s legal team are looking into establishing an offshore resource in Maersk Line’s global service centre – current candidates are the Maersk global service centres in Philippines and India, so these are possible locations for offshoring their legal work.

Another key trend we discussed is enabling legal department clients to help themselves. Technology is a key factor here as you can define a set of constraints and then empower people to create their own contracts. Maersk Line has already implemented such technology for a subsidiary and they are looking into implementing this on a wider scale.  The way it currently works is that the head office legal team define and input a set of rules to outline how the contract can be constructed into a piece of technology, the user in the subsidiary company completes a questionnaire and this generates a contract; so although the subsidiaries are creating the contract the head office legal team retain control. Martin believes that anyone who produces any standard contracts or documents is doing themselves a disservice if they are not investigating this type of technology.

Martin believes there is a ‘contrast’ between offshoring and automation as some people think that offshoring may actually be leapfrogged by departments who can move straight to automation.  Although offshoring is worth exploring, Martin explains that it can be dangerous to send work to low wage countries because wages will not be low for ever. Soon you could end up with a sizeable workforce who are not actually on a low wage! Added to this are the questions over the quality of offshored work, a concern for many General Counsel.

To conclude our interview, Martin explains that many General Counsel are looking for an excuse to retain manual processes and not move to automation, but we both agree that some lawyers are not technically minded so this could be hindering their move to automate. Automation does not lend itself to all processes, but as Martin explains, there are quite a few processes that do lend themselves to automation and it is remarkable how useful automation can be!

 Martin Clausen, General Counsel of Maersk Linewill be speaking on Applying Lean Methodologies and Techniques to Drive Efficiencies in the Legal Department at the 7th Corporate Counsel Exchange, taking place from 14^th – 16^th October 2012 in The Netherlands. More information about his session, the full programme, attendees and sponsorship opportunities can be found on www.corporatecounselexchange.co.uk