01 September 2011, by Martin Goh and Kelvin Wu, JLT Risk Consulting Asia
There is a myriad of books on quality management for various professions including the legal profession. Accordingly, this article does not set out to provide a one-fits-all solution but a highlight the benefits of implementing a Quality Management System in a law firm. The starting point would be for a designated partner / manager to push for the change of mind set in order to implement and secure the benefits of a quality management system.
The Case for Quality
There are obvious risks such as the meeting of deadlines, data storage and backup or succession planning and defection of partners. Perhaps, one of the most pertinent risk is that of
quality and ethical services provided by lawyers of the firm. Such risks take on greater significance given its intangible nature.
Case in point, a lawyer in Singapore was initially convicted for helping a client make a false court claim.
[1] Although the conviction was eventually appealed and overturned after a five-year legal battle, the damage to his reputation had already been done. Firms have typically leaned heavily upon existing legal regulation to guide the behaviour of their lawyers. However, scholars and commentators on legal ethics have suggested that one major drawback of legal profession regulation and ethics is that the focus continues to remain on individual lawyers alone.
[2]
There have been cases where firm-level policies and procedures create economic and social incentives for unethical individual conduct, or at least where firm management systems and cultures do not do enough to make ethical conduct regular and systematic.
[3] Thus, although lawyers are given great autonomy in their interactions with clients, increasingly it cannot be denied that putting in place appropriate management systems in the firm will go a long way towards ensuring that the firm mitigates the risk of non-compliance with ethical and quality obligations.
Quality Management Systems
Several quality management standards have been developed which are designed to help institutionalise quality processes within firms to reduce these risk exposures. One standard that has gained wide adoption is the ISO 9000 series of quality standards, which according to the International Organisation for Standardisation, "represents a tried and tested framework for taking a systematic approach to managing the organisation's processes so that they can consistently turn out products (and services) that satisfies customer expectations."
In view of the potentially hazardous nature of work that lawyers engage in (and we are not just referring to the lengthy hours involved), a number of law societies have developed similar practice standards for its member firms in order to improve their quality, efficiency and competitiveness. These standards take their origin from generic international quality standards such as the ISO 9000 series but have been refined and tailored to meet the specific needs of legal practices. These practice standards aim to enhance the firm's management of risks that can impact on its provision of legal services to client eg:
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Quality Practice Standard (“QPS”) - Law Society of Western Australia
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Lexcel Scheme - Law Society of England and Wales
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Primelaw - Law Society of Singapore
The benefits of implementing such measures to manage the risks associated with the delivery of quality legal services are both tangible and varied. For example, in the Law Society of England and Wales 2004 Annual Report, it was reported that "Lexcel firms had, on average, 2 open complaints per 10 fee earners, while the non Lexcel firms had 3.5."
[4] This means that Lexcel accredited law firms had at least 40% fewer complaints at the Law Society than other firms. Ultimately, this translates to an overall lower total cost of risk and a positive impact on the bottom line.
Getting Started
There are broad principals and parameters that need to be fulfilled for a firm to be 'quality certified'. For example, the ISO 9001:2008 requires that a firm's quality management system exhibit the following attributes:
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Demonstrates its ability to consistently provide products/services that meet customer and applicable statutory and regulatory requirements, and
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Aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements.
In order for your firm to embark on the quality journey, a simple quality management technique such as the PLAN-DO-CHECK-ACT or PDCA
[5] cycle can be used to improve your firm's quality capabilities:
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Plan - Establish a project plan or initiative to improve the firm's processes and procedures incrementally using a relevant quality framework or practice standard. Identify the project objectives and resources and seek outside advice from regulatory or industry bodies or consultant if necessary. Develop simple processes and relevant documentation (such as feedback sheets, diary schedules and case file logs/registers) to help monitor the process.
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Do - Implement the new process through a pilot project. The implementation should be done on a small scale first to establish 'quick wins' and allow the firm to learn from the experience of implementing a new process. Invest time for the objectives and rationale of the new process to be communicated to the relevant personnel prior to implementation. A rule of thumb to pilot a new process is around three to six months.
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Check - Compare the outcomes to baseline requirements by checking if required processes and procedures have been implemented according to the new initiative. Seek feedback and comments from affected staff members concerning their experience.
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Act - Analyse any implementation gaps and determine the root cause for any issues. Rectify the situation by developing and implementing an improvement action plan. Repeat the process again and gradually expand the scope of new practices to be implemented.
Changing Attitudes
Adopting a prescriptive approach towards change is never going to be easy. Well-intentioned initiatives when enforced solely by prescriptive rules might be viewed as an administrative hassle, which diverts attention from a lawyer's primary fee-earning activities. Thus even with the successful completion of the PDCA cycle mentioned previously, the battle is only half won. Total commitment towards a quality management system requires not only the implementation of policies and procedures, but a change in attitude amongst the firm's employees such that they themselves embrace the change.
For this to happen, strong and visible buy-in from the firm's senior management is of high importance. Clear and consistent messages supported by the firm's senior management leading by example are critical to the success of any enterprise-wide change initiative. The aim is to cultivate a culture of quality and ethical awareness within your firm, such that it increases the ability of an individual to make the right decision in any given circumstances, with or without supervision. As Henry Ford once said, "Quality means doing it right when no one is looking."
Conclusion
Implementing any form of quality management system will invariably require the commitment of effort and resources, though the benefits of doing so would certainly outweigh the initial effort. At the same time, adopting a mindset for continuous improvement is also important so that the firm can strive to improve its quality capabilities as the practice matures such that it becomes second nature. "Quality," as Aristotle said, "is not an act, it is a habit."
Quality processes not only represent another layer of defence to mitigate risk exposures, they also serve to keep clients satisfied in order to keep their patronage. A quality management system that is consistently applied and accepted by your staff will help your law firm achieve a high standard of client continuous improvement communication, training and procedures. Without satisfied customers, the risk of a firm's ability to survive in the long term will become a clear and present danger.
So, don't wait for the unexpected complaint, censure or scandal to threaten your firm's future. Embrace quality as a risk management tool to protect your firm's value now.
[1] “Convicted Lawyer Cleared of Wrong Doing”, The Straits Times (Singapore), 16 July 2010.
[2] “Regulating Law Firm Ethical Infrastructure: An Empirical Assessment of the Potential for Management-Based Regulation of Legal Practises”, Christine Parker, Tahlia Gordon and Steve Mark.
[4] “Independent Commissioner Researches Lexcel”, The Lexcel Team Quarterly Newsletter, The UK Law Society.
[5] The PDCA cycle is an interactive four-step problem solving process used in business process improvement. It was developed by a renowned quality guru named Dr W Edwards Deming.