Dispute Avoidance – The Holy Grail of Continuous Improvement

This blog will discuss the final step in my model for a law department continuous improvement program. As a brief review, the model consists of four phases:

CIPcycle-Step-4Phase 1 – The General Counsel Dashboard – as described in my blog post of February 19, 2015.

Phase 2 – Lifecycle Playbooks – as described in my blog post of March 5, 2015.

Phase 3 – Financial Management – as described in my blog posts of March 19 and April 2, 2015.

Phase 4 – Compliance and Dispute Avoidance – as described in this blog post.

If a law department follows the steps in the continuous improvement program described herein, I guarantee all stakeholders will benefit.

Compliance and Dispute Avoidance – The Culmination of a Continuous Improvement Program

I have performed Return on Investment analyses for many law departments. Companies can generate savings in a variety of ways – asking outside counsel for budgets, implementing alternative fee arrangements, and / or providing outside counsel with historical information on similar cases when being assigned a new matter. Taking steps such as these will lead to percentage savings typically in the single digits. However, the single biggest payback in every analysis I have performed comes from avoiding disputes in the first place. Savings in this category are in the neighborhood of 20% on average.

In order to avoid disputes, the law department must first know the root causes of the problems encountered by their company. Then, the law department must take action to address the problem. Two examples of law departments that had outstanding success in identifying a significant problem, taking action to fix the problem, and thereby avoiding the problem going forward can be seen in the stories of KONE Elevators and Walmart Stores.

In the case of KONE Elevators, they were able to have their retail customers change the layout of their stores to avoid accidents because they had the data to make their case. More information about how KONE did this can be found here.

Walmart Stores was able to avoid a significant number of accidents in their stores by having one of their vendors change its product packaging. Please refer here to see the details on how Walmart was able to have its vendor adapt its packaging.

As you can see in the stories of KONE and Walmart, they both followed the same simple formula:

  • They analyzed their claims data. Although both customers used Lawtrac to manage their claims, by no means is Lawtrac the only way to do the analysis. It could literally be done with a spreadsheet, but a matter management system does make the data collection and analysis much easier.
  • They developed a plan of action. KONE met with their customer. Walmart worked with their vendor. The key is they both had the data to back up their assertions, and as a result received the buy-in they needed to implement their plans.

There is no magic involved. It can be done by any law department looking to make a positive impact on their company’s bottom line. Congratulations if you currently have processes in place to avoid disputes. If you do not, I hope this post has given you some ideas as to how you can implement the process in your department.

 

 

 

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