Corporate Legal Operations Institute, May 2017 A technology-first approach can distract us from asking the right questions and solving the right problems. We must start with processes. By designing smart processes, we can increase the efficiency and quality of legal service delivery, generate actionable data, and pave the way for future continuous improvement. We will: • Introduce smart processes for gathering data and improving efficiency, quality, and substantive outcomes; • Use maps as knowledge production and management tools that can also be used for communication and training; and • Discuss how cross-functional alignment and communication between the legal ops team, in-house counsel, and the other departments of the business can be furthered with this approach.

1. Jose Torres
Fellow, Legal Design Lab
Center on the Legal Profession
Stanford Law School
Twitter: @1jftorres
Smart Process Design:
Continuous Improvement to
Leverage the Right Technology
Daniel W. Linna Jr.
Director of LegalRnD -
The Center for Legal Services Innovation
Professor of Law in Residence
Michigan State University College of Law
Twitter: @DanLinna

2. Challenges

3. “
◉How might we leverage technology
without being distracted by technology
“solutions” searching for problems?

4. “
◉How might we leverage legal
operations to improve substantive
legal work and outcomes?

5. “
◉How might we deliver greater value
to the business across the whole value
stream, from beginning to end?

6. How might we integrate efforts for maximum leverage?
Tech

7. “
◉Is technology the
answer?

8. Technology First is a
Problem
“The first rule of any technology used in a
business is that automation applied to an efficient
operation will magnify the efficiency. The second
is that automation applied to an inefficient
operation will magnify the inefficiency.”
– Bill Gates
Source: Lean Ohio, Innovate Before you Automate,
http://lean.ohio.gov/Portals/0/docs/info/LeanOhio_Innovate_Before_You_Automate_july2015.pdf

9. “
◉If tech is not the answer,
then what?

10. Smart Process Design

11. LeanData
KM
Technology
Integrate 4 Areas

12. Lean Thinking

13. Lean Thinking

14. Applying Lean to
Knowledge Work
Can generate significant
benefits, including:
◉ Lower costs
◉ Faster response time
◉ Higher quality and
creativity
◉ Better outcomes
◉ Reduced drudgery
and frustration
◉ Greater job
satisfaction

15. Defining Lean
◉ Lean is getting the most value for the customer
using the least amount of resources with the
shortest overall lead time.
◉ The customer defines value.

16. Applying Lean Thinking –
Step 1
Identify customers and specify value:
◉ End customer;
◉ Every person or activity in a value stream.

17. Applying Lean Thinking –
Step 2
Identify and map the value stream:
◉ What are activities and steps in the process?
◉ What is the sequence and dependencies?
◉ How does information flow?
◉ What is the lead time?

18. The Purpose of Mapping
◉ Compare planned to actual
◉ Establish baseline metrics
◉ Identify opportunities to eliminate
- Waste
- Unevenness
- Overburden
- Complexity

19. M&A Example

20. Contact Law
Firm
M&A PROCESS MAP OVERVIEW
Scope
Services
Document
Engagement
Create
Case
Team
Formation
Deal
Management
Draft
Contract
Negotiate
Contract
Close Deal Due
Diligence

21. Early Due
Diligence
Assessment
Due
Diligence
Request
List
Client
Specific
Queries
Perform
Due
Diligence
Send
Clarifying
Requests
Zoom In - Due Diligence Process
Finish Due
Diligence
Draft the
Report
Use Info for
Negotiation

22. Waste (Muda)
◉ Defective Production
◉ Overproduction
◉ Waiting
◉ Non-used Employee
Talent
Wikipedia, the Free Encyclopedia, Muda, at
http://en.wikipedia.org/wiki/Muda_(Japanese_term)
◉ Transportation
◉ Inventory
◉ Motion
◉ Excessive (Over)
Processing

23. Sources of Waste in Contracts
◉ Reviewing, preparing,
or concluding
contracts;
◉ Obtaining contract
approval;
◉ Tracking due dates for
contract deliverables;
◉ Bottlenecks due to
insufficient personnel and
resources.

24. PDSA – Scientific Approach to
Process Improvement
◉ Plan
◉ Do
◉ Study
◉ Act
Source: The W. Edward Deming Institute,
https://deming.org/management-system/pdsacycle

25. Embedding Data into
the Map

26. Data Analysis Process
Get Data
Explore
Data
Model
Data
Visualize
Results
Use
Results
Use Results
in Business
Business
Application

27. Gathering and Embedding
Data
Example: Due Diligence

28. Why Due Diligence Data
in M&A?
◉ Confirm strategy and transaction fit
◉ Verify operations and assets
◉ Predict and limit inherent acquisition risks
◉ Determine business plan feasibility

29. “
◉ Capture Data at Every Step
of the Process

30. Collecting Structured Data
◉ Checklist
◉ Template
◉ Final Product

31. Early Due
Diligence
Assessment
Due
Diligence
Request List
Client
Specific
Queries
Perform
Due
Diligence
Draft
Report
Capturing Due Diligence Data

32. ABA’s Due Diligence
Checklists

33. Liabilities Dashboard
Environment
Employment.
IP
Litigation

34. Compliance IP Employment Litigation Environment
Deal4
Aggregated DD Data
Deal3
Deal2
Deal1

35. Use Aggregated Data to
Negotiate better deals
Improve contract drafting
Improve compliance
Manage outside counsel better
1
2
3
4
5 Price transactions better

36. Gathering and Embedding
Data
Example: Contract
Performance

37. Draft
Contract
Review
with
Client
Negotiate
Contract
Review
with
Client
Finalize
Contract
Contract Negotiation Process

38. Acquisition Terms Background/Details Comments/Notes
Structure of
Acquisition
- Asset
- Stock
- Merger
Escrow/Holdback
- None
- Escrow
- Holdback
Reps & Warranties USE DD DATA
ABA Drafting Guides

39. 0
1
2
3
4
5
0
1
2
3
4
5
0
2
4
6

40. Compliance IP Employment Litigation Environment
Deal4
Aggregated R&W Contract Data
Deal3
Deal2
Deal1

41. Feed Contract Lifecycle with End-to-End Data
Improve
Contracting
Process
Understand
Contract
Structure
Negotiate
Perform
Gather
Performance
Data
Gather
Litigation
Data

42. Comparing effort vs. value
IACCM Top Terms 2013/2014

43. Use Aggregated Contract Data
To
Better communication with business units
Negotiate better deals
Improve contract drafting
Train attorneys
1
2
3
4
5 Improve external business relationships

44. Continuous Improvement
Issues (disputes, friction)
Contract Performance
Contract Drafting
Negotiation
DD Process

45. Smart Maps =
Knowledge Management

46. Smart Process Map as KM Tool
Preparation
for
Acquisition
Acquisition
Task
Checklist
Initial Deal
Scoping
Discussion
Deal
Management
Discussion
Outline
Deal Issues
Negotiating
Tool
Deal Issues
Drafting
Guide
Early Due
Diligence
Assessment
Deal Kickoff
Meeting
Checklist
Roles and
Responsibilities
Chart
Task Status
Report
Post-Matter
Assessment

47. Capture Data at Every Step

48. Identify Complexity of Work
Standard Standard Bespoke Systematized
Bespoke Packaged Commodity Standard
Standard Bespoke Bespoke

49. Map + Data Captures
Knowledge
◉ Codify repeatable parts of the process;
◉ Framework for continuing study of tacit
work.

50. Choosing the Right Tech

51. Right Technology for each
Step of the Process
◉ Expert systems
◉ Contract review and due diligence tools
◉ Excel + database for templates and checklists
◉ Pave the way for AI

52. Early Due
Diligence
Assessment
Due
Diligence
Request List
Client
Specific
Queries
Perform
Due
Diligence
Draft
Report
Leveraging Tech – Due Diligence
Example
Process
Tech Expert
System
Excel +
Database
Doc
Assembly
Contract
Review
Tools
Expert
System

53. Leveraging Structured Data from Smart Maps
SQL
Expert System
AI
Data Excel

54. UX Software to Prototype
Smart Maps

55. LeanData
KM
Technology
Smart Process
Design

56. Questions?
You can find us at
◉ jftorres@stanford.edu
◉ Twitter: @1jftorres
◉ linnadan@law.msu.edu
◉ Twitter: @DanLinna
Thank you!