Piloting Lean Six Sigma for an M&A Transaction

Knowledge Management in the Legal Profession is the subject of the Ark Group’s conference I’m attending in New York City. Here are my notes.

Piloting Lean Six Sigma

Lann Wasson (Senior Manager of Knowledge Management at Husch Blackwell) is presenting how they created a pilot bringing the Lean Six Sigma methodology to a specific M&A transaction. By way of background, this firm is the result of mergers. The resulting need to integrate the staff and practices of the merged teams led to a deep focus on improving workflow. (The firm has a culture that emphasizes continuous improvement. In fact, lawyers in that firm would like to be market leaders with respect to adopting more rational workflows.)

At the beginning of the project, they had to educate themselves on the Lean Six Sigma concepts, tools and techniques. They also had to gain a deep understanding of the process of an asset purchase transaction, as well as the asset purchase agreement (and its related documents).

Their initial goal was to understand the drivers of cost and quality in a typical asset purchase transaction.

Key Questions:

– How important is measurement in the pilot? Is there any useful historical data?
– How to overcome the steep learning curve? What is a cost effective approach to training?

Cost-Effective Training:

– Identify a core reading list (including The Starbucks Experience)
– Iteratively practice with tools and techniques
– Leverage a social network of Lean Six Sigma practitioners
– Develop an in-house legal-centric curriculum over time to train others

Forming the Pilot

– The Team needed members who had experience of the subject transaction
– They elected to act as a “working group” rather than following the purist method of Kaizen event format.
– The elected to adopt a plan-do-check-act (PDCA) approach rather than the define-measure-analyze-improve-control (DMAIC) approach to project management

How they Mapped the Transaction:

– Transaction Planning >> Due Diligence >> Draft Asset Purchase Agreement and Ancillary Documents >> Negotiate Document Terms >> Approve Transaction >> Complete Ancillary Dcouments >> Close Transaction >> Handle Post-Closing Matters.

How KM and Lean Six Sigma Benefit Each Other

– Balance Lean and Six Sigma — “Lean” thinking seems to be more like KM thinking and should be balanced with the project management thinking of Six Sigma.
– Keep technology in perspective — Lean is a low-cost, low-tech, creativity over technology approach. However, law firms are more virtual workspaces than are factories, you must maintain an appropriate level of technology.
– Avoid sub-optimizing a part of the process — Lann Wasson suggests that search may be a sub-optimal approach, the better approach is to focus on process and that in turn will surface the knowledge and resources you need (without resorting to enterprise search).
– Leverage the art of translation — KM folks can be invaluable since they speak the language of lawyers and the language of technology.
– Build from experience and sustain results — knowledge managers who have experience in project management can be hugely helpful (and influential) in an effort like this.