After coding each billing entry as value-added
or non-, Heico was able to calculate each firm’s
“Legal Cycle Efficiency,” ultimately measuring
the value of work provided by each firm.
“Our understanding of ‘value’ was anecdotal
until we had the data,” says Walther. “It had
previously been a very unfulfilling discussion.
Now we could assess productivity.”
Heico determined that the efficiency rate for
Shook, Hardy & Bacon was 79 percent, the
highest of any of its law firms, and that the
value the company was receiving per hour
(based on their adjusted hourly rates) was also
highest from Shook.
“This was our first foray into attempting to
measure efficiency,” says Paul Williams, partner
at Shook, Hardy & Bacon. “It was a creative
and analytical measuring stick, and presented
us with a fantastic opportunity to partner.
We have learned much from their process
Client and firm then partnered to improve
Shook’s efficiency rate further. Its elements
included attorney secondments to increase
Shook’s knowledge of Heico’s business and
priorities. Shook associate Brandon Gutshall
worked at Heico during the summer of 2014:
“It was great to see those principles in practice,
and I learned a lot that I could take back to
With Shook’s focused efforts to provide
only value-added services, its efficiency rate
improved from 79 percent to 88 percent over
the second half of 2014. Practical case results
have exceeded the parties’ expectations. In
seven months, Shook resolved six Heico cases,
including four wrongful death cases, with zero
dollars paid in settlement, much shorter cycle
times, and lower costs. Time to resolve cases
dropped from 600 days to approximately
100 days, and savings from minimizing non-value-added work are projected to be at least
Williams says that Shook has taken much
away from the arrangement besides a strong
partnership and steady work. “We’ve been
inspired to explore implementing similar
standards with other clients,” he says.
Walther says he drew inspiration from the ACC
Value Challenge and from past value champions
(including his own prior law firm, Perkins Coie
LLP), but that he was surprised by the extent to
which many of the firms had difficulty grasping
what Heico was trying to do. “They are still
focused on realization rate,” he says. “That is
such a curious metric to focus on with me, the
client. We were sharing what we care about; it
blew my mind.
“A key takeaway for me has been that the
blended rate has been a focus as firms push
work down,” he continues. “Our analysis
showed that that’s not always the best
approach. The real value is in leveraging
expertise and experience appropriately.
Sometimes the experienced partner will be the
right choice, even at the higher billing rate.”
This partnership applied traditional operations concepts to
the legal context and thought about how the concept of waste
applies to legal work.