BEST VALUE :

PRODUCTIVITY & PERFORMANCE IN

LOCAL AUTHORITY LEGAL DEPARTMENTS

 

Introduction

 

This article outlines how Bolton MBC has tackled productivity issues in the provision of high quality cost effective and efficient in-house legal services. Bolton Metro Legal Service’s experiences with regard to customer involvement, quality improvements and benchmarking are explained in other articles in this publication. This particular article should, therefore, be read in conjunction with and not in isolation of those articles if a holistic approach to Best Value in local government legal services is to be assured.

 

In terms of the wider context, the point should also be made that the best in local government legal services is equal to or better than the best lawyer working in private practice. Where in-house lawyers fall down, however, is that we are invariably judged not by that best minority but by the vast majority of local government lawyers. The image and perception of the vast majority is, of course, not so complimentary and in-house lawyers must, therefore, address issues like quality, productivity and performance if the image and perception of local government lawyers is to be improved. This article seeks to assist lawyer managers in tackling some of those productivity and performance issues.

 

Understanding Productivity & Performance

 

2The starting point to improving productivity and performance, of course, is to understand what they are and where the in-house legal services departments are with regard to such matters. Having so identified, appropriate action plans can then be put in place to address poor / lack of productivity and performance over a predetermined timescale with adequate resources, strategies, procedures, systems and processes.

 

As part of Bolton Metro Legal Services’ CCT preparations (some 2 / 3 years ago), the division clearly needed, inter alia, to know:

 

The approach adopted

 

A thorough productivity analysis and performance review of the division was carried out with regard to the above factors. This approach was tremendously assisted and made easier by accurate time recording computer system (bar codes and light pens were introduced for all fee-earners in 1994: Smith & Co system) and cost centre management information. By adopting a more business like approach to all aspects clearly helped the division meet tight CCT timescales. The objective of the exercise was not, however, only to win the CCT contract but also to ensure that we could deliver and continuously improve in all areas of service delivery, not just those caught by CCT. Accordingly, a mixed bag of legal activities was exposed to CCT with quality and cost performance guaranteed for the clients as a whole through a great number of unit priced items and a limited number of hourly rated items.

 

Clearly, the above could not be done on the back of a fag packet. New Excel spreadsheets were devised and ‘what if’ scenarios carried out to ascertain appropriate sensitivity analysis of price / quality matters. Combined with experience and professional judgments of staff and senior lawyers, the length of time particular unit priced cases should take and the most appropriate level etc at which such matters should be dealt with was determined. The attached slides provide further details on the approach adopted.

 

The playing field was also made more interesting with a local political desire to devolve, with effect from April 1996, 80% of the division’s budgets to client departments regardless of CCT! 20% being retained for corporate / cross committee / strategic legal work.

 

The results

 

Having identified the appropriate tasks and carried out an analysis of the competitiveness of the same with regard to potential private sector rates and quality (by the use of an external consultant - William Newbold), appropriate staffing levels could, after allowing for potential peaks and troughs and future flexibility, be determined. Appropriate local protection of employment policies and staff / union consultations were also implemented to address any reductions in staffing requirements and movement of staff to address the changing needs of the organisation.

 

The fundamental service review, therefore, helped to identify productivity and performance gaps vis-à-vis potential private competitors. Having identified the same, appropriate strategies were adopted to tackle the same. It is clear that had the CCT pressure not been there, some of those issues may never have been addressed. Without the threat of real competition, therefore, the author is convinced that some Councils may still adopt (or be forced to adopt by their unions) a ‘soft’ touch to poor / bad productivity.

 

In terms of determining the appropriate staffing structure, realistic and achievable performance targets have to be set and continuously improved upon in terms of chargeable hours for fee-earners, supervisors, managers and support staff. The attached slides also provide worked examples on some of these issues with specific regard to:

    1. calculating the appropriate charge hours (allowing for sufficient downtime / flexibility);
    2. determining appropriate work / time projections and total staff required; and
    3. determining appropriate staffing structure based upon such calculations and productivity analysis.

 

Performance management

 

Having identified the ‘inputs’ does not mean that one stops there. The work ‘output’, ‘outcomes’ and productivity have to match (if not continuously outperform) the inputs to produce a ‘profit / surplus’ for the division, which the division could then utilise for further service improvements and other enhancements (e.g. IT developments to increase further work productivity and performance). In recovering the budget inputs there are, of course, various choices available.

 

In order to ensure a ‘break-even’ position, the pursuit of a positive profit / surplus position is a must since, by the very nature of legal work, total predictability of the work projections cannot be relied upon. By equal merit, if the work is actually less than that projected, managers must be prepared to take appropriate action to tackle over staffing. Gone are the days where non-performing staff could be ‘hidden’.

 

Individual staff performance to targets and quality improvements, therefore, become more important. Those who fail to perform also become ‘visible’ and are perceived by their peers as letting the division down. ‘Pulling one’s weight’ becomes more real since individual failure to perform can lead to divisional failure. This aspect helps to engender a performance culture where staff have more ‘stake in the business’ as real staff performance is also rewarded by the positive use of any profit / surplus.

 

Appropriate management information systems and processes will also need to be developed to support, measure and track, for example, the various work performances, individual staff performance, quality aspects and income recovery positions. The same would also need to be continuously monitored and reviewed so as to ensure continuous effectiveness of the same and so that the primary focus of the business remains on service improvements and not the systems to ensure the same.

 

Performance review

 

At the end of the year, actual performance with the projected performance can also be easily carried out if regular monthly monitoring is adopted. Enhanced or reduced productivity with regard to, for example, chargeable hours and number of matters completed will be evident and action can be taken quickly to address the increase or reduction, as appropriate.

 

Actual performance on unit priced items will be particularly interesting to watch, as that may be the emerging barometer of continuing or potentially reducing staff performance in the future. Actual volumes of work matters and the levels at which they are being carried out can also act as a barometer in how the ‘market’ for certain matters is rising, stable or falling. Based upon such trend analyses, appropriate action can be planned by the division for the emerging future. The annual review of actual performance can also be used to review the appropriateness of staffing levels and the skills / core competencies within the division required for that future. Further training & development of staff can then be planned, extra resources sought or current resources shifted within the division for that future.

 

Performance shift

 

Shifting the business emphasis from ‘watching budget expenditure’ to ‘bringing in the income’ also sharpens the business performance culture. Activities that do not add real value begin to be questioned and if legal staff need not carry out some activity, client staff can be trained to deliver the same (if necessary). A shift in focus towards ‘empowering the client’ to recognise the division’s value adding aspects, therefore, also becomes evident as opposed to the culture of dependence.

 

This shifting of focus towards the client is further escalated by the devolvement of 80% of legal budgets to them and by allowing them the freedom to buy in (after due consultation with the division) legal services from appropriate external sources. Letting clients determine what they want, at what quality, at what cost and by when, also helps clients to reassess what their needs are (after due consultation) and to resource accordingly. In the process clients also begin to make real judgements about what they value (and what they do not!) from their in-house legal services division. Further adding pressure on managers and staff that fail to perform.

 

This shift is also reinforced and strengthened by a client desire to ‘unit price’ most things and to question the hourly rated matters. Concentrating on quality and performance, therefore, becomes a common objective amongst service providers and service consumers in ensuring the best value service to the wider community. Poor performance becomes unacceptable and can not remain hidden for long. The developing ‘Best Value’ framework should also assist Councils to focus outwards in the pursuit of service excellence instead of concentrating on inwardly focussed processes that may have little relevance to the outside world or were established without the ultimate customer in mind.

 

Managing clients and staff

 

In light of the shifts identified above, successfully managing the client and staff interfaces become increasingly important. Clients have a legitimate expectation with regard to divisional information in terms of budgets, quality and work performance carried out on their behalf. Staff also need to know divisional (and personal) performance with a view to ensuring their own job security.

 

A strategy on the regular sharing of appropriate information with clients and staff, therefore, becomes imperative. Combined with regular customer quality feedback, the client can clearly see performance increases over time. In those areas where there is no improvement, at least, the legal services manager is suitable prepared to explain why there has been no improvement or what action is being taken (or proposed) to address the ‘problem’ either individually or collectively with the client department.

 

Appropriate training and development can help tackle some lack of staff performance. Other strategies to emphasise a culture of continuous improvements and high quality performance include:

  1. ‘rewarding’ and encouraging innovation and positive behaviour;
  2. ‘building in quality’ by recruiting the right external (or internal) candidates;
  3. appointing and developing the right person to senior positions within the division;
  4. ensuring appropriate I.T. and other systems, processes, procedures and systems (e.g. ISO 9001) are in place; and
  5. positively tackling sickness absence, poor performance and other unacceptable behaviour.

 

Concluding remarks

 

It is important to recognise that cultural change does not take place in a vacuum or overnight. Many years of ‘unlearning’ and new forms of learning have to take place together before the ‘old ways’ are no longer used. That does not, however, mean that the ‘old ways’ die. If you scratch the surface you will, undoubtedly, discover the negative forces against progress just below the surface! A positive commitment and long term attitude to the management of change is, therefore, essential for success.

 

CCT, of course, helped to provide that focus for Bolton Metro Legal Services. Whether ‘Best Value’ will provide an equal impetus for further change, only time will judge. Experience shows that progress is slow when there is no competition. Unless, legal divisions take ‘Best Value’ seriously and adapt before being pushed, therefore, they may find themselves serving an organisation that they could not keep up with. This is a most dangerous position to be in! Nature, countries and societies are full of examples of extinct creatures, organisations and individuals that failed to adapt quickly.

 

Mr Mirza F.N. Ahmad, MBA, Barrister,

Chairman, Bar Association for Local Government & the Public Service,

Assistant Director (Legal), Bolton MBC.

(The views are his own and not those of the Bar Association or his employer).

November 1998


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