Litigators

Applying Lessons From 'The Goal' To Law Firm Life

Don’t be a bottleneck.

By Matthew W. Schmidt  
on

Seventy-one years ago tomorrow, Eliyahu Goldratt was born. Thirty-seven years later, Goldratt, then an Israeli physicist, wrote The Goal, probably the most famous management book of all time. In business school, they made us split into teams to play games based on its teachings. Jeff Bezos makes his executives participate in book clubs on it. My colleagues have probably, like me, read it multiple times.

The Goal — which is structured as a novel, making it something like the In Cold Blood of management books — tells the story of Alex Rogo, a plant manager for the ambiguously industried UniCo Manufacturing. As the story starts, Rogo’s boss, division vice president Bill Peach, arrives at Rogo’s office unexpectedly one morning and gives him a three-month deadline to turn around his failing plant before it’s shut down.

As luck would have it, Rogo soon runs into Jonah, his old physics professor and now a jet-setting management guru author surrogate, at an O’Hare airline lounge. Jonah becomes a mentor to Rogo, albeit often a long-distance one due to his punishing consulting schedule. With Jonah’s assistance, Rogo ultimately saves the plant and is promoted to Bill Peach’s old job running the division. Along the way, Jonah Socratically teaches Rogo many lessons, and Rogo learns some more on his own — like The Brothers Karamazov, The Goal contains multitudes; my old copy is again riddled with bookmarks from rereading it before writing this column — but Jonah’s most important lesson is the theory of constraints.

The theory of constraints is based on the extremely-obvious-in-hindsight idea that organizations are limited in achieving their goal (in the case of a company, making money) by one of more constraints, and that the way to move closer to the goal is to focus on those constraints. In other words, the constraint is the bottleneck to the whole process, and nothing else matters. If you can make a thousand widgets in an hour but only have five widget boxes, you’re only shipping five widgets, and nothing you do that doesn’t get you more widget boxes will change that.

Rogo eventually breaks the system down into five steps:

  1. Identify the constraints.
  2. Decide how to exploit the constraints by maximizing their output.
  3. Subordinate everything else to the constraint and its exploitation.
  4. Elevate the capacity of the system’s constraints, such as by adding more of the constrained resource.
  5. If the above steps break a constraint (creating a new constraint), return to Step 1.

These steps are, naturally, at their most intuitive in a manufacturing plant. First, Rogo identifies that one of the constraints at his plant is a specific machine, the NCX-10. Second, he exploits the bottleneck by making sure that it is utilized at all times, instead of sitting idle while workers get lunch. Third, he subordinates all else to the constraint by prioritizing the NCX-10’s input, even if it means that other machines sit idle. Fourth, he elevates the constraints by bringing in some old, less efficient machines to assist the NCX-10  (he doesn’t have the budget for a new one).

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At the end of The Goal, however, as Rogo prepares to run an entire division of UniCo, he realizes that the steps also apply to all constraints, such as insufficient market demand, bad policies, and the wrong incentives. The Goal is universal.

THE FIRST STEP IN APPLYING THE GOAL TO YOUR LIFE

             Law firms, of course, also have constraints, and they often roughly correspond with seniority. It’s usually easy to throw lots of juniors at any problem, especially if they don’t need much familiarity with the case. The time of mid-levels and seniors, especially ones who know the case well, is usually much scarcer. This structure is by design. It’s much better for clients if you delegate any work that you don’t need to do yourself to lower-cost timekeepers. And as a firm, having excess senior capacity is more expensive than excess junior capacity.

But this also means that, while the exact constraints move around (since a law firm is like a manufacturing plant that has to constantly rearrange its equipment to produce different things), they’re usually a more junior person waiting for a more senior person to review, approve, or edit something. And due in part to the management failures of lawyers generally, this often causes inefficiencies, especially in young lawyers who find themselves managing others for the first time.

Put simply: Don’t hold things up. If you are notice that you are a constraint, then do everything you can to maximize your relevant output. Do what people are waiting on now, then you can get back to that thing your writing after they go home. This is, like many of The Goal’s teachings, something that seems maddeningly obvious before you realize how often you don’t follow it. We all have our own things that we need to do, and no one likes being interrupted by random questions or tasks when they’re in the middle of something else. But very often, if you put off the random question or task, it’s going to mean someone else is waiting around. Sure, some waiting around is unavoidable (another of The Goal’s lessons), but in many situations it’s both bad and simple to avoid.

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So next time that you notice you’re holding things up, ask yourself what you can do to improve the situation. Even better, be proactive and ask yourself periodically whether you’re holding anything up. You may find more often than you think that you can improve things.

APPLY THE GOAL TO EVERY ASPECT OF YOUR LIFE

Not holding things up is, of course, only the first step in embracing The Goal. Your firm has constraints beyond people being slow at turning documents, just as Rogo eventually realized that his own constraints went much deeper than a single machine. So after you take that first step, read your copy of The Goal again, and start taking a look at other constraints.

Matthew W Schmidt Balestriere FarielloMatthew W. Schmidt has represented and counseled clients at all stages of litigation and in numerous matters including insider trading, fiduciary duty, antitrust law, and civil RICO. He is of counsel at the trial and investigations law firm Balestriere Fariello in New York, where he and his colleagues represent domestic and international clients in litigation, arbitration, appeals, and investigations. You can reach him by email at matthew.w.schmidt@balestrierefariello.com.

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