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Using Project Management to Identify "Waste" in Arbitration

In May 2013, while I was still working in-house, I was shipped off to project management school for a week. At the time, I remember a lawyer friend asking why they couldn't just hire someone to read Excel sheets for me... Alas, that was not how life was to be, so off I went to Connecticut for a week of learning (which I of course dreaded).

The training program was part of a company-wide initiative to educate employees on how project management could be incorporated into many aspects of the business. I was the only lawyer in my class, and while my colleagues and our teachers were fun and lovely, I believed I had better things to do. As sometimes happens, I was wrong.

It turned out that project management school changed the way I oriented my approach to work - with a heightened focus on being efficient, promoting efficiency and working toward clearly defined goals. Once I returned to the office, after becoming a Certified Project Manager, it no longer seemed sensible, or for that matter possible, to operate without a project management system to reinforce my team's goals and to help us better define our objectives and achieve our goals.

There are different approaches to project management, including Six Sigma, Lean, and a combination thereof. In brief, Six Sigma is often used to study and improve business processes. It offers a framework for problem-solving in a methodical way, which includes five distinct stages: (1) define the problem, (2) measure or map out the current business process, (3) analyze and brainstorm potential solutions/ improvements, (4) make the improvements, and (5) ensure there is a system for communicating changes and monitoring progress.

The Lean approach to project management is slightly different from Six Sigma, in that it focuses on identifying inefficiencies (known as “waste”) and promoting value (in terms of time spent on “value-add” activities).

Combining Lean and Six Sigma approaches together offers an opportunity to streamline processes, promote efficiency and focus on better outcomes. In practice, the two may be folded together, using guidance from Lean to help define the problem and later develop value-add solutions.

These are pretty simplistic explanations of rather complex systems. But for arbitration blog purposes, hopefully sufficient. Now, the arbitration part...

Project management skills are integral to case management. Six Sigma and Lean techniques get to the heart of users' concerns about arbitration. So let’s talk specifically about how a project management framework helps to address these issues.

For commercial arbitration, and specifically the role of the arbitrator as project manager, using project management tools means starting with an analysis of the potential for waste in the arbitration process. According to Lean, there are eight categories of “waste.” (And you thought waste was waste? No.) For our purposes, the most relevant waste categories are over-production, waiting and defects. Each of these categories is listed below with examples of how the concepts may be applied to the arbitration process. For this post, let’s focus on what waste in arbitration may include; my subsequent post will address the development of solutions to these problems through project management techniques.

  • "Over-production" is a reliance on excessive processes or the rendering of more services than is reasonably necessary. This is often one of the biggest party complaints about arbitration – that the process is too lengthy, cumbersome and expensive. The arbitrator is ideally positioned to stem this issue. However, there is also danger in the arbitrator contributing to the problem by not properly managing the process. Even worse, the arbitrator might potentially create more process than is needed.

  • "Waiting" is time wasted. Who do you wait for in arbitration? Well, you often wait for the arbitrator – in addressing issues that arise during the course of the arbitration, for hearing dates, and of course, the award. Overextended panelists who delay hearings and awards are another example of a party concern that the arbitrator is obviously able to prevent.

  • "Defects" are mistakes. What is one of the biggest, and most recurring, mistakes in commercial arbitration cases that the individual arbitrator can proactively address? The faulty arbitration clause is a good example. Flawed drafting (or over-drafting) of the dispute resolution clause can lead to added expense and confusion once the arbitration is underway. Competing or conflicting terms, time requirements that do not meet party needs, and other conditions that may be impossible to achieve in practice are all too common components of arbitration/dispute resolution clauses.

Now what? In a typical project management workflow, once the problems are identified and mapped out, the next step is to develop improvements and then implement them. That’s where I will leave you for now… next time we will run through how to use project management to solve these problems and add value to the arbitration process.


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