One panelist at the InsideCounsel SuperConference was the General Counsel of Johnson Controls, Jerry Okarma. His 55-lawyer legal department has a standardized on-boarding process for lawyers around the world. Otherwise, he said, there would be lots of different understandings. There is a schedule set for what newcomers should do and learn in the first three months, the first six months, and so forth. They have been using this process for the last year and a half and are continually improving it (See my post of Nov. 27, 2005: lawyers don’t coddle – sink or swim; April 27, 2006: on-boarding a new general counsel; Sept. 18, 2006: training program at Citigroup for new hires; May 28, 2007: Human Capital Theory espouses new-hire indoctrination; Jan. 4, 2008: socialization, another term for on-boarding; and April 6, 2008: new-lawyer orientation at GE.).

Okarma also showed his talent development chart. It has a row each for commercial contracts, corporate work, and antitrust. In the columns there were two numbered categories under each of basic, intermediate, and advanced. In other words, each lawyer for each of those three areas of law that were deemed core competencies is rated from one to six, the most advanced level of knowledge. The company also has a leader expectations model which is companywide and applies to the law department.

The General Counsel of LG Electronics spoke at the InsideCounsel SuperConference on May 25 th. I note three of his practices. One is that his lawyers train ad agencies on the basics of intellectual property, such as trademarks and copyrights. His department also prepares a list of trademarks and usage guidelines.

The department produces the quarterly Legal Gazette which goes out to clients. (See my post of July 20, 2009: newsletters by legal departments with 6 references.). http://www.lawdepartmentmanagementblog.com/law_department_management/2009/07/newsletters-produced-by-in-house-legal-groups.html

He also believes strongly that a law department should prepare a business plan with objectives and go through the usual scrutiny all business operating plans are subjected to (See my post of July 26, 2008: InBev’s business plan and speculation on contents; Dec. 29, 2008 #1: difference between a strategic plan and a business plan; Jan. 8, 2009: five-year business plan is a waste of time; Sept. 27, 2009: cascade from enterprise objectives to departmental business plan; and June 25, 2008: strategic plan with 10 references.).

An article several years ago laid out an organizing framework for knowledge in the form of a basic four-cell matrix. Visualize theory and practice as labels for the two rows and content and process as labels for the two columns. This useful table comes from Admin. Sci. Q., March 2003 at 95.

The authors place “organizational learning” at the intersection of theory and process, because that area of study combines theories about how organizations learn and the methods by which organizations encourage learning.

The authors place “learning organization” in the cell for practice and process, because the shift there is toward useful, non-theoretical advances (See my post of Dec. 19, 2005: think of law departments as learning organizations.).

A third cell in the two-by-two framework covers “organizational knowledge,” which they see as combining theory and content. The focus rests not on activities (process) but on the results (knowledge content).

Finally, they place “knowledge management” in the fourth cell, the one where practice and content combine. For legal departments, content is king, not process, and implementation matters, not theory.

With posts here and there about the odds of an internal promotion to the top legal spot compared to a recruitment of a new person to that position, let’s pause to state the shaky reasons why recruitment happens more than it should. More accurately, it happens more than academic researchers suggest it should happen based on CEO succession and the aftermath. These flawed explanations ignore sound reasons such as lack of ability or preparation among the internal contenders or their lack of interest in promotion.

1. The shortcomings of a long-serving Chris in the legal department, ready for prime time, are well known and much chattered about. Chris’s known warts look ugly compared to the unblemished visage of the outside candidate.

2. Change follows from change, doesn’t it? If we want to shake up that slow, over-priced and cantankerous department over-staffed with prima donnas, we need new blood, a modern perspective, a change of pace and face!

3. Really smart lawyers become partners at well-known firms (or stayed and built an impressive practice). The corollary of this misguided view is that legal sharpness should be the primary strength of the new general counsel, not balanced by the ability to motivate, manage, and move a team.

4. It is too hard to visualize in-house veteran Robin as anything bigger than Robin, certainly not dealing with the Board, handling corporate crises, making the tough legal calls. It’s easier to assume broad abilities of the unknown candidate than to attribute growth and capability of a person who has long been slotted in a role.

5. Internal politics stymies the internal candidate. Powerful business unit President A likes Jean but powerful business unit President B doesn’t want a lackey of A to rise to the top of the legal pile. In the competition to be the next CEO, never strengthen your opponent!

6. Executive recruiters make wads of money if the company plucks its new general counsel from elsewhere, but that wouldn’t influence their advice, would it?

It would be an easy matter, technically, to log all calls made by a lawyer to a client within the company and all intra-company calls from clients to the lawyer. This recording would disregard all content, storing and aggregating only the people at either end and the duration of the calls. Since many lawyers spend much of their day on the phone, this unobtrusive tracking mechanism could substitute for some of the information laboriously (and often erroneously) secured from recording time (See my post of July 12, 2010: sloppiness in time tracking by outside counsel.).

I have already written about construction of a client-contact network (See my post of May 11, 2010: network metapost). If, then, in addition to modest tracking of phone traffic, client meetings were the subject of time recording, I believe there would be a quite full picture – and an accurate contemporaneous picture at that – of what an in-house lawyer does. Stated differently, three different techniques should substitute quite well for the onerous task of retroactive remembering.

Tim Corcoran, who recently left Altman Weil to join HubbardOne, posted a meaty piece on what he reads. In the midst were four blogs related to legal departments, including those of the ACC and Law.com. Third, Tim brought to my attention a new one for me and I quote his description.

In House Rants – written by an anonymous corporate lawyer, he or she shares frustrations with outside lawyers and their reportedly poor service and business skills. I very nearly deleted this because the author is sporadic and at times not very constructive… but then the title should have been a clue!

Modesty does not stop me from quoting him on the fourth: “the gold standard in providing information to the in-house community, Rees Morrison offers a tremendous volume of insight from book reviews, to critical analysis of surveys and products, to thoughtful discussion of metrics and other operational issues for General Counsel.”

Muchas gracias, Tim.

The General Counsel of LG Electronics spoke at the InsideCounsel Super Conference on May 25 th. The subsidiary he serves racks up $6 billion in sales yet has only five lawyers. He said there was no headquarters legal group so they are actually stand alone. It was his outline of how they handle an enormous volume of contracts that motivated me to write.

His group turned out about 1,200 contracts in the past year and he commented on how they did that. One, they make sure all contracts are signed. Two, they have the legal department review all contracts signed by the company. Three, they’ve created standard terms and conditions for the purchase orders used by the company. Four, they have clearly defined the boundary of what transactions require a contract and what may be done by purchase order. The law department decides whether to deal requires a contract or purchase order. Five, the legal department keeps a database of signed contracts and tracks their status. They also use this database to report on workflow that they’ve accomplished. Six, they store and retrieve both physically and electronically all contracts.

I culled the ideas, and much of the phrasing, of what follows from an email message dated Aug. 16th from ValueNotes. In the last four to five years, the Philippines has emerged as a leading LPO destination, second only to India. LPO vendors from India are setting up centers in the Philippines to provide legal services to law firms in the United States, the United Kingdom and Canada, including Integreon, SPi, ACT Litigation Services, and Adec Solutions.

Local LPOs have also emerged, including LPO Manila Inc, LegalNetwork Philippines, and K&C LPO Services (See my post of June 17, 2009: observation that the Philippines only has 50,000 registered lawyers; and Sept. 18, 2006: DuPont’s use of 30 Filipino attorneys.).

“Organizational routines can be defined as repetitive, recognizable patterns of interdependent actions, carried out by multiple actors.” This definition, from Admin. Sci. Q., March 2003 at 95, seems very close to the ones I have fashioned for the term “processes” (See my post of April 27, 2006: “A process is a series of related activities repeated to achieve an understood goal”; May 1, 2006: “a series of related actions that have been done before to achieve a similar end”; and April 25, 2009: no operational distinction between policies, procedures, processes, and practices – “step-by-step repeated activities; some of them spelled out in a procedure, but most un-memorialized”.). The authors note that organizational routines may be documented with a set of formal procedures or rules, but that is not an essential part of the core definition.

What stands out in the academic’s definition, admittedly of organizational routines, which many not be the same thing as organizational processes, is interdependency and multiple actors. I am not sure either of those components necessarily limit how we should conceptualize processes in legal departments.

Back in March of 2008, the ACLA/CLANZ Legal Department Benchmarking Report 2008 delivered the results of a survey of more than 125 companies and government agencies that together spend over a billion Australian dollars on lawyers each year. The report was commissioned by the Australian Corporate Lawyers Association (ACLA) and Corporate Lawyers Association of New Zealand (CLANZ).

Two and a half years later, the same survey covers 150 participants who together spend over Australian $2 billion on legal costs annually. Both of these facts come from Legal Fuel at the Wellington Scoop.

In other words, participation in the bi-annual survey climbed 20 percent while the legal spend close to doubled. It is also interesting to me that government agencies figure so prominently in the survey. That is uncommon in the benchmark surveys done in the United States.