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In November 1998, the Eastman Kodak legal department in Western Europe, having then ten lawyers in four countries, introduced a new structure. A three-page summary of the changes included such measures as creating “horizontal” teams by the six E-K business units, rather than continuing with national lawyers handling national legal work across business units. Additionally, the combined department agreed a single European budget, decided to charge time back to clients (once the accounting system permitted tracking time), and committed to provide additional client training and information.
What caught my eye, however, was one statement: “We now insist that all of our lawyers have or are actively learning a second language. Any new lawyers taken on will have to be truly European lawyers, either qualified in or with experience in more than one jurisdiction…” The bi-lingual goal makes complete sense, as does the desire to eschew expats from the US. Most legal groups in Europe could consider adopting the same requirements.
At a retreat for a multinational’s law department, I learned of two law departments that followed a two-part service standard: (1) acknowledge all calls from clients within 24 hours and (2) if any document or advice slips behind schedule more than 24 hours, call the client My client adopted this practice.
Responsiveness and updating certainly boost client satisfaction. Embracing a measurable standard for both those actions gives lawyers a tangible yardstick. I like the idea and endorse it; a phone call takes little time, and clients will think better of you and your department if you reply promptly and tell them if there is going to be a delay.
To be a corporate lawyer is to belong to teams – product development, lobbying, large-scale litigation, acquisitions, strategic planning, IP review, and many others.
What commonly trips up teams? Here are seven ways teams stumble, according to Interaction Associates:
- Not knowing what the team is supposed to accomplish
- Having unclear roles among the members
- Juggling too many ideas or issues simultaneously
- Lacking a clear process for managing the team’s discussions
- Paying more attention to disagreements than to what the members agree on
- Members not saying what’s really on their minds
- Forgetting previous agreements on topics and procedure
In short, law department members of effective teams know their purpose and individual roles, they follow constructive procedures to get there, and they have the right skills and level of trust.
I reject Weserman’s main title. Corporate counsel make decisions every hour that change how the law department operates – they manage. Those decisions range from asinine to sublime, because of their consequences to quality, productivity, cost, client satisfaction, and personnel. A few lawyers make progressive, defensible management decisions most of the time; many make good decisions some of the time; some have tin ears for the tunes of good management.
Managing legal departments is not herding cats. It is not an oxymoron. Managing a law department is a set of skills, values, perspectives, and intuitions that most people can improve, understand and apply with at least a modicum of skill.
Ed Weserman’s title, catchy and ironic to be sure, irritates me. Described in a book review as having “vast experience consulting to diverse law practices,” Weserman’s new book announces in its (self-contradictory) sub-title that it takes on “tough issues for law firm managing partners and administrators.” [www.authorhouse.com/bookstore]
During a recent web conference hosted by Foley & Lardner, Litigation Counsel of Cummins, Miguel Rivera, shared his experiences with budgeting. Cummins has selected regional counsel, one counsel for each of 12 regions, and their relationship partners sit each quarter with Rivera and the Cummins lawyer responsible for the firm’s cases. The firm breaks the budget for each case it is handling into phases.
Quarterly revisions together with face-to-face meetings keep the budget period to a reasonably predictable and manageable length. Law departments shouldn’t expect semi-annual budgets, let alone annual budgets, to shed much light on reality. Keep budgets to the foreseeable, near-term future – quarterly makes good sense – and you will stay on the road to cost-control success
If there were some way to state numerically the power of computers as used by a skilled lawyer in, say, word processing, searching databases, and e-mailing; and if we could find a representative sample of corporate counsel and test their actual use of their laptops and desktops against that potential power, the results would be woeful. Perhaps 20% of the capabilities are used?
Lawyers barely scratch the surface of what accomplished users – not experts, just lawyers who have learned how to make the most out of a program such as Word, Excel, or Outlook – can perform. Powerful ways of working languish (think of macros, search and replace, and pivot tables); productivity-boosting tricks and approaches remain undiscovered or unused (think of tables of contents, grammar checkers, and graphs); computer firepower that is expensive to train and maintain, protect from hackers and spam, and troll through for discoverable material, gathers dust.
Law departments maintain F-16s for the bi-weekly crop dusting of Mom’s tomatoes
A fascinating article highlighted three common ways groups of fail to interpret information. Translated into the law department’s world, these information failures help us understand why law departments might ignore or devalue indications – signals – of serious problems [46 MIT Sloan Mgt. Rev., Spring 2005, pg 5].
Signals are not seen as warnings because they are consistent with a law department’s beliefs and aspirations. For example, if a department prides itself on hard-ball litigation tactics, its belief in them and its desire to scorch the plaintiff’s earth could blind it to signals about higher costs, longer cycle times for law suits, a more aggressive plaintiff’s bar, and negative publicity.
Warning signals are noticed but the general counsel and senior lawyers do not act on them. A law department might lose several A players, lag on employee morale surveys, rumble with wide-spread discontent during annual reviews, and hear from the HR person supporting the department about continuing tensions. If senior management of the department does nothing based on these information signals of, a serious condition will worsen.
Managers of the department each have partial information and solipsistic interpretations, so no one has a holistic view of the problem. For instance, several business unit GCs know that their groups are spending too much on temporary paralegals and admins, but these lawyers don’t share a collective view of this data, which would confirm the department-wide problem of understaffing.
The study of knowledge management techniques discussed in my recent posting followed a research methodology I wish someone could duplicate with outside counsel cost-control methods.
Ask a varied group of corporate counsel about cost reduction methods they have used recently, then use the list that produces in a survey of a larger group. Ask the larger group to determine their familiarity and satisfaction with the methods. Rank the methods according to the survey results and then, in a more difficult step, control for such factors as the number of lawyers in departments that give particular rankings and the resources committed to the method.
Ultimately, calculating the effectiveness of any particular cost management tool must balance measuring the popularity of the tool (how often lawyers in-house draw upon it) with measuring results (how the same lawyers say the tool has contributed to reining in costs – ideally demonstrated with spending metrics. The next methodological step would be to conduct what the researchers describe as a causal analysis, to show the degree of causation between methods and money: do the methods reduce spending and by how much.
A recent study of knowledge management during new product development identified 14 techniques [46 MIT Sloan Mgt. Rev., Spring 2005, pg 5]. Each technique has something to contribute when law departments want to learn and share the learning more effectively.
The 10 highest-rated methods for sharing knowledge were, in order:
- “informal events,
- experience workshops [team reviews of completed projects, aka post mortems],
- communities of practice,
- project briefings (knowledge transfer prior to beginning new projects),
- expert interviews,
- best-practice cases,
- knowledge brokering (third parties connecting knowledge seekers to knowledge sources),
- experience reports (documenting positive and negative experiences on projects),
- databases, and
- professional research services.”
Practices with lower satisfaction rankings, as determined by the survey of 356 engineers and others involved in 94 projects as well as a workshop attended by representatives from 33 companies, included electronic discussion forums, storytelling, and knowledge maps.
For much more on legal knowledge management, see Joy London’s excellent blog, Excited Utterances.
Many companies do business with legal departments. Think of software licensors, consultants (as Chair of the Association of Consultants to Law Departments I found more than 100 law department consultants), jury research firms, legal researchers, compliance program vendors, copy services, deposition transcript companies, equipment manufacturers and lessors, stationers, and endlessly more.
My ruminations, however, have to do with the number of those vendors and their revenue that comes directly from law departments. I added “directly” because law departments are certainly paying many of these vendors as disbursements or pass-through from law firms. About ten percent of a typical law firm invoice goes to expenses.
Might law departments spend on the cottage industries five percent of what they pay law firms? If so, a ten lawyer department, spending 60 percent of its total budget on law firms, would spend on the order of $5 million on outside counsel, of which 5 percent to the cottage firms would be $250,000.
