« March 2005 |
Main
| May 2005 »
Recent research has found that “lawyer compensation and client billing practices are inextricably connected.” This quote from a brief summary of a paper presented by Huseyin Leblebici (Univ. of Illinois, Champaign Urbana) at a 2003 conference run by the Clifford Chance Centre for the Management of Professional Services Firms (Said Business School, Oxford – www.sbs.ox.ac.uk), points us to a little discussed tactic.
If you want to change the billing culture of one of your law firms, you must grapple with the way the firm compensates its partners and associates. I have not heard of a law department that peered this far into the bowels of billing (although I know of a pharmaceutical company that toyed with limiting the profit margin of its primary law firms), but the quest makes sense. If, for example, the distribution of a partner depends mostly on individual fees collected, a law department stands little chance of setting up fixed fee arrangements with that partner, for the reason that they emphasize profitability, not profligacy.
One of the most effective ways to encourage participation at a large meeting, such as a Town Hall or a retreat, is to use electronic voting pads and software. With it, those who attend can vote anonymously and see results instantaneously. (I have teamed several times with Express Interactive Solutions.)
For example, at one retreat I facilitated several years ago, we asked the lawyers put themselves in the shoes of their clients. They considered ten traits of Legal Team effectiveness, and used voting pads to vote on how important they thought clients would think those traits were. We compared those scores to what the lawyers thought of the Legal Team’s performance on them. [For more on retreats, see my March 31, 2005 post on Morrison’s Rule of Three.]
If you want to take a look at examples of questionnaires and survey instruments that collect feedback on morale and satisfaction, visit SurveyConsole. It offers dozens of templates and much more information about these tools.
Clients are more likely to be asked their opinions than employees of the law department [See my post on this point of March 31, 2005], but I even know one large law department that broke new ground. Its administrative function, which consisted of nearly a dozen people, surveyed the law department about how they rated the function. Those ratings over the years helped fashion bonuses within the administrative group and helped the group set objectives.
“The Law Department must review and initial all contracts!” More likely, the bureaucrat announcing this retrograde edict would lurk behind the passive: “All contracts shall be reviewed and initialed by the Law Department!”
Regardless of writing style, the mandate perverts the role of the in-house lawyers. It casts them as final judges on business terms, instead of legal representations and risks, which propels integration of lawyers into the business too far. It forces lawyers into the role of police, holding up their hand and saying to executives: “Stop!” It floods the department with stultifying make-work when the vending machine rental agreement has to have a lawyer’s X. It inevitably spawns criticism of delay, that “legal is a black hole where the contract goes in and nothing comes out.” It leads law departments to invest in databases for tracking and controlling contracts. And mandatory contract approval hobbles other counseling that adds more value – the urgent drives out the important.
Better to set guidelines for law departments to review contracts selectively, such as by type, by vendor, by dollar amount committed, by level of approving business executive, or some combination of these risk factors. A company should apply its legal resources, inside and outside, to the activities that bring the most return, not rigidly decree an across-the-board standard that perverts the attorney-client relationship. [See also my post of March 18, 2005 on whether the law department should manage contracts.]
A widely applied psychometric test is usually widely known as Myers-Briggs. (I am an ENTJ, if you want to know.) Understanding style differences can help managers significantly.
I do not know whether data exists to compare MBTI (Type Instrument) scores of private practitioners to those of in-house attorneys. But research has been published about generic lawyers’ scores. How do lawyers compare to other adults in the United States?
Here is some data from cherylstephens.com/professional/ABA-MBTIcharts.pdf.
- 75% of adults prefer Extraversion, whereas 43% of lawyers do
- 70% of adults prefer Sensing, 57% of lawyers.
- 60% of men and 35% of women prefer Thinking over Feeling (remember, these are not evaluative terms, they are descriptive). Of lawyers, 81% of the males and 61% of the females prefer the Thinking style
- 55% of adults prefer Judging, whereas 63% of lawyers do.
In sum, setting aside differences between men and women (which show most prominently in the Thinking/Feeling type differences), lawyers – as compared to the general population -- tend more often to draw their energy internally rather than from other people, to see larger patterns rather than specific facts, to rely on rational logic rather than values, and to come to conclusions.
In late 2003, the average age of the lawyers in the Bombardier law department was, according to its general counsel, 35. Speaking at a Canadian conference, the general counsel seemed proud of that average.
I can’t come to a conclusion. Perhaps, given age discrimination laws, I should not even touch this subject, but it got me thinking.
If the average lawyer graduates law school at 25, then the Bombardier lawyers – were they US
My reaction, at heart, is that law departments should strive for the right lawyers in the right positions, not any age-defined notion of quality.
At a conference in late 2003, the General Counsel of Manulife, a Canadian financial services company then with 125 lawyers, estimated that one or two of his lawyers transfer each year to a non-lawyer role on the business side.
His offer to them was to hold their position for three months, while they decided whether the switch made sense to them and to their new group. Candidly, he admitted that the law department might lose some of its best and brightest. Despite the level of the departing, he estimated that “the failure rate is probably one-third to one-half of the émigré lawyers. I took that to mean that a good portion of the lawyers either did not like their choice or did not succeed in the new position.
Even if that is a typical, poor track record, I support good lawyers exploring career options outside the law department.
The general counsel of Agrium, a CDN $2.5 billion Calgary-based company, explained at a conference that his company faced some huge lawsuits. To involve his clients in the litigation and to inject project management skills, he obtained from the client a “business manager.” That person was responsible for assisting with logistics, planning, and costs of the sprawling, expensive suit (or that is what I suppose).
It makes excellent sense to draw upon skills outside the law department, such as financial planning, project management, and technology, to parry with the ferocious thrusts of high-risk litigation. That kind of support could be thought of as administrative; more valuable even than that is the heightened involvement of clients in the suit, as compared to them tossing it over the transom “for the law department to fix.”
Denney’s next sentence does not ring true: “So the next strategy has been to cut the department’s size.”
Benchmark surveys, compensation studies, my consulting projects, conferences, and the law department journalists are not teaching that law departments are shrinking. [But see my post of March 25, 2005 on shrinking law departments.] No sane executives in America could conclude that wholesale firing of in-house counsel appropriately and effectively reduces total legal costs.
This is not to say that terminating under-performing lawyers is senseless, or shifting workloads and responsibilities among the current legal staff can’t bring improved productivity, nor that outsourcing has no bite. But it is to say, loudly and often, the best investment a company can make toward legal health and a lean legal budget – hire good lawyers and manage them well.
Bob Denney, a law-firm marketing consultant, wrote in Law Practice (April/May 2005 at page 6) that cutting law firm costs “hasn’t produced the results demanded by senior management.” That statement may be true.
I am a sucker for metrics, but hopefully not a sucker. When I read in Law Practice (April/May 2005 at pg. 5) that “[b]ehavioral experts say that your chances of accomplishing something increase by 70 percent if you write it down,” my “magic metrics” meter jumped into the red.
So I will write. If a busy in-house lawyer jots down what needs to be done, I suspect the lawyer will more likely remember the tasks and finish them off. If writing a note implies thinking about the topic for at least a bit, I suspect thoughtfulness alone raises the odds of achieving a goal. If others see a commitment in writing, or see their own obligation set out clearly, success is more likely. The inner voice of memory fades; post-it notes harangue you forever.
Having accepted the point of writing, whence the 70 percent? Probably a sociologist tested 45 undergraduates and created the number, which has since been worn smooth as a pebble in a stream by efficiency epigones. Forget the urban legend, the faux figure, and the magical metric: write clearly what you and others ought to do and your performance will improve.
