“A major U.S. firm usually quotes the cost of $10,000 to $15,000 to prepare and file a patent application; that patent application can be prepared for $2,500 to $3,500 in India.” (Nat. L. J. Sept. 12, 2005 at 14). The domestic charge is thus four to five times higher than the outsource charge.

If this cost differential holds for preparing leases and subleases, searching and registering trademarks, summarizing Suspicious Activity Reports, and other generally routine tasks, it presents an irresistible opportunity for law departments.

Quasi-legal work (domain names). Further to my post of July 21, 2005 I add obtaining, tracking, and protecting domain names. Someone needs to do it, but the law department’s involvement should come only if there is infringement that resists a cease and desist letter. A likely candidate to handle domain names is the marketing function.

Quasi-legal work (corporate blog review). In a Financial Times article on corporate blogs (July 15, 2005 at 8) the columnist cited a US lawyer as saying that “some companies require bloggers to clear all material through the corporate legal department. The trouble is, this can be time-consuming and tends to reduce an author’s comments to bland platitudes that annoy readers.” To be sure, but more fundamentally, this is a low-value, irritating chore for a law department. (See my post of July 21, 2005 on quasi-legal activities.)

Boards retaining law firms. Arizona Electric Power Cooperative has three boards. “Each board retains outside counsel to advise them during Board meetings to keep that [resource of] independence.” (40 AZ Attorney 12 (Nov. 2003)) (See my post of Sept.13, 2005 about the actions of the Board of Carey International and two posts on July 25, 2005 about the costs of boards retaining independent counsel.)

Compliance staff compared to legal staff. An article in the Financial Times, May 5, 2005 at 9, stated that Merrill Lynch had 280 lawyers and 235 "compliance executives" worldwide. (See my posts of March 26 on second class citizens, July 25 on a compliance survey, July 31 on law and compliance housed together, and Sept. 5, 2005 about Countrywide’s compliance program.)

Groups for general counsel. The In-House Lawyers Association (IHLA) has formed in the UK, “after an acrimonious split with the Law Society’s Commerce & Industry Group (C&I Group). As reported in Legal Week (Sept. 15, 2005 at pg. 2), “there are many groups representing the UK’s relatively small cadre of in-house commercial lawyers – seven at the last count. (See my post of March 24, 2005 about the General Counsel 100 being formed.)

I have worked with a law department that has an unofficial facilitator consultant. This woman has worked with the law department in various circumstances over the past several years and is quite adept at developing agendas for meetings. More important, she can run the meetings in a neutral way, and with expert touch for group dynamics.

Having worked with the department from time to time over the years, she has some feel for its personalities and interactions. Finding and nurturing such a facilitator on retention would be a useful step for most law departments.

A full-scale 360º evaluation program stumbles badly if the law department is small. The department simply does not have enough reports to provide anonymity and representativeness, by which I mean a sufficiently sizeable sampling of opinions about someone above.

What I have done in two different retreats, however, has been to include a question on an online survey that addresses the effectiveness of the department’s leadership team. The question asks the members of the department to anonymously evaluate the general counsel and his or her reports on a number of attributes. These attributes likely include decision-making, strategic planning, fairness and accessibility.

The composite results do not point fingers at any individual, unlike a 360º evaluation, but they can peel back some of the mystery.

The Arizona Attorney published a 2003 roundtable discussion among six senior corporate lawyers in Arizona (40 AZ Attorney 12 (Nov. 2003)). One lawyer at the round-tabler was the General Counsel of Arizona Electric Power Cooperative, Patricia Cooper, who oversees its two lawyers and one paralegal.

Cooper said that the outside counsel spending “may be anything from [$750,000] one year to maybe $3 million another year.” I am surprised at a swing of four to one. In my consulting experience, law departments have a reasonably stable expenditure level for outside counsel – barring the lightning bolts of a major acquisition or life-threatening litigation.

ACC and its co-sponsor, Lexis Nexis, reported survey results in 2004 from 1,814 law department responses.

The summary states: “The average per month budget for legal research is nearly $19,000, with the median at $5,000. The budget for online and dial-up services averages around $1,000 annually, making it only a small portion of the total annual legal research budget.” (Confused?)

As described in an earlier post, the median inside budget of the respondents was about $840,000 a year – which the post challenges as being too low, meaning “legal research” at $60,000 per year (12 times the $5,000 figure) would account for 7 percent of the inside budget. That has got to be too high a figure.

Whether or not, that median figure of $5,000 needs much clarification. Does it include subscriptions and acquisitions by libraries? Does it include payments to legal research firms? Does it include payments made to law firms who research areas of law? One might suppose that Lexis Nexis wanted data about spending for online legal research, so the answers to these three questions would be “no.”

In 2004, ACC posted a web survey and e-mailed invitations to 33,468 in-house counsel. A summary reported the results from the 1,814 responses.

The median number of US-based attorneys was “slightly over 6” while non-US-based attorneys were “less than one.” Corresponding medians for paralegals (3.0) and other legal support staff (3.3) was greater than for non-US based support staff (“less than one”). Taken together, the median total law department reported 13-14 total employees.

Here is the oddity. “The median legal budget for the entire company, including personnel, operations, administration, occupancy expenses and outside counsel fees is $1.8 million.” The median outside counsel fees were $960,000 of that total expenditure. That leaves just under $900,000 for the total of 13-14 employees, which at about $150,000 per lawyer is much too low. Other surveys show that inside spending per lawyer runs at $300,000 or more, not half that figure as reported by ACC.

With an increase from the comparable 2001 census of 10.2 percent, the US non-governmental in-house counsel population has grown steadily. (See my post of Sept. 10, 2005 regarding comparative growth rates of the 200 largest law firms and law departments.)

The average of 3.05 lawyers per corporation stands higher, I am sure, than the median number, but the executive summary I read did not provide that latter figure. As for other demographics, survey respondents had held their position as in-house counsel for an average of 11 years and had worked in other legal positions an average of 6 years before going in-house. (See my post of Sept. 4, 2005 about demographics of law departments.)

A perspicacious article in the Harvard Business Review, written by David Nadler of Mercer Delta Consulting (Sept. 2005 at 69), explored the tensions of being the trusted advisor of CEOs. It listed some of the distinctions that make the CEO’s job like no one else’s in a company. Let me paraphrase and apply the distinctions to general counsel:

“No one else in the [law department] is so starved for unbiased information.” Direct reports to a general counsel manage up; everyone tries to muffle bad news; no one is completely honest with a powerful general counsel.

“No one else so needs to hear hard truths.” If the general counsel can’t get the complete, unvarnished picture, the company and the department are running down a dark, dark tunnel.

“No one else is such a lightening rod for criticism.” If legal costs soar, if the appeals court refuses to reverse, if the patent doesn’t hold up, if the deal collapses, guess who ends up with the Queen of Spades?

“No one else is the final arbiter in so many vital [legal] decisions and, consequently, so vulnerable to self doubt.” I am reminded of the papal disclaimer: “I’m not final because I’m infallible, I’m infallible because I’m final.”

It’s tough being lonely at the top.

The Project for Attorney Retention (PAR), an initiative of the Program of Worklife Law at American University’s Washington College of Law published a lengthy report in December 2003 (10 Wm. & Mary J. of Women & L. 367 (Spring 2004). The report addressed telecommuting in legal departments (pg. 370).

“A recent study by Catalyst found that nearly three out of four of the female and over half of the male in-house counsel surveyed wanted to telecommute, i.e. to work some hours or days from home.” Yet PAR found formal telecommuting arrangements in legal departments “uncommon.”

I have detected no groundswell of desire by in-housers to work from home. The Catalyst findings make me wonder about how the question was asked and interpreted.