When you recall three instances of patent boutiques failing to handle litigation as well as do general litigation firms, inductive reasoning lets you conclude to use generalist litigation firms. When you know already that Ivy League graduates who clerked for the Supreme Court are smart, you use deductive reasoning when you hire one quickly. These forms of reasoning are common and commonly understood.

Less commonly, creative lawyers rely on a third type of reasoning: abductive reasoning, the logic of what might be. According to Fast Company, Oct. 2006 at 56, this is a form of intuitive, whole-brain creativity (See my post of Oct. 29, 2006 on ambivalency’s boost to creativity.).

This figure from the New York-based Society of Corporate Secretaries and Governance Professionals is cited by the Wall St. J., Oct. 23, 2006 at R11. The 20 percent figure feels quite high, given how recently software for board members has arrived (See my posts of July 19, 2006; and Aug. 9, 2006).

The article summarizes the standard features included in these packages. Those features typically can cost from $3,300 per year for a basic portal from InfoStreet (Tarzana, CA) to more than $100,000 per year for a sophisticated, multi-company portal from BoardVantage (Menlo Park, CA).

Law firms, too, can use board portals for their clients. The article references Reed Smith, which uses a portal from New York-based Diligent Board Member Services LLC. The article mentions other portal packages for boards of directors, such as BoardLink (Thomson Financial) and Leaders 4 (80-20 Software Pty. Ltd. of Melbourne, Australia).

Chicopee, MA Mayor Michael D. Bissonnette was quoted in The Republican, Oct. 27, 2006 on development of the city’s properties. Evidently the city has had no central register of its properties such as schools, parks, strip islands, and right-of-ways.

The Mayor said he is analyzing a report completed by a Law Department intern of every piece of property the city owns; but not just a report -- one that weighs in at 700 (sic) pages.
Is it the fact that the Law Department has an intern that awes me (See my posts of March 25, 2005 April 23, 2006 on interns.)? Is it that modest-sized Chicopee has a Law Department? Or that this work shouts out quasi-legal?

Not at all. It is the preternatural grandeur of a 700-page law-department opus!! Proof positive of a productivity metric that relies on pages per intern.

A retention letter usually transmits relevant documents of a single matter (See my post of Aug. 24, 2006 with definitions and distinctions.) whereas outside counsel guidelines lay down ground rules for all matters (See my post of Sept. 25, 2006 that compares these letters to outside counsel guidelines.). The two documents leave an information gap.

The missing information includes (1) a list of acronyms used within the company, (2) the names of key business clients and their roles in the matter, (3) a short history of the business circumstances around the matter, and (4) names and roles of relevant in-house lawyers and paralegals. Supplementing the letter and the guidelines, this context document will help ground a law firm new to the company.

Larry Bodine, a respected marketing consultant to law firms, riled me when in Law Practice, Vol. 32, Oct./Nov. 2006 at 12 he writes that “a lot of RFPs are simply fishing expeditions that result in nothing more than wasted time for the firms that respond to them.” Larry, throw that one back!

His “red flags” for worthless RFPs are bull. "If the company won't reveal its legal budget, it may mean that the company is losing money, can't pay its bills and is just kicking tires to attract a lowball bid.” Wrong. The company does not want law firms to frame their bids in light of what the company has been paying, but rather in terms of what the firm would charge for the anticipated work.

"If the company won't answer any questions -- such as what it wants to see in the bid, who else is bidding, or who will decide the winner and when that will happen -- the RFP is probably wired and you're just window dressing.” Mostly wrong. Bodine exaggerates (“the law department won’t tell you anything”) and then pummels the over-statement. Law departments, to be sure, need to tell firms enough that the firms can propose intelligently and they ought to give a sense of their timing, but they have no obligation to answer everything firms might like to know.

In my extensive experience with RFPs, law departments take the time-consuming and disruptive process very seriously. They do no pre-ordain winners and subject all the other firms to a meaningless charade. Disappointed firms may not believe the good faith of law departments, and if they are not selected it salves their pride to rail about fixes and wires – they may simply not be as good as the winning firms.

"In seeking new business, your last resort should be to discount fees," intones Patrick McKenna in Law Practice, Vol. 32, Oct./Nov. 2006 at 16. If law departments force their law firms to discount fees or rates, the firm "must extract a reasonable quid pro quo in exchange." After all, McKenna asserts, giving something away will only cause the law department to attach no worth to it.

He offers four compensatory demands that law departments might face when they insist on discounts. (1) The department could award the matter to the firm as a result of the concession. (2) The department could pay the firm electronically within two business days of receiving the invoice (See my posts of May 4, 2005; Aug. 24, 2005; Aug. 27, 2005; and Oct. 14, 2005 on prompt payment schemes.). The department could provide staff to do some of the mundane work of the transaction. (4) The department could agree to serve as a spokesperson for the firm or as a reference with interested prospects (See my post of Sept. 21, 2005 on publicizing firms.).

Recent research suggests that ambivalent feelings -- the simultaneous anxiety and excitement of starting a new project, say -- enhance creativity. Assistant Professor Christina Ting Fong of the University of Washington business school set up situations where students felt different degrees of ambivalence. The students then took the Remote Associates Test, a commonly used measure of creativity. According to BusinessWeek, Oct. 30, 2006 at 16, those who felt ambivalent scored higher on creativity.

If novelty and nervousness sharpen, perhaps because an ambivalent state of mind broadens the mental resources drawn upon, in-house counsel who are under pressure and dealing with new legal issues have the most fertile circumstances for coming up with novel solutions.

Elsewhere this blog has dealt with creativity (See my posts of May 4, 2005 and the low regard by law departments of law firm creativity; July 21, 2005 on the low value departments place on law firm creativity; Oct.18, 2005 about lawyers not necessarily wanting more creative and demanding work; Oct. 30, 2005 #3 and some survey results on law firm creativity; Jan. 10, 2006 on methods to boost creativity; May 14, 2006 on personality attributes of inside lawyers; May 16, 2006 on right-brained creativity; June 15, 2006 on creativity in executives; Aug. 28, 2006 on Edward De Bono’s Green Hat thinking; Sept. 4, 2006 on methods to push creativity; and Oct. 6, 2006 about leadership.).

The law department of chipmaker Qualcomm has elevated the term “profit center” to a prodigeous level. The revenue the law department and its outside counsel brought in from patent royalties in 2005 accounted for more than two-thirds of the company's $2.3 billion in operating earnings. According to BusinessWeek, Oct. 30, 2006 at 75, Qualcomm has used its 1,800 patents for wireless devices to obtain payments -- the magazine uses the trollish pejorative "extract outsize royalties" -- from other companies on current and next-generation products.

All law departments would burst with pride if their efforts were associated with bringing in close to $1.5 billion in revenue.

For more on law departments as profit centers (See my posts of March 12, 2005 on a law department that funded its matter management system in return for reductions in reserves; Nov. 25, 2005 about whether law departments should manage settlement funds and recovered amounts; Feb. 8, 2006 on DuPont’s collection efforts; Nov. 28, 2005 and Feb. 16, 2006 on IP recoveries; March 15, 2006 on litigation recoveries; March 28, 2006 on EMC; March 17, 2006 on Autodesk; March 15, 2006 on insurance reimbursements; and June 15, 2006 on release of reserves; but May 19, 2006 on the problematic side of crediting recoveries.).

Every few years, early in a benchmarking project, a general counsel asks whether sharing data on staffing, spending, cases pending and the like risks anti-trust scrutiny. One law department I know went so far as to obtain an opinion of outside counsel that the benchmark study would not jeopardize the company. Is the law department’s company at risk if it contributes its data to an industry benchmarking project?

Without expressing a legal opinion, and with no intention of rendering legal advice in any jurisdiction, I think benchmark projects trigger no antitrust wrongs. No one conspires in restraint of trade – except perhaps to pay less to law firms – and no one fixes prices, although they may want to find ways to pay less to law firms.

Laurence Simon's Guide To In-House Counsel Salaries (2006) states that "around 600 of the [Irish] Republic's 6,500 solicitors currently work in-house." Elsewhere I have noted the ratio of in-house counsel to outside lawyers in England (See my post of April 13, 2006 with its estimate of 14.5%; and Feb. 1, 2006 No. 3.). I have also seen estimates that approximately 100,000 lawyers in the US work in private corporations or the government, out of a total of around one million lawyers. Observers estimate that there may be 50,000 in-house counsel in China, but I do not know how many total lawyers (See my post of Oct. 19, 2005.)

Based only on the first three data points, a rough rule of thumb might be about one in-house lawyer for every 10 private practice lawyers. That’s not at all to say that in-house lawyers each sustain ten outside counsel; quite differently, the typical 40/60 inside to outside ratio of spending along with the higher hourly cost of outside counsel suggests more of a one-to-one ratio (See my posts of June 28, 2005 on the 40/60 ratio; March 19, 2006 and its application to Canadian data; and Aug. 14, 2006 on the one-to-one derivation.).