How do law department lawyers find additional hires? Based on over 600 responses to a survey reported in InsideCounsel, March 2007 at 60, the clear edge goes to placement firms (See my post of July 5, 2006 on executive search firms’ services.). Here is the rank order given by respondents for their methods and resources to hire lawyers:

Placement firms (61.5%)
Employee referrals (46.6%)
Law firm referrals (45.8%)
Classified ads (44.2%)
Online job boards (42.8%)
Recruit from outside firms (31.4%) – but the choices do not include the more preferred source, law departments (See my post of March 26, 2007 as to sources.)
Law school recruiting (11.8%) (See my post of Nov. 8, 2005 about how infrequently law departments hire straight from law school.).

One other method was not asked about (See my post of March 17, 2007 about Motorola and its public announcement of a high-level opening.). Nor did the survey ask about the practice of hiring secondees (See my post of Sept. 21, 2005 on recruiting secondees and hiring restrictions.).

Based on over 600 responses to a survey, and as reported in InsideCounsel, March 2007 at 59, law departments would prefer to hire lawyers from another legal department 50 percent more than than they would prefer to hire from a law firm. Specifically, 34 percent of the respondents like to hire from another department, whereas 20 percent like to hire from law firms. Almost half of the respondents (45%) have no preference (See my post of Oct. 26, 2005 with its fabricated data on sources of hires.).

Not surprisingly, the two categories of lawyers sought most frequently are generalists and contract specialists. Surveys and consulting experience show that about half of all in-house lawyers are commercial generalists who spend much of their time on contracts.

InsideCounsel, March 2007 at 58, reports that “almost 40 percent of law departments added attorneys in 2006.” The quote presumably refers to net additions, not replacements. The data comes from 614 in-house respondents. Roughly speaking, large US companies have about five lawyers for every billion dollars of revenue. Stated differently, for every $200 million in additional revenue, a typical company adds the equivalent of a full-time lawyer.

The median number of lawyers in the law departments of the group is eight. Hence, the median respondent was at a company with revenue of one-to-two billion dollars. If the median company enjoys revenue growth of 10 percent it grows by $100-200 million, which according to the benchmark justifies adding another lawyer.

On this reasoning, it is surprising that less than 40 percent of these law departments added a lawyer, because increased revenue alone would likely account for an additional hire. Indeed, the reason given for adding attorneys was principally “business expansion,” which 46 percent of the departments that hired another lawyer gave as the explanation for the headcount increase, and gave three times more commonly than the next most selected reason, “bringing more work in house” (15%).

In an undated OutINFront piece of ACC Docket at 16, Ron Pol suggests ten steps to a successful offsite, and suggests three interesting ones to help attendees get more value from the gathering.

The three points focus on increasing what attendees learn from the conference. The first is to conduct a post-retreat survey: "Find out what participants really learned." Most surveys, taken at the end of the last day, spend too much time on venue, food and fun; new ideas and understandings count for much more. One way to gather the insights is through an online survey (See my post of March 26, 2007 on this tool.)

As a second idea, Pol urges organizers of the retreat to “invite participants to identify the three best ideas they've learnt.” Third, “the post-event workshop offers participants the opportunity to explore the best ideas and lift the rate of execution." Pol stresses that lawyers and paralegals ought to learn from the retreat, and these ideas are useful tools to identify what was useful – in hindsight a few months later – and how to spread the value of that learning (See my post of March 25, 2005 on my rule of three parts for a successful retreat.).

The adept use of statistics can greatly strengthen those who manage inside lawyers. Four uses of statistics particularly stand out: to explain, to change minds, to forecast and to diagnose. Here are brief comments on each application. Statistics can:

 Describe a phenomenon, such as the concentration of spending on law firms (See my post of March 24, 2005 concerning concentration over convergence.). The visual display of statistical findings has been explored on this blog (See my post of Oct. 1, 2006 and several instances.)

 Persuade people, such as to use a Pareto analysis of the value of various patents (See my post of March 21, 2006 on how few patents are worth much.);

 Predict the likelihood of events or performance, such as the likelihood of litigation costs exceeding $5 million in a give year (See my post of Nov. 13, 2005 on power laws.); and
 Identify causes and contributors to them, such as IQ as a predictor of job performance (See my posts of Jan. 14, 2007 on IQ and Aug. 14, 2005 on regression analysis.).

When the general counsel is promoted to become CEO, the successor general counsel usually reports to that executive, a lawyer (See my post of Jan. 27, 2006 regarding promotions of general counsel; Feb. 10, 2006 #1; March 13, 2006 #2; April 10, 2006 #3; Oct. 2, 2006 #3; April 12, 2006 on UK GC ambitions; Oct. 25, 2006 with more examples and references; and March 1, 2007 on Angela Braly’s promotion.).

An example came to light in InsideCounsel, Sept. 2006 at 76. Marschall Smith, who has the distinction of having been general counsel at three companies before taking that post at Brunswick Corp (See my post of Oct. 2, 2006 #2), reports to the former general counsel.

Smith finds all benefits in reporting to someone who understands his job and its pressures and difficulties, and acknowledges none of the possible disadvantages: second-guessing, dueling interpretations, avoidance, or competition.

It may make a difference that Smith's legal function is very decentralized. Each of Brunswick's five autonomous divisions has a general counsel who reports to the president of the division. Smith thinks that structure is appropriate because the person who is most familiar with the business unit makes the legal decisions. True, but how can someone truly be the general counsel of a company if most of the legal work is beyond that person’s direct control?

On his corporate staff Smith has two patent and trademark lawyers, a securities and finance lawyer, a generalist lawyer, and two lawyers in Asia and Europe who report to him (See my post of March 23, 2007 about Raytheon and its decentralized reporting of top lawyers to business units.).

As the percentage of the in-house lawyers who are women climbs, it will be increasingly important for general counsel, themselves often mothers, to make easier the work-life balance of working mothers. To assess that balance, there is, not surprisingly, a survey and rating scale. Business Law Today, Vol. 16, March/April 2007 at 9, gives some background. “The August 2006 American Lawyer survey of mid-level associates at 175 firms showed the average score for family friendliness was 3.61 on a scale of one to five.” The top scoring firm was at 4.64 and 39 firms scored 4.0 or better.

We will soon see requests for proposal that ask firms to identify their flex-time options, day-care centers, concierge services, telecommuting arrangements, and other offerings in support of working moms. Additionally, law departments will assess where they stand in terms of being family-friendly and make changes to do the right thing for those who are both working and raising families (or taking care of infirm or aged relatives).

A letter to the editor in Business Law Today, Vol. 16, March/April 2007 at 9, went further into paralegal certification than this blog has previously (See my post of March 23, 2006 for the National Association of Legal Assistants’ program that leads to becoming a Certified Legal Assistant.). The letter writer, Tina Boone, noted the Professional Paralegal (PP) certification offered by NALS www.nals.org. Boone herself has obtained an “advanced certification for legal professionals (PLS) and she mentions the status of “Registered Paralegal.”

Her primary point is that lawyers, including in-house counsel, should push their legal assistants and paralegals to obtain training and certification, and follow it up with continuing training and education (See my posts of March 18, 2005 and its question of whether there are limits on what good paralegals can do; and March 17, 2005 on compensation levels and classification for paralegals.).

In 2005, the US mega-firm Reed Smith hired Julia Cline, a former general counsel, as its first director of general counsel relations. According to Law Firm Inc., Vol. 5, March 2007 at 22, after Cline’s departure to return to practice, the firm appointed Marti Candiello, previously the general counsel for Sunoco Chemicals, to continue the program of interviewing senior lawyers at the firm's clients.

Candiello wants to "probe[s] clients for suggestions on how to add what she calls ‘the wow factor’ to Reed Smith's legal services."

OK, wow. Still, most in-house managers of outside lawyers would welcome a candid and thoughtful chat about the relationship with a firm and what might improve it. The blunt truth is that law departments ought to initiate those discussions.

The larger the law firm, generally speaking, the more specialists it offers, the deeper its bench, the more it can invest in product and technology, the better the training and so forth – but all this capability comes at the cost of increased overhead and rates (See my post of Jan. 3, 2007 for data on this effect.).

Thomas Sager, DuPont’s chief litigation lawyer, reinforces this observation in Law Firm Inc., Vol. 5, March 2007 at 30. He notes that "surveys consistently show that larger law firms spend more on overhead on a per-lawyer basis than smaller firms. It's a myth that [law firm] consolidation creates efficiencies."

Sager goes further and criticizes law firm mergers because they erode firm culture. "At duPont, we have discovered that the larger the law firm becomes, the harder it is for the firm to service us as well as it has in the past." Partners become strangers to each other, trust and connectedness decline, any individual client has less clout, and internal politics consume energy.

Worse, along with cost increases and culture loss, law firm mergers create conflicts. Sager again: "As more and more consolidations occur, the issue of conflicts becomes a virtual test of wills in the tug-of-war between our law department and the law firms seeking the waiver."