Stock appreciation rights. Corp. Counsel, Vol. 14, Aug. 2007 at 80, mentions in passing this form of equity award while it discusses general-counsel compensation (See my post of July 25, 2007 on options and methods to value them.).

In-house professors. A while ago I asked whether there are in-house lawyers who also teach at a law school or business school. One such person was kind enough to write me: “In addition to being General Counsel, I am an adjunct professor at Temple University Beasley School of Law and teach an intellectual property related course during the Spring Semester.” I appreciate this email from Michael L. Korniczky, Vice President & General Counsel, Graham Packaging Company (See my post of May 30, 2006 on the topic of in-house counsel who teach.).

Legal-process service provider blog. Noel Rodrigues, a Market Research Assistant with Pangea3 , wrote me to advise that “We have recently created a Business Blog” on our site.

An effective technique to create incentives for a law firm is to have the law firm hold back 15 to 25 percent of its standard-fee billings. The law department will agree to restore some or all of the held-back amount, depending the results achieved or the effort invested.

The law department can think of restoration as a reverse bonus. If the law firm achieves above average success, such as resolution of the matter in less than 15 months, it becomes entitled to a complete restoration of the held-back amount. If the outcome is less satisfying, the restored amount is correspondingly less (See my post of Aug. 4, 2007 on an example of a bonus arrangement.).

As I see it, a holdback might be recovered partially or completely by a law firm; amounts given up by a discount are gone forever.

This blog, despite its dry-as-dust name, is awash in chortles.

Seriously, this blog has tickled funny bones with verbal word play (See my posts of Sept. 3, 2006 on goring the oxymoron; Jan. 5, 2006 on “ph’s”; Jan. 1, 2006 which uses the planets in order; March 1, 2006 with Germanicisms; May 16, 2006 on outside-counsel prolixity; May 16, 2006 about hare-brained lawyers; March 16, 2006 that disses southpaw lawyers; and Feb. 19, 2006 on symbolism.).

Puns abound (See my posts of Feb. 15, 2006 [Six and the single-lawyer department]; Feb. 16, 2006 [Measuring legal complexity – an example taxing in the extreme]; Feb. 16, 2006 [NIPP and tuck]; July 27, 2007 [“garden-variety lattice”]; Aug. 5, 2007 [“wetter to drip-drip”]; and Sept. 13, 2005 [“Oracle hard on PeopleSoft”.).

At intervals there have been sad attempts at humor (See my post of Feb. 19, 2006 with its riff on “unbonuses; Sept. 21, 2005 with its embedding of seconds, minutes, hours and weeks; Dec. 9, 2005 “until Black’s Law Dictionary runs out of words”; Oct. 21, 2005 “Other than that, Mrs. Lincoln.”); Nov. 9, 2006 on the “altocracy” and a tall tale; Dec. 22, 2006 on training, where OJT is “the intellectual equivalent of eat what you kill”; Aug. 26, 2006 and the many hats worn by general counsel; Feb. 14, 2006 on valentines and general counsel, with cross references to clever posts and four pun posts; Oct. 18, 2005 on scheissenbedaurn; and Oct. 22, 2005 for my tongue-in-cheek guidance on dress codes.).

Irony, can you imagine?, seeps out here and there (See my post of June 6, 2006 on the delivery time of the general counsel of Graham Packaging.) as well as metaphors pushed to the you-know-what point (See my posts of May 20, 2005 and the color red; May 26, 2006 on rubber and roads; Dec. 23, 2005 and racehorses; and April 9, 2006 on hair loss.).

So, far, however, I have not sunk to lawyer jokes, since they are not appealing.

In the guidelines for outside counsel that I have reviewed, law departments are all over the place on billable travel time.

Some let outside lawyers bill time only if they travel during business hours. Others let them bill only while working on their matters, even though that “guideline” is completely unenforceable. A third possibility lets lawyers who travel bill two hours (or some number of hours) to a matter – simple, and perhaps a balancing of the equities.

A more lax view allows clients to bill for travel time at half of their hourly rate or some other percentage. Yet another variation is that only one person may bill for their time on whatever the arrangement is (this is akin to the notion that only one person at an internal meeting can bill for the time of the meeting).

I can imagine a policy that allows time to be billed on longer flights but not on short flights. Another twist has to do with whether the client insists on the travel or whether it is the law firm’s decision as to when and where it should do something.

More valuable than mission and vision statements, in my view, are summaries of a law department’s practices in certain areas. A statement of when budgets should be required by law firms and how those budgets will be reviewed and recorded makes sense. A summary of how to and when to conduct a competitive bid by law firms for a matter will surface misunderstandings, clarify goals, and help keep that intent in everybody’s mind. Outside counsel guidelines are a third example of departmental policies (See my post of July 2, 2007 on guidelines for the oversight of outside counsel.).

Any repetitive process creates an opportunity for some structure. If there is a practice to evaluate the performance of law firms, some level of codification helps bring about consistency and quality. Likewise, a brief statement of what is expected when member of the law department interview applicants will help.

When law departments are surveyed at random, and a single lawyer responds from each participating department, any given lawyer in larger department has a smaller probability of responding than a lawyer in a smaller department. More precisely, the probability of a lawyer being included in the survey is inversely proportional to the size of the department in a random sample of law departments, if lawyers within a department are selected with equal probability and there are no non-responses.

However, composition of the sample is affected by non-response. One source of non-response is non-availability: no one answers the phone, no one receives the message on the answering machine, or no one answers the email or letter. It seems reasonable to suppose that in a larger department it is more likely that someone will be in the office.

Statisticians have developed methods to correct for this bias, one of which is to create a probability-weighted sample. With these methods, large law department lawyers have the same influence as smaller law department lawyers.

To craft a fee arrangement that makes a difference, law department managers needs to think hard not only about the outcomes they seek in a matter but also the likelihood of achieving those outcomes. Bonuses for the law firm that achieves a particular goal, such as a resolution of a case before substantial discovery begins or completion of a transaction by a certain date, need to be in line with that probability.

If there’s reason to believe that the odds of that outcome are less than one in four (25 percent or less) a bonus might be sizeable, such as up to 50 percent of fees billed. Whereas, if the company is likely to prevail substantially on a motion for summary judgment or complete the zoning approval by the year end, the bonus for that success ought to be negligible. Whether or not, the bonus as percentage of fees is not the only standard. An absolute dollar amount might also work its charms.

In other words, don’t promise a bonus for the inevitable; reward outcomes that on the probabilities known at the start are exceptional.

Although it would be preferable for a law department that installs an e-billing system to push nearly all of its law firms into compliance with the system, such a comprehensive effort will take much time. Aside from the time and effort, it may not yield that much incremental information and savings (See my post of Feb. 21, 2007 on e-billing vexations of law firms.). Every law firm will add increases somewhat the demands on the person who administers the e-billing system.

An intermediate position is for a law department to require its handful or two of law firms that bill the most to submit their bills electronically. For many law departments a dozen or so law firms will account for the largest portion of the bills submitted during the year. This hybrid, partial solution may offend those who seek comprehensive purity, but it is a pragmatic balancing of interests.

More than 20 years ago, sociologist and organizational theorist Charles Perrow developed his "normal accident theory,” which was summarized thusly: "as the complexity and interconnectedness of systems increase, major accidents become inevitable and thus in a sense, ‘normal’." MIT Sloan Mgt. Rev., Vol. 48, Summer 2007 at 64, explains one technique to help us anticipate normal accidents that may arise from complex situations.

“Agent-based modeling is a computer technique that simulates complex systems from the bottom up to capture their emergent properties.” The software has artificial intelligence rules enabling it to make decisions and act based on those roles. Additionally, the software agents may change or evolve, allowing new behaviors to emerge. Someday we may see an agent-based simulations for hostile tender offers, complex litigation, or merger negotiations.

Successful and productive in-house counsel often lean heavily on their administrative assistants (See my post of post of May 17, 2006 on the title and definition of this position.). If trained, motivated and capable, a secretary can handle a wide range of tasks (See my post of March 18, 2005 on limits to what paralegals can do.). A good executive assistant helps with much more than scheduling, addressing envelopes, and fielding telephone calls. The person needs to be able to keep confidences, exercise good judgment (such as when to interrupt a meeting), and show initiative.

According to many people, it’s becoming harder and harder to find qualified people for this position at the compensation levels permitted by Human Resources. For more ideas, visit the website of Lawyers Right Hand. For this reason as well as because new lawyers coming into law departments are technologically proficient, I foresee that the ratio of lawyers to administrative assistants will keep moving higher from the current 3 or 4 to one.