Textron launched a major Six Sigma initiative in 2002. USA TODAY recently asked Textron’s CEO, Lewis Campbell, who is himself a Six Sigma green belt, about that initiative. The CEO praised the law department. Mirabile dictu!

“Our legal department has been one of the most aggressive to touch Six Sigma.” That commendation is certainly much visibility from the CEO’s office, and on a management practice to boot (See my post of June 11, 2007 and 11 references cited about other forms of public relations undertaken by law departments.).

The 2007 ALM Research Survey Report on Billing Rates & Practices summarizes data from 5,058 law-firm respondents. About a third of those respondents were solo practices, 58 percent were from firms of 2 to 39 attorneys (“small firms”) and 10 percent practice in firms of 40 to 170 attorneys (“mid-size firms”). At page 1 of the Executive Summary the report states that “female attorneys, on average, tend to bill at lower hourly rates than male attorneys, regardless of firm size, years in practice, geography, and – with a few exceptions – practice area.”

An odd and disturbing finding, which is hard to explain. Maybe it is that women lawyers are less greedy, or they are not as tough negotiators, or they are less egotistical? I do not want to be strung up by feminists, so I am only speculating on what might account for the inexplicable disparity between the sexes. Perhaps there is still an old-boys network that favors male lawyers in firms? Perhaps the methodology of the survey skewed the results?

The received wisdom puts a typical in-house lawyer in the $200 per hour range, with all costs to the company accounted for. That may be a representative figure, but what if we look more closely at a high-ranking lawyer (See my post of July 25, 2007 for some data on general counsel rates.). Assume that senior lawyer makes $250,000 in base salary, a cash bonus of $75,000 (30% of base) and also bears a benefits load of 30 percent. That lawyer’s total comp and benefits cost reaches $400,000. At a presumed 1,850 chargeable hours (See my post of Sept. 25, 2005 on 1,850 as a normal assumption for in-house chargeable hours.), each hour costs $216 dollars.

That lawyer also should be allocated some of the overhead of the department’s expenses. Say the lawyer is one of 50, where the inside budget is then $25 million ($500,000 per lawyer). Since that inside budget is something like 25 percent non-compensation expenses, then the lawyer’s full-boat costs should add in another quarter to the $400,000, another $100,000, which pushes the rate up $54 an hour (See my post of July 27, 2007 on fully-loaded costs.).

Finally, the lawyers in a department who are direct reports to the general counsel probably have administrative responsibilities, so assume we shave 50 hours off the chargeable-hours assumption. [I suspect that is too small a number.] Then the fully-loaded cost per hour of our hypothetical senior lawyer ($500,000 divided by 1800 hours) reaches $278 an hour.

Companies have prevailing norms, systems of social control that define appropriate attitudes and behaviors for all employees (See my post of Dec. 17, 2007 for the difference between culture and norms.). As but two examples, do executives have parking privileges; is child care provided?

Law departments inhale the norms of the company they serve (See my post of June 11, 2007 on equity and equality norms.). They also develop swarms of norms (See my post of Jan. 8, 2008 on ethnography.).

Do people work on weekends (See my posts of Nov. 9, 2006 on skiving; and Sept. 22, 2006 on perceptions that law departments are nadirs of competitiveness.)? Do lawyers take all their vacation hours (See my post of June 30, 2007 workaholics.)? Are the halls and offices of the law departments quiet at 6PM?

Everywhere you look you can spot norms, such has how people share information throughout the law department (See my posts of July 25, 2005 on communities of practice; and March 13, 2007 with references.).

Can anyone walk in and talk to the general counsel (See my post of Sept. 25, 2006 on open-door attitudes of general counsel.)? Do many people in the law department eat lunch together (See my post of April 14, 2005 on brown bag lunches.) or go with each other to social events (See my post of Sept. 22, 2005 law department retreats.)?

Norms lurk everywhere (See my post of Dec. 17, 2007 on artwork; Dec. 19, 2007 about grounds for concern over coffee; and Oct. 22, 2005 for my iron-clad rule on dress codes.)?

Law departments as profit centers. Corp. Counsel, Vol.15, Jan. 2008, at 111, notes that DuPont’s legal department “estimates that it has generated $630 million of revenue in the past three-and-a-half-year period” since the start of 2004. A large part of the most recent revenue came from a $92 million asbestos settlement with more than a dozen insurers” (See my post of Jan. 1, 2008 on attorneys fees and law departments as profit centers.).

A social and professional network for lawyers – LawLink. Just after my comments on LinkedIn and my invitation to readers of this blog to invite me to connect with them (See my post of Jan. 19, 2008.), I read in Bus. Law Today, Vol. 17, Jan./Feb. 2008 at 7, about LawLink.com. According to its founder, Steven Choi, the free site is open only to registered lawyers and aims at professional networking. Choi contrasts LawLink.com to Lawbby.com in that his site encourages members to “pose questions, seek referrals, post classified ads, and share information.”

Rationality, reason, and a clear-headed lawyer. To be rational is to draw conclusions from facts that are logically warranted. Someone is rational who step-by-step, concept-by-sound concept, reaches a conclusion. An in-house lawyer who thinks through a situation to a solution demonstrates rationality. Somewhat different is to reason. Reasoning often depends on trial and error experience as well as reflection on the past. It is less a mechanical process of syllogism and deduction and more a process of thoughtful cerebration. I think of it as the difference between logic and learning (See my post of Jan. 17, 2006 on irrational optimism.).

Calgary’s In-House Counsel Network (ICN). The ICN was established to meet the unique needs of sole in-house counsel or in-house counsel working in small legal departments. Here is the link to the ICN website which more fully describes the ICN, its membership and objectives.

In November of 2007 I published an article about some down-and-dirty steps to make the implementation of an e-billing system go more smoothly. The article Download rees_morrison_practical_tips_on_ebilling.pdf offers a number of practical suggestions.

Since then, more posts have joined the group on this blog (See my posts of Nov. 20, 2007 on improvements to the LEDES format; Nov. 20, 2007 on an adverse effect on fee-bill reductions; Nov. 28, 2007 on internal staffing requirements; Nov. 28 and Dec. 2, 2007 on law firm complaints about e-billing; and Nov. 30, 2007 on mandating compliance by most law firms.).

A managerial breakthrough waiting to happen is the recognition by general counsel that an isolationist view of law departments limits our understanding of reality. It is blinkered to focus on how law departments become involved in an issue only at certain points and exit when the “legal part” is done. A holistic view of the situation would be better. In real life, events do not break themselves into clearly discernible “legal chunks” (See my post of Jan. 3, 2008 on a similar view that “legal risk” is broadly defined.).

Law departments ought to pitch into to examinations that go back in time to the origins of problems and forward in time to their full resolution and even to later consequences (See my post of Aug. 16, 2006 about a sense of end-to-end contract processing.). This requires cross-functional teams as well as people from different levels to carry out end-to-end examinations of processes.

The ALSP Update, Vol. 1, Dec. 2007 at 11, the monthly newsletter of the Association of Litigation Support Professionals (See my post of Jan. 27, 2008 on ALSP.), introduced me to Women in e-Discovery (WiE). Begun in mid-2007, “it has grown to more than 700 members with 10 chapters and 16 additional chapters slated for 2008.” The fledgling, but fast-growing group has a web site and many of its chapters host monthly meetings.

Any in-house women who support, use, or care about technology in the discovery field should find out more about both WiE and ALSP.

A number of organizations cater to legal technology, and each of them offers members of law departments access to special groups for them (See my posts of Feb. 18, 2007 with its mention of the Sedona Conference; Nov. 17, 2006 on ILTA, the International Legal Technology Association; Nov. 20, 2007 on LEDES, the Legal Electronic Data Exchange System; and Feb. 18, 2007 about the Corporate Forum and more generally the benefits of knowledge networks.).

The ALSP Update, Vol. 1, Dec. 2007 at 9, the monthly newsletter of the Association of Litigation Support Professionals(See my post of Jan. 27, 2008 on ALSP.), talks about the Yahoo Groups LitSupport listserv. A listserv is a way for people to post messages in threaded discussions and read others’ messages by topic.

This particular listserv has been running for more than a decade and currently has over 7,000 subscribers. It has amassed some 35,000 messages. Related to the substantive listserv is a LitSupport-Announce list where job openings are posted.

I mention this resource because it may be useful for law department lawyers and staff who have some responsibility for e-discovery and litigation support (See my post of Nov. 13, 2007 on internal e-discovery groups.). Listservs are yet another way those who care about management issues in law departments can keep abreast of the latest thinking and meet others who share their interests.

The maintenance costs of equipment in a law department can amount to significant sums. Here is a comment from the administrator of a very large government law office.

“Normally, we spend $750,000 on equipment each year. That includes everything from computers to digital senders to faxes to copiers and we’re going to defer $500,000 into the next year. So the money that we’re saving, not spending, on copiers and equipment, is going to save jobs.

The other thing that we’ve done is to not buy maintenance agreements on all of our copier equipment. We spend $5,000 or $6,000 every year to insure a copier that might cost $25,000, so that if it does break down we call somebody out. It’s covered under the maintenance agreement. I think that we’re taking a bit of a gamble, but we’ve decided we will buy maintenance agreements on most of our equipment, but not all, to save $100,000.”

These two ideas come from Rees Morrison, Law Department Administrators: Lessons from Leaders (Hildebrandt Inst. 2004) at 102. Deferral of maintenance is not a good long-term plan, but selective maintenance agreements, especially on lower-cost equipment, might be worth considering.