Managers of law departments overlook the total costs of filing cabinets. “If the average four-drawer cabinet holds about 20,000 pages, that equates to 360,000 additional pieces of paper." [I am not clear just what that sentence says; perhaps 20,000 documents.] According to InsideCounsel, April 2008 at 44, a large file cabinet typically has a footprint of about 14 square feet. But you also have to leave clear about 12 square feet to open the cabinet and as much more to have room to stand in front of the cabinet and pull files. In other words, the quiet and unassuming file cabinet eats up about 38 square feet.

If your law department is charged back what amounts to a market-rate rental for its space, you may be absorbing costs in your budget on the order of $40-$50 per square foot. That file cabinet, holding old documents and perhaps rarely used, costs you nearly $2,000 every year.

Additionally, as the article points out, "less office space means less heating, air conditioning and lighting, which not only means more cost-savings to the company, but also less strain on the environment." Does an eyesore add a cost beyond economic and environmental? Entranced by all this, you can read more about filing in legal departments (See my posts of Dec. 10, 2005: telecommuting reduces used of filing drawers; May 4, 2007: most lawyers prefer piles to files; April 23, 2006: electronic filing obviates paper storage; and Oct. 18, 2006: RFID devices for filing.).

The fewer the lawyers in a law department the more likely they are to be generalists. Yet specialization is the trend today, a trend that some investigators argue has neurological underpinnings. Research presented in the Wilson Quarterly, Vol. 31, Summer 2007 at 82, shows that the more people know, the more they can learn.

The initial learning of facts and events is recorded in a part of the brain called the hippocampus. As time passes, the brain may proceed to construct a permanent memory in other parts of the brain, notably the neocortex. Research suggests that the neocortex creates schemas in the brain into which newly acquired information fits. The more elaborate the schema, the easier the brain can make sense of, store, and retrieve new information.

Since specialists in an area of law presumably build richer schema (See my posts of Nov. 6, 2006: expert lawyers; and June 7, 2006: attention density and experts.), they can more quickly absorb and make sense of new cases, techniques and learning (See my post of Nov. 16, 2005: assigning lawyers to specialty areas of law.). Generalists may be plentiful, but specialists learn more quickly in their knowledge domain.

A survey crossed my desk that asked general counsel to rate the importance to them, when they decide to hire a law firm, of 19 factors. Yes, 19. The last one on the list is “Ethical infrastructure (e.g., ethics committees).”

I have worked with hundreds of law departments and not once have I heard an in-house lawyer mention the ethical infrastructure of the firms they use or are considering using. No one is even aware of law firm ethical structures and practices. No one gives any thought to whether or to what degree that mysterious element makes any difference in retaining a firm or sticking with it. Conflicts of interest are dealt with head on.

Like law firms being family friendly, diverse, culturally hip, environmentally aware, IT savvy, or pro pro bono, these characteristics of law firms are recognized and honored by law departments more in the breach (and in surveys).

This is a depressing and admittedly cynical view, but let me float the idea. Law firm partners spend much of their time thinking how to increase their revenue. Certainly, they practice law and care about those who pay their bills, but close behind they care about how to milk more fees from current and new clients.

Law departments, by contrast, have part-time managers of outside counsel. Law department lawyers spend the largest portion of their time focused on giving legal counsel. They incidentally manage outside counsel and often have little individual incentive to reign in costs (See my post of June 30, 2007: lack of individual incentives for cost control.).

At bottom, therefore, firms and departments exhibit an imbalanced focus on money. Where many people outside focus on increasing money, relatively few people inside – and only part of the time and reluctantly at that – focus on holding the line.

Quantitative approaches to case evaluation have many proponents (See my posts of Oct. 24, 2005: decision-tree risk analysis software; Feb. 8, 2006: a step to prepare for mediation; Jan. 17, 2006: decision analysis; and June 18, 2007: belief nets compared to decision trees.). To estimate the risks of winning and losing and the potential payoffs for different scenarios sounds very buttoned-down, very rational, very progressive. All plausible, but according to the ABA J., Vol. 94, April 2008 at 52, the tools have serious limitations.

A litigation manager in a law department should bear in mind four of the limitations. The article first mentions the sheer complexity of most commercial litigation in federal courts. It cites a case where the decision-tree analysis of an insurance company “set forth 83 different, probability-weighted damage and coverage scenarios.” A second concern is “the tendency to overemphasize those aspects of a problem that can be quantified and to minimize the significance of factors that cannot be easily quantified.” Third, humans too easily discount small probabilities even if the result is massive: a one percent chance of death deserves careful thought. Finally, according to the author, quantitative tools generally do not account well for different attitudes toward risk.

Not surprisingly, numeric case evaluation has its uses and its drawbacks.

A future where in-house lawyers and their external counsel use brain-boosting drugs may not be far away. Just as with steroid abuse in baseball, the winner-takes-all competitions of major league law will mean that some lawyers will dabble in powerful drugs to enhance their cognitive powers (See my posts of March 2, 2008 #4: ampakines and the neurotransmitter glutamate; May 30, 2006: working memory; Aug. 19, 2007 # 2: yohimbine; and Feb. 7, 2006: 40 other drugs that improve memory, including modafinil.).

Support for this prediction comes from Wired, May 28 at 112-113. Aside from methamphetamines and nicotine – notorious and dangerous stimulants – the magazine lists six other products, each with potential mental benefits as well as possible bad side-effects. The six include adderall (“thought to optimize levels of dopamine and norepinephrine, enhancing concentration and turning mundane tasks into wondrous ones"), aniracetam ("seems to boost release of glutamate, speeding neurotransmission and improving memory”), aricept (“thought to reduce the breakdown of acetylcholine, a neurotransmitter that helps relay messages around the brain”), modafinil (“improves focus, pattern recognition, and short-term memory”), rolipram (“may elevate levels of cyclic adenosine monophosphate to boost memory”), and vasopressin (“produced naturally in the pituitary gland … [and] shown to help users learn more effectively (especially men)”).

Brain cocktails are surely coming (See my post of Aug. 20, 2006: neuro-economics.).

Here is a neurological gulp to go along with my sip on coffee previously espressoed (See my post of Dec. 19, 2007: grounds for insight.).

Your brain continuously creates adenosine, a chemical that scientists believe causes mental fatigue. Caffeine blocks the brain’s adenosine receptors, which counters the chemical’s dulling effects. This stimulating news comes, appropriately enough, from Wired, May 28 at 110-111.

If you drink something caffeinated to increase your alertness, but you do not want to suffer jitters, it is better to drink frequent small doses rather than a mega blast. No venti; several demitasses. Even better, munch some sugary or carbohydrate-rich snack at the same time and enjoy an extra cognitive kick, for "it seems that glucose and caffeine together do more to enhance cognition than either does alone."

When an in-house lawyer needs to retain a law firm, the simplifying assumption outsiders make is that many firms of equivalent ability are available to vie for the privilege. Something close to a perfect market exists: many willing buyers transact with many willing sellers and economists are charmed.

Down on earth, however, in-house managers of external counsel often end up feeling hemmed in, without much choice or room to maneuver regarding external counsel.

Conflicts of interest knock some of the potential firms out of the running (See my posts of July 16, 2007: 19 references collected to that date; Nov. 7, 2007: competitive bids and conflicts; Nov. 22, 2007: conflict waivers given in advance; Nov. 27, 2007: when law firms fire clients; Dec. 17, 2007: clients are becoming more hard-nosed; Feb. 17, 2008: a team of academics at a firm; and Feb. 17, 2008: ill-effects of partners changing firms.)

But conflict-free firms may not be able to take on more work effectively because of capacity constraints (See my post of May 16, 2007: infinite capacity assumption not borne out.).

But but beyond conflicts and capacity, firms must clear the hurdle of chemistry (See my post of April 4, 2008: quarrels with “chemistry.”). The in-house team has to cotton to them.

But but but the law department lawyers need to be convinced of the technical skills and experience of the firm (and possibly its location).

Once each of these grounds culls out some of the erstwhile eligible firms (See my post of Feb. 10, 2007: capacity and conflicts in the context of industry specialization.), the range of eligible and desirable firms may shrink to few or create unsatisfying tradeoffs (See my post of Feb. 12, 2006: in many countries not a buyer’s market.).

An article in Wilson Quarterly, Vol. 31, Summer 2007 at 66, compares aggressive behavior in men and women. “Psychologists have found that while men channel their aggression through purported ‘rationality’ (interrupting, criticizing unjustly, questioning others' judgments), women are more likely to use ‘social manipulation’ (gossiping, backbiting, ostracizing) to get what they want.”

To the extent such broad and general differences apply to particular in-house lawyers, those who manage them should moderate aggressive behavior that detracts from the department’s effectiveness (See my posts of Jan. 7, 2006: passive-aggressive behavior; Oct. 10, 2005: succession competition; and Jan. 19, 2008: general counsel as a bully.). What is probably difficult it is for a general counsel of either sex to pick up on aggressive behavior by staff members of the opposite sex.

Richard A. Hall founded and is President/CEO of LexTech, Inc., a legal information consulting company. According to a post April 3, 2008 on Faikah’s Blog, Hall developed a task-based billing model built on extensive statistical analysis of hundreds of litigated civil matters. This would have been a precursor of the Uniform Task Based Billing System (UTBMS).

More interesting to me is the statement that in 1994 Hall invented linguistic modeling software which automatically reads, applies budget codes, budget codes and analyzes legal bill content. The software sounds wonderful, but I haven’t heard of such a capability in actual use (See my post of March 23, 2006: linguistic analysis software for knowledge management.). Humans have to look at bills of law firms if there is to be thoughtful review.