My recent post on the importance of “trust” in relation to law firms (See my post of June 20, 2008.) spurred Andrew Shipley, Assistant General Counsel - Litigation for Northrop Grumman Corporation, to respond. He disagrees with my interpretation of the term as a paternalistic relationship between unequals. Shipley makes a good point and I quote his comment in its entirety below:

I couldn't help but think that you may have colored the word "trust" in hues not contemplated by the clients who stated they valued what it stands for. The success of an attorney-client relationship, like any significant relationship in which confidences are exchanged, depends on a number of factors. While the ones you cite, "mutual respect" and "reliance," certainly number among them, so does trust. I don't believe the word connotes only asymmetrical relationships in which one is beholden to or dependent upon the other. I think the concept also applies to relationships between equals (aren't successful marriages dependent to some extent on mutual trust as well as respect?). Simply put, I hire outside counsel I trust, as I believe they will act in my client's best interests. That does not preclude a working relationship based on mutual respect and reliance. It does mean that if we hit any bumps in the road, we are more likely to work them out because of the trust we have in each other to do the right thing.

Some law departments, usually larger ones, prepare a strategic plan (See my posts of May 14, 2005: tools execs use to improve the performance of their organizations.). Various techniques help general counsel craft a strategic plan (See my posts of Dec. 9, 2005: scenario thinking; Dec. 9, 2005: the Delphi method (nominal group technique); Dec. 20, 2005: real options analysis; Nov. 25, 2006: brainstorming; and Dec. 21, 2005: work analysis.).

I am all for managers of law departments thinking long and hard about their current resources compared to their anticipated needs. If that is strategic planning, then go for it! What I question are elaborate processes, PowerPoint, meetings of teams, and formalization of the output in large binders. I have expressed my doubts about the efficacy of elaborate strategic plans (See my posts of Oct. 10, 2005: defects in execution often drag down strategic plans; Dec. 15, 2005: “law-department strategic plan” is an oxymoron; and Jan. 17, 2006: strategic narratives in place of strategic plans.).

In general, the term “strategic” has been sorely overused (See my post of June 11, 2008.).

Talent Mgt. Mag., July 2007 at 44, discusses strengths and limitations of ten techniques to elicit and exchange knowledge. The first technique on the list is “subject-matter expert interviews.” Although I have not heard of a law department that conducts such interviews, they certainly make sense to me (See my post of Feb. 25, 2007: video recordings to capture knowledge.).

The strengths of interviews are that they (1) capture directly what the expert says, (2) can trigger tacit knowledge that might otherwise remain unexpressed, and (3) can link to documents. Limitations include (1) “bandwidth and search limitations can prevent effective dissemination” [which presumably means that people can’t find the interview material] and (2) interviews take place outside the context of the job [which presumably suggests that the knowledge extracted is less practical or relevant].

Among the 16 tools for reducing costs I posted on recently were “rightshoring and outsourcing” (See my post of May 18, 2008: Oliver Wyman’s list.). Presuming that “rightshoring” means offshoring, I rummaged around and found a plethora of earlier posts on offshoring.

For me, outsourcing is a broader topic, having to do with law departments retaining an external provider to do something. Only when the law department hires people in a low-cost country to do the work should the department use use the sub-set of outsourcing, offshoring (See my post of April 27, 2007: outsourcing does not equal offshoring.). Others apply different terms, as in the quote below.

Legal process outsourcing [LPO], according to a provider in Met. Corp. Counsel, Vol. 16, June 2008 at 20, "involves sending domestic legal work (e.g., litigation document review, contract drafting, legal research) abroad to be performed by foreign attorneys, who are billed at a much lower rates than their American counterparts. Most LPO providers … use India as their offshore hub, which offers additional advantages such as a surplus of legal talent, a legal system based on British common law, and a time differential with the U.S. that allows for a U.S./India round-the-clock legal operation.”

Regardless of terminology, here are my compiled posts to date.

Some posts consider the size of the rightshore market and providers in it (See my posts of February 20, 2005: some fire under all the smoke; June 15, 2005: offshoring legal work, $163 billion market; Jan. 6, 2006: offshore legal services from India -- $61 million in 2005; Jan. 28, 2007: five vendors listed as well as an online compilation; Feb. 25, 2007: 16 additional LPO firms; and July 16, 2007: ranking of providers of “legal process outsourcing.”).

The services on offer are varied (See my posts of Nov. 14, 2005: Motorola and patent work; Dec. 12, 2007: IP work; Dec. 6, 2007: Sapient and offshore contact services; Jan. 27, 2008: offshore legal services for CIT: NDAs and email surveillance; May 3, 2008: American Express and patent services and discovery; Oct. 19, 2007: trademark services; and Jan. 27, 2006: law-related services handled in India for US companies: three variations.).

Cost savings from offshoring figures prominently (See my posts of Oct. 10, 2005: India at 10% of the US law firm cost; May 20, 2005: sharing savings with law departments; Sept. 27, 2005 comparative costs; and Feb. 17, 2008: firm gives choice of offshore or onshore staff.).

Many locations in addition to India offer offshore legal resources (See my posts of Jan. 27, 2006: Accenture and Mauritius; Nov. 27, 2007: Israeli offshoring; and April 13, 2008: Kuala Lumpur.).

Not everything is smooth sailing for the offshoring cottage industry (See my postsof Feb. 18, 2007: bar association approves offshore legal services; March 23, 2007: some drawbacks to offshoring; Nov. 4, 2007: challenges of so many recent entrants to the field; May 11, 2007: guidelines for ethical outsourcing; and Feb. 17, 2008 #2: low ratings on effectiveness.).

For an excellent compilation of information about offshoring, visit Ron Friedmann’s blog, PrismLegal.

There, I’ve said it. Plain as day.

Perhaps that is why the blog has been almost barren of references to the function (See my posts of Oct. 27, 2005: whether workers comp claims were in certain benchmark reports; April 23, 2006: metrics on claims that result in litigation; Jan. 25, 2006: whether law departments count workers comp in their reported litigation.)

Although the function can be important and costly, it is rarely part of the law department’s scope of responsibilities (See my posts of May 19, 2006: #4: huge spending by Los Angeles; and April 6, 2007: McDonald’s transformation of its workers’ compensation program.). Some companies even turn to external advisors for this specialized field, one which is mostly administrative and procedural with little need for legal interpretation or dispute resolution (See my post of April 4, 2006 about the specialist company, AHC, Inc. that has resident experts.).

An article in the Harv. Bus. Rev., Vol. 85, June 2008 at 132-3, recommends five principles for companies that wish to fend off patent trolls (See my posts of Jan. 20, 2006: trolls and litigation costs; Oct. 29, 2006: Qualcomm’s business model; May 13, 2007: Microsoft’s patent litigation against trolls; and April 8, 2006: secret governmental patents.).

The fourth principle is for firms to “foster interdepartmental and intercompany cooperation.” One example cited cites law departments: “R&D departments that assign patent lawyers to projects from the beginning tend to produce higher-quality technologies, which they are then better able to protect.”

I wonder what proof the authors have for that statement. If the statement means that patent lawyers take more care to protect the ideas of inventors, that ought to be true. But do patent lawyers improve the actual invention?

The authors continue, “Most firms don’t follow this practice, however, because it’s more expensive in the short run.” Again, where are the metrics that backup this sweeping statement? In my experience as a consultant to law departments, companies that have even a modest flow of patentable inventions set up patent review committees and bring lawyers in for initial decisions about inventions (See my post of March 23, 2008: patent review committees.).

The discipline of evolutionary economics “looks at the economy as an ever-changing, complex adaptive system—not unlike that of biological evolution. Immune systems, language, the law, and the Internet are all examples of other complex adaptive systems. They learn and grow from the bottom up.” This grand concept from Fast Co., June 2008 at 44, suggests a metaphor for how to interpret the constantly changing ties between law departments and the law firms they retain.

The context and content between buyer and service provider evolve (See my posts of Aug. 20, 2006: the evolution metaphor and law department managers. Sometimes people explicitly invoke the metaphor or gradual change toward fitness (See my posts of March 15, 2006: DuPont’s ECA procedures “evolved over the past decade”; April 27, 2007: four changes in knowledge management over time; May 31, 2006: emergent strategy development; Dec. 17, 2007: the morphing of outside counsel guidelines over time.). The concept of evolution applies to workload and capabilities of in-house lawyers (See my posts of May 1, 2005: evolutionary computation as a tool for making decisions; Dec. 11, 2007: evolutionary design and patents; and Sept. 5, 2007: agent-based models of complex systems.).

An arms race goes on between in-house managers of outside counsel and the partners they retain. In the evolution of outside counsel management (or client management from the standpoint of law firms), Darwinian mutations occur as departments and firms produce permutations of countless management techniques and every now and then spawn something new. The article uses an unusual word: “Both evolution and the economy are autocatalytic, which means they each contain self-driving feedback loops.” For example, as law departments demand more detailed bills from firms, firms develop better training for their timekeepers and closer review of their pre-bills. No one imposes change on the players in the legal services market; the changes emerge from the stew of competitive forces.

You may feel smarter just from reading this post!

Much research is underway regarding how our brain operates and what that means for how we can effectively use them (See my posts of Aug. 20, 2006: neuro-economics; and Aug. 16, 2006: another aspect of brain physiology.). I predict that neuro-lawyering, the translation of findings in neuroscience to the practice of law, will become commonplace in the next decade.

Brain research is starting to help us understand some of our emotional reactions (See my posts of Oct. 29, 2006: why pro bono feels good; Feb. 17, 2008: why we pay expensive law firms; June 11, 2007: the sway of well-known brands; and Feb. 12, 2006: the amygdala hijack.).

The more we know about how the brain operates, the better we can understand some of our actions and reactions. Neuroscientists are slowly decoding how the brain handles many things (See my posts of April 19, 2006 and May 3, 2007 #2: choices and conflict between two parts of the brain; May 30, 2006: leadership; May 31, 2006: fear of change; April 19, 2006: our attraction to systemic solutions over personal interaction; April 13, 2007 #3: collaboration; July 10, 2007: our propensity to generalize; March 18, 2005: intuition and decisions; and March 23, 2006: neurophysiological pharmacology and happiness.).

Since thinking and analysis represent two of the most important contributions of lawyers, neuroscience has the potential to significantly effect the way we practice law (See my posts of June 5, 2006: neurological changes as we learn; June 6, 2006: gamma wave bursts precede creativity; June 7, 2006: attention density; May 30, 2006: working memory; and April 23, 2008: schema created by the neocortex.).

Pill-popping to think better may become a common practice for in-house lawyers and the lawyers they retain (See my posts of Feb. 7, 2007: 40 drugs that may enhance cognitive abilities; June 11, 2008 #1: cogniceuticals; Aug. 19, 2007 #2: α2b-adrenoceptor and memory-enhancing drug yohimbine; March 2, 2008 #4: ampakines and the neurotransmitter glutamate; April 22, 2008: caffeine and adenosine; and April 22, 2008: six drugs that may enhance mental abilities.).

Other than swallowing capsules, in-house counsel will start to nurture their neurons in other ways (See my posts of Feb. 25, 2008 and May 2, 2008: exercise jogs a lawyer’s brain; April 27, 2006: brain health and longevity; Aug.19, 2007 #1 and March 25, 2008: transcranial magnetic stimulation; June 11, 2008: glucocorticoids and cognitive degradation from stress; and June 20, 2007#3: arachidonic acid and docosoahexaenoic acids are fat for the brain.).

Many posts on Law Department Management Blog discuss “tools” – discrete techniques or practices that help people in a law department accomplish something (See my post of Oct. 18, 2006: compares processes to tools; April 17, 2007: tools in law departments.). Other posts take up “processes” – steps of a repeated series of actions that lead to an outcome (See my post of April 27, 2006 and June 28, 2006.). But what about law-department management “concepts”?

Concepts are broad ideas. While tools are means to accomplish something and processes are routines, concepts are expansive ideas that encompass many tools and processes as well as considerations about them.

These distinctions between tools, processes and concepts leave something to be desired. For example, evaluations of law firms by in-house counsel is certainly a tool that helps a law department. It is also a process, since there are several steps and participants in evaluations and they are done with some consistency and regularity. At the same time, law-firm evaluations is a concept, with many aspects to it. Which law firms should we assess and on what attributes; how do we convey the results and does an evaluation make a difference?

Another example of this three-way perspective relates to standout performers sometimes referred to as “high potentials.” Several tools apply to high-potential employees, such as how to identify them and accelerate them; there are processes that go along with those tools; and the concept has broad ramifications for talent management and productivity.

The truth is, every tool of a law department, even the most trivial such as a pencil, fits into some process – drafting documents for one – and embodies concepts – communication, expense, training to note three. By contrast, game theory is purely a concept.

It is all too easy for the law department to don the mantle of responsibilities that have legal elements, but should be handled by others. This creeping legalization applies to such functions as electronic discovery, compliance, risk management, records management, contract administration, equity awards oversight, workers comp, and ethics.

Each of those areas undeniably has laws or regulations that need to be understood and enforced, but the onus of responsibility ought to lie elsewhere than the legal team. To assign responsibilities to the law department that are removed from its core competency – to legalize a function – warps the role and effectiveness of internal lawyers and erodes the obligations of other groups within the company.