Cell phone calls by lawyers and their locations may some day automatically record data to time tracking systems. That prospect becomes clear from a disturbing item in the Lond. Rev. of Books, Vol. 30, Aug. 14, 2008 at 24.

Here is an illustration. If the partner you rely on has a late-model iPhone you can locate the partner as a bright green dot on a map. The location information is available to anyone with the required resources to make use of it. Moreover, since the origin, destination, time and duration of cell phone calls are all logged, it will be technically possible for a law department to compile data on all calls by timekeepers at law firms who work on its projects. Eventually, e-billing vendors will collate cell phone usage and location to time entries on invoices, or bypass them altogether and collect them independently (See my post of May 19, 2006: disparages real-time billing information.).

The general counsel of General Electric advocates doing more work within the law department than did his predecessor. Setting aside the skeptical inquiry – “How do you measure this statement?” – let’s take on the three advantages he states, very clearly, for doing legal work in the law department.

His three reasons, set out in Met. Corp. Counsel, Vol. 16, Aug. 2008 at 1, are that “you have more control over the quality, more control over the efficiency with which the work is done, and the people who are doing the work are closer to the business and the issues in the business.”

Quality means that you can assign the best person (or persons) to the issue and they can work on it until they are satisfied with the result. Law firms may find that their lawyers who know an area of law are already committed to other clients and can’t help sufficiently. Also, given high billing rates and a smidgeon of concern about costs, law firm partners may not unleash the dogs of law to bill until they are satisfied.

Efficiency means that the time and money devoted to the legal issue more closely corresponds to the importance of the issue to the company than if a law firm handled it. Firms have marketing agenda, training needs, internal politics, revenue goals, malpractice concerns, and other diversions and detours that may encrust their work and drag down its efficiency.

Closer to the business and its issues means that inside counsel can more readily match the legal solution and the effort to reach it to the commercial realities – such as profit and loss or customer retention – of their business manager clients. Outside lawyers can’t as intimately know the ins and outs of people, processes and profits in a company.

A commonly discussed method to reduce costs and increase quality is to collect finished work product from law firms and make it available internally and externally. That effort sounds solid, well worth doing, but in fact usually languishes (See my post of Aug. 22, 2006: futility of collecting work product from outside counsel; Dec. 19, 2006: don’t expect a return on investment if you save law-firm work product; Aug. 16, 2006: conflicts of interest when sharing work product among firms; May 17, 2006: sharing work product among Schering-Plough’s primary firms; March 15, 2006: irregular quality of work product from large, international firms; and July 7, 2008: easy to underestimate the effort that went into delivered work product.).

Work product generated either internally or externally comprises much of what is thought of as knowledge management material (See my post of March 23, 2006: concept search software applied to department’s work product; and Feb. 6, 2008: Google offering that culls work product.). Quality control presents one challenge to doing this (See my post of Nov. 20, 2007: collective, anonymous grading of internal work product.).

Work product is sometimes collected and made available through a document management system (See my post of Dec. 6, 2007: document management with 15 references.)

Ideas for this blog come from everywhere, but some sources turn up thoughts much more commonly than other do (See my post of Nov. 13, 2007: publications I cite regularly.). One of my troves is the series from K&L Gates (formerly Kirkpatrick & Lockhart Nicholson Graham) where they publish relatively short observations from various general counsel. The firm calls its series top of mind.

Ten times I have drawn on points made in the series (See my post of Dec. 21, 2005: culture at Phillips; Dec. 6, 2007: contracts and offshore services at Sapient; Jan. 30, 2006: methodology comments; Dec. 17, 2006: ADVO and its solo general counsel; Jan. 30, 2006: attributes of outside counsel selection; Dec. 17, 2006: micro-managing outside counsel; Dec. 17, 2006: Radio One and “majors”; Dec. 17, 2006: Affiliated Computer and contractual flexibility; Dec. 21, 2005: Ascential Software and “majors”; and Dec. 21, 2005: cultivating regulators.).

Susan Neiman’s Moral Clarity: A Guide for Grownup Idealists (Harcourt 2008) emphasizes the principle of sufficient reason. It is the idea that whatever happens can be explained (at 131), that everything happens for a reason (at 138). That principle is the basis for the structure of reasoning itself.

When I blog, I assume there is an explanation for something done experienced by a department, or some set of benchmark metrics, or some change in the legal industry. The explanation may be complicated; it may be subtle and multifarious; it may well be beyond my ken. But it is there as I believe in the principle of sufficient reason.

Hand in hand with the principle of sufficient reason goes Occam’s Razor: the simplest explanation is likely to be the best one. Accordingly, I try to give an explanation for law department occurrences, and the simpler the explanation, the better.

Delegate! Everyone hears that exhortation; most in-house lawyers find delegation hard to do well. The reputed advantages of delegation are self-evident (See my post of Nov. 7, 2007: delegation alleviates stress; Nov. 6, 2006: delegation increases efficiency; and Dec. 3, 2007: an advantage of larger law departments.) but translation of theory into practice falls short (See my post of Aug. 2, 2006: challenges of delegation; May 23, 2008 #4: information theory and loss of information through delegation; and March 9, 2007: why attorneys are reluctant to pass down work.).

Also hard to do is to pin down which entries on this blog pertain specifically to the notion of delegation within a legal team (See my post of Aug. 26, 2006: a definition of “delegation”; and May 16, 2007: delegable tasks.).

The most closely related posts refer to the assignment of tasks to another, more junior person within the legal department (See my post of April 17, 2007: delegating contracts work; Oct. 20, 2005: delegating budget responsibility; Aug. 26, 2005: measuring delegation to paralegals; March 25, 2005: delegating to interns; Sept. 5, 2007: shifting work to administrative assistants; and May 16, 2007: long-term cost reductions through extensive delegation.).

My difficulty with compiling this embedded metapost stems from how hard it is to decide where to draw the line. Delegation of work in a law department touches on many broad topics. For example, everyday tasks are promising candidates for delegation (See my post of June 6, 2008: commodity, standardized and routine work; Sept. 13, 2006: commodity legal work with 5 references.)

Some of the benefits of knowledge management show up in delegable tasks. Levels and support staff in departments bears on delegation as does the notion of quasi-legal work, which clients should do (See my post of April 9, 2008: quasi-legal tasks with 14 references.)

Offshoring constitutes still another manifestation of work delegation (See my post of Dec. 16, 2007: offshoring with 18 references.).

Indeed, whenever an in-house lawyer hires a law firm, that person has delegated work. For this post, I stuck with the narrower instances of delegation down within a department.

This blog has been around and around on job rotations in law departments. A trio of law departments have been cited for their specific practices (See my post of Feb. 16, 2007: Philips and recruitment; April 13, 2006: rotations from specialist positions to generalists at Philips; and Dec. 28, 2006: Diageo and job swaps.).

Other posts comment on a range of points regarding job rotations (See my post of April 8, 2005: through head of administration for the department; Aug. 4, 2007: GCs who rotate out of legal for a period of time; April 27, 2007: knowledge of a foreign language helps; and Aug. 26, 2007: rotations as experiential learning.).

Previous posts have addressed different aspects of the fully-loaded cost per hour of corporate counsel (See my post of Oct.18, 2005: how to calculate a fully-loaded cost per lawyer hour; Nov. 16, 2005: links to other posts; Nov. 16, 2005: about $190 an hour; and Jan.10, 2006: estimate for US law departments of $150-170 an hour.). In November 2007, I published an article about the three most important benchmarks for law departments, one of which is the fully-loaded cost of inside counsel.

The fully-loaded cost of your lawyers on a per-hour basis with all expenses of them included is a vital metric. Partly is it important because that cost is a fixed cost and lets you compare your rate to the rate of outside counsel (See my post of Feb. 18, 2006: fixed versus variable costs; Aug. 14, 2006: estimate of $270 an hour for effective rate of outside counsel; Sept. 5, 2005: European law departments at about $220 an hour; and Feb. 21, 2008: a UK figure of about $151 an hour.). Important as the metric may be, it still presents several methodological monsters to slay.

The first issue is how to define a chargeable hour (See my post of Nov. 20, 2006: low estimates of chargeable hours in British law department; and Oct. 30, 2005: administrative time squeezing out substantive time.).

The second issue is how many chargeable hours a typical in-house lawyer works (See my post of Sept. 25, 2005: 1,850 chargeable hours as a proxy; Feb. 17, 2008: 1,850 may be too high a figure; Feb. 25, 2008: wasted time per day; and Aug. 21, 2008: leisure time-wasters for workers.).

The third issue is what expenses should properly be included. Mostly they are compensation (See my post of Jan. 27, 2008: nearly three quarters of internal budgets are paid to employees.). Several posts have explored the other law-related costs that swirl in a poorly-defined, poorly-captured cloud around the harder numbers of compensation, benefits, travel, telecommunications, and the like (See my post of Aug. 5, 2005: how to calculate the fully-loaded cost and what are some of the missing elements ; and Jan. 6, 2006: impossible to track all costs of a law department.).

Many expenses related to in-house lawyers could be included (See my post of July 20, 2005: internal costs of responding to litigation, July 25, 2005: costs of independent directors’ counsel; Aug. 3, 2005: valuations of options and stock grants; July 27, 2007 on valuing options; Aug. 15, 2005: facilities costs; Oct. 4, 2005: insurance premiums; July 26, 2008: benefits with references cited.)

The fourth issue is whether fully-loaded cost per lawyer, as compared to per legal staff, is best
(See my post of May 14, 2006: changes in leverage alter fully-loaded lawyer cost; Nov. 26, 2006: extensive use of contract lawyers; May 16, 2006: better to use cost per legal staff; and Jan. 30, 2008: high-level inside lawyers and their costs per hour.

Once you iron out the methodological niceties, the fifth consideration is what use to make of the metric (See my post of Dec. 16, 2005: consequences of understating this metric; Nov. 16, 2005: how to use your metric of fully-loaded cost per lawyer hour; May 3, 2008: compare your internal rate to effective billing rates of your firms; and June 19, 2006: unfair to compare average partner rates.).

The return on investment of all kinds of activities depends on this cost metric (See my post of Sept. 14, 2005: invoice review; Feb. 4, 2008: cost per corporate entity maintained; Jan. 16, 2006: patent application time consumed; April 3, 2005: savings from technology; and Feb. 21, 2008: PDA effectiveness. Courts sometimes award fees based on it (See my post of Jan. 1, 2008: lodestar for court awards of fees.).

Fascinated as I am with vocabulary, I relished this paragraph. It comes from a book by Laurance Urdang, a word-lover who died recently and was eulogized in the NY Times, Aug. 26, 2008 at C10 (See my post of Aug. 12, 2008: unusual vocabulary on this blog.).

“This is not a succedaneum for satisfying the nympholepsy of nullifadians. Rather it is hope that the haecceity of this enchiridion of arcane and recondite sesquipedalian items will appeal to the oniomania of an eximious Gemeinschaft whose legerity and sophrosyne, whose Sprachgefühl and orexis will find more than fugacious fulfillment among its felicific pages.”

But of course.

My spell checker shouts at me for nine words in that rare collection. More amazing is that it accepts four or five words that are far, far out on the long tail of English vocabulary.

John Rawls, one of the foremost American philosophers, urges us to think about justice from a standpoint he calls the original position. As explained in Susan Neiman’s Moral Clarity: A Guide for Grownup Idealists (Harcourt 2008) at 212, the original position asks you, “How would you design a society if you didn’t know who you would turn out to be in it?”.

A general counsel of a like philosophical bent might thoughtfully ask, “How would I design my law department if I didn’t know who in it I would be?”

Since the general counsel might be reincarnated as a file clerk, that perspective should encourage open communication, merit-based promotions and assignments of responsibility, tolerance, encouragement of everyone to develop their highest and best capabilities, equity and fairness, and supportiveness.

Would that it were true.