Having collected posts on several other legal departments whose management efforts have been well-publicized, I decided to tally them for Microsoft. Setting aside any references on Law Department Management Blog to the software licensed by Microsoft, I found 30 references to what that company’s enormous and active legal group has pursued. The posts cover almost every category on this blog, so I have organized them in chronological order within the categories.

Two posts hinge on benchmarks (See my post of Aug. 3, 2005: patents per billion dollars of R&D; and Aug. 4, 2005: benchmark study spurs more patents.).

Others cover cost controls (See my post of June 15, 2005: outsourcing to reduce costs; Nov. 3, 2005: savings on e-billing; May 13, 2007: litigation against patent trolls; Nov. 11, 2005: $100 million spent on patent litigation; and Sept. 3, 2008: savings from offshore patent support.).

The category of outside counsel was under-represented (See my post of Jan. 4, 2006: dealing with firms across borders.) as was productivity (See my post of July 21, 2005: collective activity with GM and Cisco.).

Structure has the most blog entries regarding Microsoft (See my post of Aug. 27, 2005: law department includes government affairs; Aug. 27, 2005: supports own IT staff; Dec. 19, 2005: a legal and corporate affairs department of 850; April 30, 2006 #5: “procurement manager”; Aug. 8, 2006: its top lawyer in Europe; Jan. 4, 2006: Deputy GCs; Feb. 7, 2007: IP czar appointed; and Jan. 11, 2009: staff foreign offices first with generalists.).

Technology – well, we should expect Microsoft to excel (See my post of Jan. 4, 2006: uses document assembly; April 9, 2006: joint portal development; May 16, 2006: survey by Microsoft found that matter management systems are the least successful technology; Feb. 6, 2007: uses DealBuilder software; April 8, 2007: law firms help with rule-based drafting; Dec. 11, 2007: software to classify patent portfolios; and May 3, 2008: internal blogs.).

Talent, too, had a cluster of posts (See my post of April 6, 2009: Brad Smith as one of 20 most influential GCs; June 9, 2009: three tenors and also GC of Microsoft; May 2, 2008: employee-satisfaction poll; May 3, 2008: GC has monthly breakfasts with staff; May 8, 2008: online tool to allow comments after Town Halls; and Dec. 5, 2008: contributions as sponsor of conferences.).

The War of “Legal” Department vs. “Law” Department! The brawl over “Associate” vs “Assistant” General Counsel!! The vicious struggle between backers of general counsel (plural) and general counsels. The endless and cruel conflicts over word choices that go to the heart of one’s self and the meaning of life.

So, to hyphenate or not to hyphenate. The ultimate arbiter, the uber-crowdsource, Google, reports that a search for “in-house counsel” returns 638,000 hits. A search for the unhyphenated twin, “inhouse counsel” returns a meager 12,500. A 50-to-1 lead trumps even election returns in Iraq!

But solid empirical research demands more. “Inhouse lawyer” has 10,200 hits; “In-house lawyer” has 74,500 (7-to-1 ratio). “Inhouse attorney” barely registers at 809; “In-house attorney scales 62,100 hits.

I make the tough calls and I call them right: hyphens by a huge point spread, you in-housers!

Of the more than 300 metaposts I have compiled, 40-50 related pairs of them I have combined into what I refer to as Metapost Pluses. Each Metapost Plus has more than 10 posts, organized logically, and with several recommendations at the start for general counsel. Eventually, I hope to send updates to those who request a Metapost Plus by email.

My first four that are available, at no charge, are:

Convergence Discounts Evaluations of law firms Fixed fees

More Metapost Pluses will come online as I work my way through their preparation.

A recent survey of senior in-house attorneys asked them to select the obstacles they face to making effective use of productivity metrics. The survey, by LexisNexis CounselLink entitled “Effects of the Current Economic Downturn on U.S. Law Departments” 2009 at 17, offered respondents six choices. I have listed them in order of frequency, with the percentage of respondents who marked that choice in parenthesis. My comments follow.

Time (22%) – competing demands for time always dogs in-house lawyers. For some managers, the opportunity cost of collecting, vetting, analyzing, and acting on metrics stands out more prominently than the hoped-for gains (See my post of Sept. 9, 2008: opportunity costs of information can be calculated.).

Accuracy of Information (19.8%) – garbage in, garbage out and the costs of verification

Having the Right Tools (15.4%) – a matter management system is a prerequisite

Type of Information (9.9%) – often law departments track what is not useful (hourly billing rates, according to the survey, for example) and fail to tackle harder-to-quantify information that is useful, such as productivity or risk

Communication (7.7%) – I think this may mean to most people the challenge of conveying the results of metrics tracked effectively

Budget (7.7%) – can you afford the people and technology to track metrics

What is missing is “Acting Productively on the Metrics”. It is easy to collect metrics, hard to act.

I woke up this morning thinking of “To sleep, perchance to dream of law department management effectiveness.” Later, I hunted through my archives to find my posts on slumber (See my post of May 2, 2008: sleep enhances memory; Nov. 7, 2007: sleep relieves stress; Feb. 20, 2007: sleep on it to make a good decision; Aug. 26, 2008: sleep-deprived associates; Dec. 5, 2007: circadian sensitivity; March 5, 2009: work and study when you are sharp; and Jan. 30, 2009: Mark Gluck on benefits of sleep for mental sharpness.).

For the beverage that counters sleepiness, this blogger has brewed several gulps of posts (See my post of Dec. 19, 2007: grounds for insight; April 22, 2008: caffeine and adenosine; and July 13, 2008 #1: coffee slows mental decline.).

Now, back to dreaming about grande vanilla lattes, extra hot.

A large legal department has claimed savings of tens of millions in a year by an interesting calculation. The calculation starts with the total hours billed to clients by the department’s timekeepers (both lawyers and paralegals). [Yes, the department makes its professionals track their time and charge it to clients.]

Those hours billed totaled what the department states are its internal costs. Simple division shows that the blended rate was about $200 an hour, meaning that lawyers alone were likely to be around $250 an hour.

The interesting twist is that the department matches its internal hours worked to the hourly rates of outside counsel and paralegals at what they deemed to be equivalent levels. By doing so, the department has made much of the claim that if the company had used law firms to do the same amount of work, the company would have paid scores of millions more. Stated differently, the differential between the blended hourly rate of its law firms and its internal, comparable rate, is huge.

The calculation and claim raises a host of Issues. Does the department include the full costs of its inside counsel, especially the reality of their asserted chargeable hours? Companies staff for valleys of work so a premium for overflow makes sense. If the department chooses expensive firms, the “savings” look larger. Are the lawyers actually doing the same work?

Almost 200 senior in-house lawyers responded to a survey question that asked them to identify which “tracking metrics” they currently use. The survey data is courtesy of LexisNexis CounselLink study, entitled “Effects of the Current Economic Downturn on U.S. Law Departments” 2009 at 14.

The eighth most frequently tracked metric (16.8% use it) is “documents/transactions completed.” This metric jumped out at me because departments have to have at least a rudimentary matter tracking system to be able to count documents/transactions completed. Further, I suspect that it really means “matters” completed, where a “transaction” equals a “matter.” To count contracts completed would be highly unusual, let alone the broader range of “documents” such as correspondence and memos.

Also deserving of comment are the two data analytics of “cost vs. average for similar matters” and “time spent vs. average for similar matters.” Each metric being used according to about 13 percent of the survey respondents, it means those legal departments have calculated averages for amounts spent and hours by outside counsel. If that is true and representative, fixed fees should be much more accepted since the departments would know approximately what a matter should cost and the distribution of cost outcomes. I doubt this.

The third metric of note is “measures of risk,” which 16.8 percent selected. This data set mystifies me, since risk is so hard to quantify (See my post of March 23, 2008: risk management with 18 references.).

“As a large company, we use three systems for tracking and managing matters. There is a [commercial] legal software system, a Lotus-based system, and a homegrown system. We also overlay the use of Excel for tracking spending by division, by matter and by other indicators.” This eyebrow-raising admisssion comes from the LexisNexis CounselLink study, entitled “Effects of the Current Economic Downturn on U.S. Law Departments” 2009 at 12.

Surveyors usually presume a single matter management system per department, but as the example shows, it is quite possible to have more. Legacy systems still online, overlapping systems in acquired business units, and specialized applications can swell the number (See my post of Aug. 5, 2008: matter management systems with 35 references.).

The same survey that stimulated my ruminations on the meaning of “foreign law firm” (See my post of June 26, 2009: the term “foreign law firm”.) offers more data on those firms. According to Met. Corp. Counsel, Vol. 17, June 2009 at 11 (Marcus Linden), based on a survey population of 191 US legal departments, “The average number of U.S. law firms supervised was 38.6 firms per law department, and the average number of foreign firms was 18.9 per department.”

It surprises me that the US legal groups retain about one foreign firm for every domestic firm. I would have thought that domestic firms would significantly outnumber foreign. On the flip side, if a company does business globally and has only one or two firms per country, the number of foreign firms mounts rapidly.

Of the dozen “strategies” ranked by legal managers in terms of frequency, no unusual actions stand out, until the final three. As expected, the LexisNexis CounselLink study, entitled “Effects of the Current Economic Downturn on U.S. Law Departments” 2009 at 9, found that its 191 in-house respondents in-source work, ask for non-hourly billing, re-negotiate rates, and review invoices more carefully.

What stood out for me was that 10 percent of the respondents selected “Outsourcing Legal Work to Offshore.” Since nearly half of the respondents work in small legal departments, the percentage strikes me as unexpectedly high.

Also notable are the final two choices: 8.4 percent chose “Upgrading Commercial Payment Systems” and 7.3 percent chose “Upgrading Internal Payment Systems.” It’s hard to figure out what these strategies mean, other than efforts to obtain prompt payment discounts.