On this blog, the Million Word March – a whole lotta writin’ goin’ on

Through its first 4,500 posts and 52 months, this blog piled up 903,932 words. The Word document in which I have combined those posts has margins of a half inch on all sides and totals 1,456 pages. Metrics nuts will immediately note that the profusion amounts to 0.323 pages per post – three to a page – and 201 words per – two or three paragraphs usually. This post, for example, has 155 words. About 45 of the posts came from guest authors (See my post of July 30, 2009: six guest authors.), but the rest are my responsibility. An additional 32, words and 74 pages cover the 153 most recent posts.

I would have thought I might have suffered by now from episodes of writer’s block. Quite the contrary, piles of material to be writer surround my desk – it’s a case of writer’s blog.

Thank you, contributing (guest) authors on this blog! Are others interested in writing?

Ideas and issues about management of corporate legal functions thrive outside of what I encounter or think up. To help remedy my blind spots, I have welcomed to date and very much appreciated the insights of six co-authors: Brad Blickstein, George Cunningham, Bruce Heintz, Jeff Kaplan, Jane DiRenzo Pigott, and Robert Unterberger.

They have written about their specialties starting as far back as February 2007 (See my post of Feb. 18, 2007: Cunningham on records management; April 27, 2007: Blickstein on vendors to law departments; Nov. 30, 2007: Pigott on diversity; Feb. 16, 2009: Heintz on law firm views of legal departments; Feb. 22, 2009: Kaplan on compliance and ethics; and June 15, 2009: Unterberger on offshoring.).

Other readers have sent me ideas that I have reworked into posts, with full attribution, and I am pleased to do so when material sent to me fits the style and goals of this blog.

If you, reader, would like to grace the screens of this blog, write me. If the material is appropriate, I can edit it or craft one around your ideas and check with you to see if you agree.

Cluster analysis, a statistical tool that could benefit legal department managers

Academics who study the companies in an industry sometimes use a statistical technique called cluster analysis. “Cluster analysis procedures generally use simple mathematical measures of distance or likeness to group individual firms on the basis of how similar or dissimilar they are to one another. The average numerical values on the attributes for the different groupings are then used to infer what the different clusters represent.” The quote comes from Laura Empson, ed., Managing the Modern Law Firm: New Challenges New Perspectives (Oxford Univ. Press 2007) at 163 (by Peter Sherer). What you can learn from cluster analysis is influenced by differences in the magnitude and variance of the attributes.

The chapter cited describes how a cluster analysis was done of major US law firms. A general counsel might prepare a cluster analysis of the law firms retained by his or her law department. If done properly, the analysis might disclose unappreciated characteristics of their size, cost, location, breadth of services, period of representation, leverage and more.

Second, there may come a time when a sufficient set of descriptive benchmarks for legal departments is available. It would then be possible to do a cluster analysis to determine which law departments are similar to which other law departments and in what ways.

Be fair, because, more than you, outside lawyers relive the hurdles they have jumped for you

“I like in-house lawyers to stick to their side of the deal. It is simply unfair when the client expects you and your team to jump to a teleconference on a Sunday, and then pays your bills several months later and after many reminders. It is disrespectful.”

Partners feel their travails. All nighters. Teams assembled quickly. Sudden changes in deadlines or long periods of inactivity. Conflicting instructions, the aggravation of task-based billing, travel late at night, cold pizza in conference rooms, indecisiveness, and endless delays on planes.

The hair-tearing and ulcers of law firm lawyers stick in their minds, but are probably not divulged to clients. In-house managers may be contentedly unaware. Bruno Cova, the former general counsel of Fiat, writing in E. Leigh Dance, Bright Ideas: Insights from Legal Luminaries Worldwide (Mill City Press 2009) at 51, www.BrightIdeasGlobalLaw.com, who is quoted, makes the point of fairness; you need to empathize with the difficulties perceived by put-upon, on-call lawyers at the firms you retain.

A set of this blogger’s basic values and beliefs

Readers of a blog deserve an explicit statement of the value system of the blogger. For those readers who care and who pay attention, they can figure out what I believe. Even so, for the others and for myself, here are several truths I hold to be fundamental.

Inside lawyers serve worthwhile ends and deliver value. They deserve wise management (See my post March 16, 2008: attacks on the morality of law practiced within a company.).

Our understanding of managerial cause and effect is and always will be limited. The many strands of managerial reality are more complicated than our capacity to fully grasp.

People want to do well at work. Most people in legal departments try hard, want to be respected, try to be productive.

Merit matters most. General counsel should promote and give responsibility to the more capable person over the less qualified.

Metrics should inform decisions, even though much of management is not quantifiable.

We can capture, analyze, and convey knowledge, even though post-modernism rings true for me.

Ideas and words change people. We are not just social beings, economic calculators, instinctual behaviorists, or determined ideologues.

The idea of quantifying shifts in responsibilities of general counsel, based on HR departments

Here is an interesting quote from BNA’s HR Department Benchmarks and Analysis 2008: “HR departments are continuing a past decade trend of taking on more and more responsibilities. The percentage of HR departments taking on new responsibilities minus those giving up existing responsibilities has more than doubled during the past 10 years.”

No study has come to my attention that shows the percentage of chief legal officers who have taken on more responsibilities in recent years. A priori one might assume that to be likely as companies have become larger, more complex, and laden with more functions (think of corporate social responsibility or risk management). Still, an overall increase in responsibilities of top lawyers is an untested hypothesis.

Aspects of very large law departments

I have defined a large law departments as one that has more than 20 lawyers (See my post of June 27, 2006: large law departments defined; and Aug. 26, 2006: four largest law departments in France.). The topic is, shall I say large, but I scanned my 4,600 posts and gathered those that use the term “large law department.”

To keep this post manageable, I have not included here the many references to large law departments that involve staff numbers, technology or compensation.

As compared to smaller departments, large ones can support more and different kinds of resources (See my post of March 6, 2007: obtain accreditation for CLE; March 12, 2006: maintain librarians; Aug. 27, 2005: dedicate IT staff; Sept. 10, 2005: stock specialist lawyers; May 1, 2006: run internal think tanks; July 25, 2007: explore alternative fee arrangements; March 9, 2009: come up with slush funds for investments; and May 3, 2008: create internal discovery teams.).

Only for very large law departments are some ideas discussed on this blog conceivable (See my post of Nov. 6, 2006: organizational network analysis; April 26, 2006: internal labor market analysis; June 15, 2008: seed money for technology ventures; and April 18, 2005: administrative function surveyed the legal group.).

Other posts simply comment on aspects of large law departments (See my post of June 15, 2006: managerially more innovative; July 5, 2005: scale advantages and disadvantages; June 7, 2008: use larger law firms; Feb. 7, 2008: large department, but no administrator; Aug. 31, 2005: find more value in tracking time; and July 21, 2008: internal overhead increases.).

From the HR world, a metric of legal spending per capita, but it has little usefulness

A report from BNA, HR Department Benchmarks and Analysis 2008, found the median per capita budgeted expenditure for HR departments was $1,082 per worker in 2006. The counterpart for legal would be total legal spending per corporate worker. I have never seen that figure calculated and analyzed, probably because it neither gives guidance nor allows equivalent comparisons (See my post of April 18, 2009: lawyers per 1,000 employees with 6 references.)

The study, conducted from in mid-2007, gathered usable data from 607 respondents, some of which were in companies with multiple HR departments. The full report is available for purchase from BNA PLUS at (800) 372-1033 and it may suggest other improvements in the arena of legal department benchmarking.

Commercial arbitration can be shockingly costly and the fees are difficult to negotiate

A recent article lambastes commercial arbitrations on the basis of their sometime costs. Writing in the NYSBA J., Vol. 81, July/Aug. 2009 at 30, Ronald Offenkrantz describes the unregulated and often unfettered charges of arbitrators. Various organizations set some rules for their arbitrator members, such as the AAA Commercial Rules or those of the American Health Lawyers Association, JAMS Resolution Centers (JAMS) or the International Chamber of Commerce but arbitral fees can shock clients. In a footnote, Offenkrantz mentions a study by Public Citizen, Cost of Arbitration: Executive Summary (May 1, 2002)(“[a]rbitration costs will probably always be higher than court costs.”).

I am sure there are two sides to this dispute. Granting that point, the advantages of alternative dispute resolution are touted much more than the disadvantages, such as the potential cost (See my post of Jan. 16, 2008: arbitration with 14 references.).

Introduction to organizational capital and legal departments

The following quote comes from Stephen Mayson, writing in Laura Empson, ed., Managing The Modern Law Firm: New Challenges New Perspectives (Oxford Univ. Press 2007) at 152.
‘Organizational capital is thus distinct from both human capital (which is embedded in individuals) and social capital (which is embedded in the relationships between individuals).”

“Organizational capital can be regarded as relating to either or both of: (a) the method of delivering legal services (such as teams, knowledge management systems and routines), or (b) the context for that delivery (such as reputation and brand, culture, contracts, structure, and strategy).”

Legal departments similarly possess organizational capital – methods of serving their clients and contexts. Methods include self serve, lawyers co-located with clients, training, Single Points of Contact, templates and many other resources that help a legal department, as a function, advise and counsel its clients.

Context includes how clients feel about in-house lawyers, competition with outside counsel, alignment with clients, client satisfaction strategies, and the ethnographic culture (the “feel”) of the department.