We too often resort to factually emaciated RFPs, doling out facts on an as needed basis, restricting the questions that can be asked, and limiting due diligence. Telling the firms who are proposing too much takes time, runs risks, and leads to little gain, supporters of limited information would argue. The law firms that bid feel starved for enough data.

A different approach is to sit with key partners of a trusted and familiar law firm, share with them completely your ledgers and matter management information, and hammer out an arrangement based on both sides equally analyzing and understanding the available data.

Moreover, an RFP process can consume huge blocks of time; to circumvent it by negotiations with a known service provider can be very efficient, although it mutes the market discipline of competition. Still, to be able to offer the portfolio of work to other firms always hangs in the background should the negotiations fall through.

The J. of the Legal Writing Inst., Vol. 15, 2009 at 266, tells about asking law school students to try haikus. Seventeen syllables. I tried my hand.

In-house lawyers, Silos or teams, Rules but people, Always altering

Yes, Rees, stick to prose.

A chapter in Robert L. Haig, Ed., Successful Partnering Between Inside and Outside Counsel (Thomson Reuters/West 2009 Supplement), Sec. 78:21.20, describes a long-term relationship between ServiceMaster and Hinshaw & Culbertson. In 2002, the company and the firm agreed that Hinshaw & Culbertson would handle work for a subsidiary based in Memphis. The law firm did not at that time have an office in Memphis. To satisfy the client, the firm agreed the lead partner would spend approximately two days per week in Memphis, at the firm's expense.

If a portfolio of matters taken on by a law firm is sufficiently large, it is quite sensible for the firm to establish an office, or at least a regular and substantial presence, near its primary client’s executives (See my post of April 23, 2007: value of outside counsel proximity; and March 19, 2007: arrangement with distant firms on travel costs to match nearby counsel.).

For the same reasons that nearness matters for external counsel, co-location with key clients matters for internal counsel (See my post of Feb. 5, 2006: proximity; Feb. 12, 2006: proximity of lawyers on the same floor of a law department; July 31, 2005: general counsel who have their offices near their lawyers; June 7, 2006: dueling best practices about contiguous lawyers; Nov. 13, 2006: co-location with clients; Nov. 25, 2005: locations of corporate counsel; and June 20, 2008: GE and co-location of its Pacific lawyers.).

The e-discovery niche, according to the ABA J., Vol. 95, Aug. 2009 at 29, is crowded with about 600 vendors. They are jostling for pieces of a large pie. George Socha, a consultant deeply involved in research about e-discovery vendors, projects that “[C]ommercial spending in this young niche is expected to increase this year by 20 percent to $4.05 billion.”

Stay with the $4 billion projection. If US law firms of the size to handle lawsuits that unleash significant e-discovery have revenue on the order of $100 billion (I think the AmLaw 100 brought in last year about the $82 billion) and we roughly attribute half of that revenue to litigation, then a tenth more goes to vendors of e-discovery software, hardware and services. My assumption is that the costs of e-discovery vendors are passed through to clients, mostly law departments.

What is unknown is the portion of e-discovery costs paid directly by legal departments as compared to paid through law firms as their disbursements.

Finally, I have finished my blog book on effective law department structure. It is 143 pages, including the index. Unlike my blooks on outside counsel management and talent management, this one is written like a book, but with 100 or so blog posts about structure interspersed. It has recommendations and many tables, but is still in a substantial way a framework for blog posts.

If you would like the blook, email me and put in the subject line something about the structure blook.

In a rare departure from my Presbyterian style of just the facts or only the ideas, here is a photograph. That's my wonderful wife, Anne, next to me, lest you be unsure who is who. Just for the record, my little guy, Will, age 6, is not actually brain-dead, but he hasn't learned to adopt the smile-for-the-picture-and-look-normal" pose that adults generally aspire to.

As described in the ACC Docket, Vol. 26, Nov. 2008 at 101, the core law firms of Pfizer – those that make up its P3 group – submit periodic “value reports.” In them firms “identify their respective contributions in the area of savings and benefit to the company.” That’s all it says in the article, so we must bate our breath.

Never one to bate, let me speculate. A law firm under pressure to state something about the savings they have allowed and the benefits they have generated would tilt toward the latter. Insights into tricky situations analyzed, clever solutions proposed, rapid responses turned around, transactions made possible, and risks avoided would appear aplenty. Other than discounts granted, showings of savings would be meager (See my post of Aug. 21, 2009: value compared to fees paid with 22 references.)? Then, what does Pfizer do with all these “value reports?

"Fixed fee arrangements are fundamentally flawed. As soon as you discuss them with the firm, the numbers increase to include the premium and contingency, and hey presto, you're paying more than you should have in the first place." This cynical generalization glowers out of Legal Strat. Rev., Summer 2009 at IV.

The assumption is that hourly billing was the preferred arrangement in the first place (“more than you should have”). That assumption in turn implies that the firm bills honestly and the legal department directs work and reviews bills effectively. The assumption in the statement is also that the firm takes on more risk when it charges a fixed fee so it feels entitled to a premium for taking on that risk. Moreover, neither side has addressed carve-outs, articulated assumptions, or other ways to take account of contingencies (See my post of March 1, 2008: fixed or flat fees with 36 references.).

Although the quote reflects what some general counsel may think, it doesn’t reflect well that they think. It feels to me analogous to the common complaint of law firms that “competitive bids are wired.”

One puzzling finding struck to me when I checked the latest poll results of who visits this blog? As of today, 111 people have responded to my poll on the upper right. Law department lawyers are exactly half of them and law department non-lawyers another 10 percent.

What struck me is that law firm lawyers make up a mere 10 percent. This surprisingly low percentage suggests lack of interest by those lawyers in how their legal department clients operate. Close to a third of the material posted here concerns relations with outside counsel, yet outside counsel don’t seem to care (or they don’t take the time to respond to a two-second poll). Almost as odd, a tiny 4.5 percent of the poll respondents are law firm non-lawyers (presumably, marketing staff). Law firms of any size have marketing support, so why wouldn’t tap in?

The name of this blog may put off law firm visitors. And certainly there are many more blogs aimed squarely at law firms. Still, as I close in on 4,800 posts – a tremendous store of ideas for how legal departments view and use external counsel and even a blog book on the topic – it leaves me wondering why the readership is not skewed more toward law firms (See my post of Aug. 13, 2009 #1: results from 81 respondents; and Aug. 3, 2009: first 50 respondents.). .

Finally, service providers and others make up 19.8 percent and 3.6 percent respectively. It does not surprise me that vendors to legal departments pay attention to material about their prospective and current clients. Prospering from legal departments is a large cottage industry (See my post of June 11, 2008: cottage industry with 34 references.).

Ten more embedded metaposts (See my post of Aug. 14, 2009: Part XXXVII), each conjoined with the number of its back references.

1. Benchmarks hyperpost (See my post of July 19, 2009: ten metaposts on benchmarks.).

2. Email effectiveness rules (See my post of Aug. 26, 2009: 30 e-mail effectiveness tips with 9 references.).

3. Intellectual property metaposts patents, litigation, trademarks, invention (See my post of Aug. 19, 2009 #3: six metaposts on intellectual property.).

4. Legal risk management (See my post of Aug. 17, 2009: controlling legal risks with 13 references and 2 metaposts.).

5. Multi-tasking, multitask (See my post of Aug. 26, 2009: trying to do many things at once with 8 references and 1 metapost.).

6. Myths (See my post of Aug. 21, 2009: myths relevant to legal department management with 9 references.).

7. Process improvement hyperpost (See my post of July 31, 2009: process improvements with 3 references and 5 metaposts.).

8. Scenarios (See my post of Aug. 25, 2009: uses of scenarios in legal departments with 18 references.).

9. Trademarks (See my post of Aug. 19, 2009: trademarks with 33 references.).

10. Value delivered by law firms for fees paid (See my post of Aug. 21, 2009: value compared to fees paid with 22 references.).