According to the Law of Large Numbers, “you can have a high degree of confidence in the average value of a sample if the sample includes a very large number of observations.” As explained in the NY Rev. of Books, Oct. 8, 2009 at 30, therefore, the more legal departments contribute data to a benchmark study, the more you can rely on the resulting metrics (See my post of Feb. 7, 2008: crowdsourcing depends on the Law of Large Numbers.).

The problem arises when surveyors stop way short of a sufficient number of observations but show high confidence in the results anyway. The facetious invocation of the Law of Small Numbers refers to our tendency to put too much faith in too small a slice of data.

Even while I so much desire even shreds of benchmarks, I bark all the time at sample size (See my post of Dec. 9, 2005: margin of error and sample size; Oct. 31, 2007: formula for confidence levels; April 22, 2007: power tests and sample size; March 28, 2005: number of respondents; Dec. 19, 2007: few participants; and April 9, 2005: few respondents from a large invitee pool.). Still, in a data desert, better Small Numbers than no numbers.

“Longer tenure provides a better understanding of organizational policies and procedures and a reluctance to change past manners of operating.” (emphasis added). This quote from the Admin. Sciences Quarterly, June 1997 at 219, led me to wonder whether management initiatives drop in frequency as of general counsel settle into the organizational saddle. It’s hard to question the familiar world around you; a goldfish never frets about the bowl. What frustrates me is that we simply do not know.

The lacunae of research on managerial change in law departments galls me. We have no informed ideas about the diffusion of innovation, the sources of innovation, the pace of innovation, the timing of changes, or the results (See my post of April 9, 2009: empirical research with 8 references.).

For example, we might all jump to the conclusion that a general counsel who comes in from outside would be more likely to inject new practices than a general counsel promoted from within, one who is indoctrinated in the status quo and mindful of the former peers who would object to change. The newcomer has so much on her plate, such as developing the trust of senior executives, that if its not shattered, leave it alone.

A different jump, however, lands on the conclusion that someone who has long suffered with the dysfunctions of a legal department would be most keen to make changes. We simply don’t know which jump is true.

Another thought or three on why I mistrust palaver about “best practices” (See my post of March 20, 2009: seven objections.).

Best practices give short shrift to context of the legal department that is held out as fostering a best practice, alterable circumstances such as perseverance and the individual champions. More subtly, a law department that adopts a practice brushes away not only malleable context but also given conditions. Size of a company, its corporate history, business conditions, pressures of other executives, talent of individuals are presumed to hold constant for the department that wants to adopt the best practice. Givens can enable or hobble best practices, but are typically ignored by the new adopter.

My second objection to “best practices” is that we define the boundaries of a practice arbitrarily. If you say that competitive bids are best practice, what about related actions just “outside” that boundary, such as preference for incumbents or evaluations of the firms once chosen? Or further “inside” the boundary there are bidders’ conferences and multiple-round bids? Where does a “practice” begin and end?

Third, to evaluate two practices requires a common measure, hence can be done only if the “ends” are intermediate, serving as means to, and deriving their value from, a more general end. That difficulty of evaluating practices renders very suspect statements that any one practice is optimal.

A lawyer’s office is her castle, her sanctuary, her expression of self, not to mention her frequent lunchroom. Having just issued my metapost on physical configurations beyond the office door, here let me zero in on the individual offices of lawyers in corporations (See my post of Sept. 30, 2009: physical components of legal departments other than offices.).

Desks are the dominant furniture in offices (See my post of Nov. 17, 2008: piles on desks and procrastination; and Nov. 8, 2005: mobile desks at SEI.). Next are the chairs at the desks (See my post of Sept. 17, 2009: ergonomic chairs; July 29, 2007: to speed up meetings, do away with chairs; Feb. 7, 2008: infrastructure includes chairs; and Nov. 23, 2008: thermogenesis on a treadmill.). Desks often and offices always have lights (See my post of Dec. 26, 2007: lights and energy-saving; Aug. 4, 2008: better lights for older eyes; and Sept. 22, 2009: dimmers and other light savers.).

On the desks are desktops or laptops in docking stations, each with one or more monitors (See my post of Jan. 18, 2008: multiple monitors; April 27, 2008: flat panels and energy; Aug. 4, 2008: magnify screens; Nov. 9, 2008: double monitors; Aug. 3, 2009: multiple monitors; and Aug. 4, 2009: how and why to add another monitor for your desk.).

One hopes that all these pieces preserve the bodies of their users with physically sensible positions, the purview of ergonomics (See my post of April 23, 2006: ergonomics, including keyboard ergonomics.).

Less common items of offices are headphones (Jan. 18, 2008: headphones.) and artwork (See my post of Dec. 17, 2005: comments on paintings.). The afterthought of office furniture, what might as well be regarded as infrastructure, are piles (See my post of Feb. 2, 2008: piles everywhere.).

This blog has passed on thoughts from time to time about the architecture of law departments (See my post of Sept. 16, 2008: physical layout of offices with 10 references.). It is a rare general counsel who has any significant say in how the overall physical footprint of the department is laid out. Most aspects of infrastructure – hallways, walls, columns, and plumbing – are set in stone, so to speak (See my post of Feb. 7, 2008: infrastructure does not move.).

Despite those constraints, this blog has views on such components as conference rooms (See my post of April 8, 2005: rules for use of conference rooms; May 7, 2006: Computer Associates; and March 1, 2008: reservation systems.) and libraries (See my post of Feb. 24, 2009: libraries with 8 references.).

This blog has comments on other immovables, such as filing shelves (See my post of April 23, 2008: environmental impact of filing cabinets; May 4, 2007: most lawyers prefer piles to files; April 23, 2006: electronic filing obviates paper storage; and Oct. 18, 2006: RFID devices for filing.) and video-conference facilities (See my post of April 27, 2008: video conferencing; Aug. 28, 2008: telepresence; June 22, 2008: as a preferred method to communicate, at 5%; Oct. 3, 2008: ethics training at Lockheed Martin by videoconference; and April 27, 2009: benefits of video-conferences beyond cost control.).

For many fundamental reasons, the practice of law within corporations breeds caution and circumspection. Setting aside whether those who choose to attend law school start off more risk averse, or whether those three years foster it, other forces strengthen the aversion during a career.

1. The world is extremely complicated and unpredictable, so even the most conscientious and painstaking legal research, drafting and thinking can be upended instantly. The best-laid schemes o' mice an 'lawyers, Gang aft agley. Worse hindsight almost always sees what should have been done or known.

2. Unlike good decisions that have a hundred parents, a lawyer’s mistake is an orphan laid squarely at the door of that person. When rewards are shared and setbacks personal, the risks of judgment are asymmetrical (See my post of Aug. 10, 2009: pirates and slaves and individual risk.). Why try something new when the potential target will blaze on your back?

3. Facts are never fully adequate; more else can always be gathered and thought about; closure is never possible for a lawyer with experience, imagination, and a desire to prosper in a career. The downside worry of premature judgment always looms.

4. As with health, clients presume legal competency and are sanctimoniously aroused if something goes wrong. Oblivion holds until the transaction goes off the tracks.

5. Our psychological makeup paints us to remember loss more vividly than gain (See my post of Nov. 17, 2008: gain needs to be twice risk of loss.). We forget the normal and dwell on the unusual, especially damage.

6. Many clients view the role of lawyers to keep them out of trouble. That is a potent sword. Your boss, your paycheck, depend on you, so do nothing rash.

7. All risks are business risks, but the distinction blurs and some decisions, often those that go south, are easily transmuted into “a lawyer’s blunder.” If a visit to the woodshed is in prospect, you learn to be very, very careful.

In my ideal matter the law firm works on it under a fixed fee, so invoices are simple. Real life, however, mostly serves up hourly bills. Each monthly bill is like a layer in lasagna (See my post of Feb. 21, 2007: standardized formats of bills.). The good stuff (cheese, meat, sauce) should be the narrative at the start about the two or three tasks that took the most time during the month and their approximate cost.

More tasty stuff lies at the bottom of the layer with a table that shows each timekeeper, their billing rate, hours and total amount billed. The recap gives additional flavor (See my post of Sept. 28, 2008: the importance of a recap on an invoice.).

In between is the filler, the minutia of daily time entries, the tangle of pasta.

Analysis of writing style on this blog. The most recent 17 pages of posts on this blog amounted to 7,686 words in 332 sentences. Passives were used – sorry, I wrote passive constructions in five percent of the sentences. The Flesch Reading Ease was 46.1 while the Flesch-Kincaide Grade Level was 10.8. A Flesch Reading Ease Score in the range of 40–50 indicates a relatively complex document that might score a 12 Grade Level. The Flesch Reading Ease Score uses the following equation: 206.835 - (1.015 × Average Sentence Sentence Length) - 84.6 × Average Syllables per Word. I love it!

Funding secured by contingent fees. ViaLegal Funding provides attorneys with loans and advances using the value of contingency cases as collateral. http://www.vialegalfunding.com/ This is another example of third-party financing of litigation (See my post of May 21, 2009: lawsuit financing by groups with 8 references.).

More than your individual attributes, your industry and company shape your role as general counsel. Peter Kurer, the former chairman of UBS and before that its general counsel, spoke at the Legal Week Corporate Counsel Forum. He believes that systemic drivers and value influence general counsel more than their individual traits. For example, those serving in regulated industries tend to have more of an important role than those in non-regulated industries. Similarly, lawyers are relatively more important if their industry tends to cartelize.

Termination rates compared to turnover rates. Not hair-splitting, but not profoundly significant, talent mgt. magazine, Sept. 2009 at 32, teaches us that “Termination rates usually refer to the number of employees who have separated from the organization, while turnover rates can refer to separation or to the number of incumbents who cycle through a position due to termination, promotion or transfer.” Benchmark surveys need to define these terms precisely. Termination figures go up one when a person leaves both the legal department and the company; turnover goes up one if that happens or if someone is promoted within the department or moves to a position elsewhere in the department or company. Rotation programs would drive up turnover, not termination (See my post of Aug. 28, 2008: rotations for lawyers with 7 references.).

Disappointed recently with sloppy benchmark efforts by several purveyors, I realized that the law department world lacks third-party assessments of benchmarking efforts. Journalists from time to time go a round or two with data from benchmark surveys, mostly compensation, but they never lay a glove on methodology. Any law firm, vendor, academic, consultant, or trade group can mush together a grab-bag of data, stir it around, and pronounce “findings.” No one vouches for the appropriateness of procedures, the absence of bias, or the plausibility of findings. No one articulates standards of good benchmarking.

Dubious benchmarks thereby become urban legends of management. Loose and unreliable numbers float around. The data debris that results from poorly-executed benchmarking suggests a variation on Shakespeare: “The evil that bad benchmarks do lives after them; the good is oft interred with their bones.”

If you have an interest in outside counsel management, making the most from the talent in your department, or your legal department’s structure, email me and I will be happy to send you any one of my blook’s table of contents and first chapter (tell me which one you want). You can get a sense of the style of the blook and whether you would like to purchase it from my website.