The Practical Law J., Vol. 1, Nov. 2009 at 70, describes several aspects of the 100-lawyer department of Computer Sciences Corporation (CSC), primarily those related to its current strategic plan (See my post of June 25, 2008: strategic plan with 10 references.).

My first observation is that CSC’s legal department has a three-year strategic plan, “endorsed by CEO Mike Laphen.” If the CEO reviews and approves a legal group’s plan, the plan takes on much more significance and its goals are likely baked into some personal objectives of key lawyers.

I have scoffed at a five-year plan for a legal department, but at the same time I believe that if you take the time to prepare a plan you realistically need a horizon of more than one year (See my post of Jan. 8, 2009: Borealis’s five year plan.). Three years might be the most plausible time period for achieving change (See my post of July 26, 2008: InBev’s three-year plan; Dec. 29, 2008 #1: business plan for one year; strategic plan for multiple years; Jan. 23, 2009: patent on a law department process for strategic planning; July 4, 2009: online game to prepare a strategic plan; and Oct. 4, 2009: Novartis’ strategic plan for legal.).

The general counsel of CSC has tasked the department’s Global Managing Attorney (Tres Lorton) with lead responsibility for implementing the strategic plan and two other senior managers are part of Lorton’s team. If you want to make something happen, such as a multi-part strategic plan, designate one person to be in charge and hold that person accountable.

An article in the Practical Law J., Vol. 1, Nov. 2009 at 70, offers a benchmark calculation about Computer Sciences Corporation (CSC). That calculation creates an opportunity to reflect on the shortcomings of the common benchmark, lawyers per billion. At $16.5 billion in revenue and around 100 in-house lawyers, CSC employs six lawyers per billion, perhaps a bit below the typical figure you find in technology companies.

When you think about that metric – lawyers per billion – for law departments generally, you realize its infirmities. Fundamentally, it leaves out the support staff who can make such a difference in the productivity of those lawyers (See my post of Oct. 27, 2009: one-to-one ratio.). With that omission, what is also lost is the more nuanced understanding of specialty roles, such as IT support, knowledge managers, paralegals experienced in various practice areas, and electronic discovery mavens.

Not that any benchmark metric can bear more than its weight, but going further, lawyers per billion of revenue takes no account of where the lawyers are located (See my post of Jan. 16, 2009: decentralized law departments physically with 13 references.).

Nor does that metric convey anything about the reporting structure of the lawyers, which can be flat, or very hierarchical, or many variations in between, and these days often matrixed. Lawyers per billion is also vulnerable to eliding the distortions of secondments, interns, temporary lawyers, and other contract personnel.

Even with these criticisms, the hoary metric has a common currency among general counsel and serves a useful purpose.

Professionalism runs rampant in legal departments – not just lawyers. More and more members of legal departments at least have the opportunity for additional education and recognition as a trained person in their area, a hallmark of professionalism. This idea came to me from an article on the rising level of professionalism in nonprofits and its rationalizing effect on how they are run, all in Admin. Sciences Quarterly, Vol. 54, June 2009 at 268. Somewhat similarly,

E-discovery experts can take courses and be recognized;

Paralegals can earn certifications (See my post of March 23, 2006: certificates of paralegals; and March 19, 2006: certified legal assistants are as common as non-certified.);

Lawyers and others can obtain MBA’s (See my post of Dec. 31, 2006: JD/MBA degrees; Dec. 20, 2005: administrators with MBA’s; Nov. 25, 2006: UK MBA for in-house lawyers; June 16, 2006 #3: another UK MBA course; April 12, 2006: program in US for in-house MBA; Feb. 13, 2008: ACC’s Executive Leadership Institute; June 15, 2008: dozens of Caterpillar lawyers earned MBAs; Dec. 23, 2008: ten administrators in survey had MBA; May 7, 2009: GC invested in MBA; and July 13, 2009: repayment expectation.);

Outside counsel cost managers will someday have specialized training;

Project managers avail themselves of training (See my post of June 24, 2007: project management with 5 references.);

Six Sigma belts hang everywhere (See my post of Feb. 13, 2008: Six Sigma with 18 references.); and

IT credentials already abound, such as being a certified LAN specialist.

The level of training among members of legal departments will certainly rise during the coming years (See my post of June 15, 2008: executive education with 8 references.).

An article in the Admin. Sciences Quarterly, Vol. 54, June 2009 at 282, describes an index to measure how even or skewed distributions of nonprofits funding were from multiple sources. The same formula should describe the distribution of spending by a legal department on, say, the 20 law firms on which it spends the most during a fiscal year. [I picked 20 simply to create a cutoff point and because most law departments in fact engage 20 or more law firms each year.] If several departments computed the figure, we could have a benchmark figure for concentration of outlay on law firms.

The formula is n 1-[Σ(1/n-Si)2 ]*n/(n-1) i=2

where n denotes the total number of law firms paid (20) and Si is the proportion of spending on the ith law firm in the total spend (for example the percentage of total fees paid to the 20th firm). [This blog can't show the little i=2 under the brackets or n over the brackets]

Let’s assume for a particular law department that the 20th firm down the list received 0.5% of the total spend of firms on the list. Thus, (1/30-0.5) squared *30/29= 0.00115. You do that calculation for each of your top 20 firms and subtract the total sum from one. The Greek letter sigma means you subtract from one the sum of all those calculations for each of the 20 firms.

A law department that spends evenly on all its 20 primary firms would score 1. With this formula, law departments would have comparable figures for benchmarking dispersion of spending on outside law firms.

An article in the Admin. Sciences Quarterly, Vol. 54, June 2009 at 272, somewhat ponderously defines strategic plans as “formal documents that articulate organizational goals and the means by which to achieve them over a specified period of time and propose to promote effective management by prioritizing goals under resource constraints.”

For a chief legal officer, the unpacked version of that sentence means the department’s strategic plan (1) states in writing (2) the goals the department wants to achieve and (3) how it will achieve those goals during (4) a year to five years and implicitly (5) what goals it will not try to achieve in light of (6) limited resources.

It is not enough to record the aspirations of the department; the plan must also explain what the department will do (with individual accountabilities and milestones in the better plans) to get there. A strategic plan needs a timeframe, be it one year or five years, and to be realistic it needs to acknowledge that not everything can be accomplished; some things must go. The plan should be a roadmap for a relatively few, specific priorities (See my post of June 25, 2008: strategic plan with 10 references.).

I have written frequently about correlations (See my post of Feb.13, 2008: correlations with 16 references.). What I haven’t explained is how to find out whether a correlation is one that you can rely on.

The statistician’s term is “statistically significant,” a standard that has three components. To explain them let’s start with a correlation, such as between median partner hourly rates and median associate hourly rates. You collect that data for 20 law firms, enter it into a spreadsheet, and use a built-in function to calculate the correlation between the two sets of figures. The correlation is 0.45. How confident can you be that the correlation really means something and isn’t just some chance finding? I found a very clear explanation online of statistical significance and tinkered with it.

The easiest way to find out is to look in a statistics book that has a table of critical values of r (the correlation figure, here 0.45). You need to decide on a significance level, which is commonly called alpha and set at .05. This means that the odds that the correlation is a chance occurrence are no more than 5 out of 100.

You also have to compute something called the degrees of freedom or df. The df is the number of data points you have less two (=N-2): in this example 20-2 = 18. The more data, the more reliable the findings. For the third component you have to decide whether you are doing a one-tailed or two-tailed test. In this example, since you believe the relationship between partner rates and associate rates is positive, youl opt for the one-tailed test.

With these three pieces of information -- the significance level (alpha = .05)), degrees of freedom (df = 18), and type of test (one-tailed) – you can look up the significance of the correlation you found. Online sites will calculate it for you, such as Vassar’s.

On a lark, I ran a Google search for the combination of “law” and “matter management system.”

In the sponsored links at the top, first came LexisNexis’ CounselLink, followed at number four by Bridgeway’s eCounsel, and number six EAG’s CaseTrack. The other top links were not for matter management software for law departments (See my post of Aug. 5, 2008: matter management systems with 35 references.).

Rerunning the search with the term “legal” found Mitratech’s TeamConnect.

Sponsors of links pay for the privilege, which is probably why several other leading matter management systems did not show up. These vendors include doeLegal, LawTrac, Serengeti, and TyMetrix.

Several posts point out the vulnerability of general counsel when the CEO leaves (See my post of May 14, 2005: GC vulnerable when CEO is removed; June 20, 2007: most risk to GC when new CEO comes from outside company; and Nov. 7, 2007: GC depends on fortunes of CEO.).

Several items on this blog make different points about the CEO’s right to anoint a general counsel (See my post of May 30, 2005: CEO and choice of external counsel; June 5, 2006: Boards and CEOs commonly designate a GC successor in the event of an emergency; CEO hires GC from outside; March 1, 2007: should Board or CEO select general counsel; Nov. 21, 2008: most CEOs have never hired a GC; April 28, 2009: Board vs CEO in hiring GC; and June 16, 2009: right of Board to replace GC.).

The views CEOs supposedly hold about their legal function appear at times (See my post of Aug. 14, 2005: CEOs think general counsel should spend more time on governance; Oct. 23, 2005: survey of CEO’s views; June 11, 2007: CEOs pick out risks, including legal; May 16, 2007: CEO (Chairman) of Chevron wanted a world-class law department; Feb. 23, 2009: Google’s CEO – hire lots of lawyers; Aug. 15, 2008: to whom is GC most accountable, views of GCs and CEOs; and July 29, 2007: views of retired CEO of Lockheed Martin.).

To my surprise two posts refer to CEO’s and outside counsel selection (See my post of Oct. 23, 2005: CEO’s involved in selection of law firms; Nov. 11, 2005: involvement in choice of outside counsel;

As with all metaposts, the leftovers fall into every which topic (See my post of July 31, 2005: proximity of GC’s office to CEO’s; Jan. 4, 2006: to shake up department, Feb. 10, 2007: CEO is a notable constraint GCs operate under; May 28, 2007: how often does CEO talk to GC; June 20, 2007: no-surprise rule; Jan. 30, 2008: Textron CEO praises law’s Six Sigma effort; Nov. 16, 2008: do some CEOs mistrust high-powered law departments; April 24, 2009: median pay of CEOs and GCs; and Oct. 4, 2009: Continental CEO gives a time budget to his direct reports.).

Omitted from this metapost are references to posts that talk about (1) general counsel who became CEO, (2) general counsel who report to CEOs who are lawyers, and (3) what functions report to the CEO.

The paleontologist Stephen Jay Gould popularized the theory that evolution proceeds from relative dormancy sometimes by leaps and bounds. Punctuated equilibrium, Gould named it, and the idea spread far beyond fossils and Darwin.

Punctuated equilibrium may be an apt metaphor for legal departments. For long periods a department sails along, getting the work done, keeping relationships on an even keel, at a moderate level of pitch and yaw. Then equilibrium is punctured by a huge wave. Dramatic changes occur when:

A new general counsel comes onboard (See my post of Aug. 5, 2007: when to survey clients for satisfaction; Aug. 1, 2006: some consequences of a new GC from outside the company; Dec. 14, 2005: effect of the arrival of a new general counsel on outside counsel; March 7, 2006: more effects on law firms; May 14, 2006: major structural changes at Intuit through new GC; April 16, 2007: reshuffling of power in the department; April 27, 2006: on-boarding a new general counsel; May 25, 2008: expenses of relocation; June 11, 2008: new external general counsel clean house; July 28, 2008: steeple chase for the new top lawyer; April 25, 2009: thoughts on the new GC at Schneider Electric; and July 26, 2009: assessments start forming early.);

A key senior lawyer retires or leaves (See my post of March 8, 2009: attrition in law departments, with 16 references and one metapost.); or

The company ,merges and the department combines with another law department (See my post of Jan. 16, 2009: layoffs after mergers with 9 references.).

Other upheavals include when a new CEO takes office or if there are major reshufflings of responsibilities, such as the addition of compliance (See my post of May 14, 2005: GC vulnerable when CEO is removed; and March 28, 2006: CEO of PPG reorganized business structure.). Any of the above five traumas may puncture the status quo.

By guest author Steven Levy of Lexician.

Recently the Association of Corporate Counsel hosted a session titled “"Inexpensive/Free Applications for Your Law Department.” The speakers extolled the virtues of open source software as “free applications.”

Every parent understands that there is no such thing as a free puppy.

The acquisition (license) cost of software is rarely the largest slice of the pie. There are data center costs, IT costs, training costs, and the cost of incompatibility, among other issues. In addition, it costs money and time to try out various software packages, and IT may restrict what is allowed to run on the corporate network.

And you may already have some of the touted tools. For example, both Word 2007 and Open Office Writer 1.1 can save directly to PDF format; you don’t need to purchase an add-on.

Reducing the cost of technology means reducing the total cost of owning and using technology, not just the up-front cost.