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Not one to mince words, the general counsel of Cisco, Mark Chandler, dropped that grenade on an audience primarily of law firm partners at the recent Georgetown Law Conference on Law Firm Evolution. He explained that efforts by partners to persuade him to hire one of their colleagues “have more to do with money than expertise.”
Lest there be any doubt, he quoted an old chestnut: “Never believe a vendor unless they say, ‘I can’t’.” (See my post of Feb. 20, 2009: cross-selling by law firm partners with 7 references.).
According to an email that arrived today, Connected launched last March with only 3,000 beta members.
“One year later, the professional network for lawyers has grown to nearly 30,000 members – including members from more than half of the Fortune 500, lawyers from 98 of the Am Law 100, and 10 Alliance Partners from prominent legal organizations and associations. To date, almost 700 active groups have formed within the community, where members collaborate and share ideas on a number of legal issues, and 2,500 members have participated in community-hosted webinars.”
Attaway, Connected! I have mentioned you from early on and host a forum on it (See my post of March 31, 2009: suggestions for in-house lawyers regarding online networks; and June 9, 2009: data from a survey related to Connected.).
An email from UnitedLex (Kristie Kushner) brought to my attention a recent development that involves both a major legal department and a major LPO provider. I normally find little value in press releases but this one seems of the magnitude to deserve mention. I shortened the email but preserved portions of its wording.
Five years ago, BT, a Fortune Global 500 company that operates in 170 countries created an in-house, offshore legal unit in India. Recently BT chose UnitedLex is to take over that group.
The email cites UnitedLex’s application of six sigma concepts “that enable UnitedLex to standardize processes and reduce risks.” David Eveleigh, General Counsel for BT Global Services, praises the arrangement.
As to scope, note the reference to law firms: “UnitedLex will provide commercial contracting and antitrust regulation services to BT legal teams in the UK, the US, India, Singapore and Hong Kong, beginning in April. UnitedLex will support not only internal BT resources, but also its global panel of law firms.
My friend Brad Blickstein,head of the Blickstein Group, wanted to supplement my recent post about law department administrators who mediate between the legal function and other support functions. I had mentioned the profusion of titles for administrators so he helpfully sent a partial list of responses to the question "What is your title" from The Second Annual Law Department Operation Survey:
- Associate Vice President, Operations
- AVP-Financial Reporting & Administration
- Chief Operations Officer
- Director
- Director - Operations, Law
- Director of Operations
- Director of Operations, Law Department
- Director, Legal Operations
- Legal Administrator
- Manager - Legal Business Services
- Manager, Legal & Contracts Department
- Managing Counsel
- Office Manager
- Process Owner, Reporting and Analysis
- Senior Manager, Legal Operations
- Senior Manager, Legal Administration
- Sr. Director - Legal Administrator
- Sr. Mgr Law Operations and Strategy
- Sr. Operations Manager
- Legal Administrator
- VP - Managing Counsel
Brad also mentioned that readers can download the survey supplement from his website.
An unpublished paper by Michele DeStafano Beardslee and three co-authors at the Georgetown Conference on the Future of Law Firms at 4, emphasizes the baleful effects of information asymmetry regarding the quality of service provided by law firms. She takes the perspective of an economist and stresses that “credence goods” like legal services pose problems because “quality is not verifiable ex post.” (I think she means “ex ante,” or before the service is obtained.) (See my post of Sept. 7, 2008: information asymmetry with 7 references.).
While it is true that an in-house lawyer who hires a partner to accomplish something cannot touch and feel the service to be gotten, that lawyer can talk with the partner from the beginning of the matter, get budgets, look at work product, review bills, and direct the service. It is a credence good but it gets shaped and evaluated every day, or can be test every day if the in-house supervising attorney is so inclined.
Moreover, the partner does not know and understand 100 percent what the in-house lawyer wants and needs. The asymmetry exists to some degree on both sides. But both lawyers share in the creation of the legal service.
An unpublished paper submitted by Michele DeStafano Beardslee and three co-authors to the Georgetown Conference on the Future of Law Firms at 3-4 laments benchmark surveys by trade groups and consulting firms. Aside from low response rates and an inability to compare respondents and non-respondents, she singles out a particular weakness: “most importantly, [the surveys] primarily study small or mid-sized privately held companies.”
The footnote to that quote explains that 46 percent of the respondents to Altman Weil’s 2006 survey had revenue of less than $1 billion and 60 percent were not public companies. In the ACC 2007 survey, 83 percent of the respondents had less than $2 billion in revenue, and roughly half were not public companies.
Nothing is wrong with benchmarking small law departments (five or fewer lawyers), since they make up by far the largest segment of all US legal departments. They are small because their companies have revenue to match (at an overall figure of about five lawyers per billion of revenue). With corporate clients on the smaller side, it follows that a significant portion have not gone public and taken on the additional expenses and scrutiny (See my post of March 29, 2010 #2: extra costs of being publicly traded; and Jan. 19, 2008: unknown metrics about non-publicly traded companies.).
Tired of clients asking you the same question? Write the question and a response that instructs lay readers, put them both on your legal department or corporate internal website where they are easy to find, and wait for the next time someone asks the question. Then, either tell the client or write to the client that they should consider the guidance online and check back with you if that doesn’t help.
This useful suggestion, laden with implications for knowledge management, client self-service, quality control, and productivity, comes from the ACC Docket, March 2010 at 34. The author adds that he typically includes a link in the email response, instead of attaching the document.
One of the metrics that came out of a survey conducted by the Harvard Law School Center on Lawyers and the Professional Services Industry tells us the provenance of new general counsel. A table from an unpublished article by four authors from the Harvard Center (at 19), gives results from 139 companies in the S&P 500. Actually, however, the figure they cite comes from the American Lawyer 2007 Survey of Fortune 500 Legal Departments.
The internal promotion figure is 56.4 percent, meaning that in slightly more than half of legal departments in the Fortune 500 the new general counsel came from the ranks of the company’s legal department, the remainder presumably coming from another legal department or a law firm. You could view that fifty-fifty figure as an abject failure of succession planning. Clearly, many Boards and CEOs do not think the internal talent pool is deep enough.
By the way, here is the explanation of the S&P 500 (“a committee of analysts at Standard & Poor’s selects the S&P 500 from among companies whose stock trades on the New York Stock Exchange or Nasdaq with the goal of including a representative selection of industries in the US economy; most companies are US.”).
The position “lawyer,” as in the key benchmark of lawyers per billion of revenue, treats each lawyer as an undifferentiated atomistic unit, but in fact individual lawyers consist of sub-atomic particles galore, so to speak. If we knew more precisely attributes of the constitutive lawyers in legal departments, we would move closer to understanding how those lawyers influence productivity and quality. Four such characteristics should clarify my point.
Tenure with department – generally, the longer a lawyer has belonged to a company’s legal department, the more effectively that lawyer will get work done and make decisions. Familiarity breeds contempt for time wasted and ignorance of how the company takes risks and makes money. Newcomers can’t quickly acquire that knowledge.
Total years in law practice – generally speaking, lawyers who have been longer in the saddle ride with better experience and judgment. They have seen the problem or something like it, can cut to the salient legal issue, and propose pragmatic solutions. More recently graduated lawyers lack that grizzled discernment.
Years of legal education and other graduate degrees – in the United States, to practice as a lawyer means you graduated three years of law school and passed a state bar exam. In other countries, an undergraduate legal major serves. Some lawyers obtain LLMs or earn MBAs or have become CPAs. As a rough approximation, the more formal education an in-house counsel has obtained, the broader their perspective and knowledge.
Language spoken – to some degree, a lawyer fluent in the mainland language of his or her client will contribute more than one on a linguistic island.
If we data on legal spend as a percentage of revenue and data about all the lawyers in the departments that corresponds to these attributes, not to mention others that could apply, we would understand better how the makeup of a legal team influences total legal costs.
“Everyone knows that the scientific revolution involved the replacement of an Aristotelian understanding of nature in terms of qualities by a new understanding, which prioritized quantities.” Although sadly not one of the “everyones,” I read that statement from the J. of the Historical Soc., March 2010 at 43, and it crystallized several of my thoughts.
The article traces how far the scientific world has come from Galileo’s century, when weights and time and volume were at best crude approximations, through Bacon’s turn to empiricism and increasingly precise measurements, to today’s unquestioned primacy of data and statistics. But those who manage legal departments must combine the qualitative assessments of Aristotle and quantitative tracking of Bacon.
How well an in-house lawyer serves the client simply can’t be reduced to numbers, not even sets of numbers. We do not know how to move from words to figures, from concepts to counts as it were, when we describe attributes such as practical knowledge of the law, trust and credibility, creativity and doggedness. We do know how to count many aspects of a law department’s operations and output, but the closer we get to the individual lawyer in a department, the less counting sheds light.
The business world pushes lawyers to attach numbers to what they do but the qualities associated with legal advice that is fit to purpose eludes that drive to quantify. “For we should surely still live in a world of qualities, not quantities, if accurate measures had not come to seem the most reliable of all forms of information.” With lawyers, however, we still live most importantly in a world not of quantities but of qualities.
