Survey: why law departments don’t track more data on outside counsel spend and matters

On a panel at the SuperConference, Steve Williams of the General Counsel Roundtable shared the results of a survey of its members regarding “why law departments shy away from data.” More precisely, why they don’t do as much as they might with matter and invoice data. Here are the responses, with my estimates of percentages from the slides.

“Lack of good technology to track the data” was selected by 68 percent of the respondents. Hard to believe, for me, with the plethora of matter management and e-billing packages available for license. “Lack of time or staff” was selected by 58 percent, a mysterious “lawyers dislike the process” by 48 percent, and “no team or staff to create reports at 38 percent. Presuming this was a multiple choice question, the results are only as good as the choices.

Other choices could have been “Don’t see the value in collecting or analyzing the data” or “Can get the data I need from accounts payable.”

Posted In: Benchmarks
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Shout out to Pinhawk and its readers who come to this site

Thirty years ago on a MetroNorth platform in Scarsdale, NY, I met Joe Bookman, then the President of CompInfo. Soon thereafter, disgruntled with law practice and enamored of PCs and software for lawyers, I joined CompInfo to sell its LawPack program to law departments. Joe and I have been friends since then.

Joe founded and runs PinHawk, which aggregates news from the Internet about law firms, law departments, legal technology and related topics. For a modest subscription you get a daily download, edited and attractive, of material that is relevant to your interests.

With increasing frequency subscribers to PinHawk’s service click through to this blog. Thank you, Joe!

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Eighth set of blogs that have referred readers to LawDepartmentManagementBlog

Another in my series of kudos, thanks and gratitude (See my post of Nov. 15, 2009: history of this series; and Jan. 4, 2010: seventh set.).

  1. BrightLeaf
  2. Entertainment Litigation (Hank Fasthoff)
  3. Globallegal (Matthew Sullivan)
  4. Jasonschoolmeester.id.au/ (Jason Schoolmeester)
  5. Jason Wilson (Jason Wilson)
  6. LaconicLawblog.com/ (Eric A. Welter, Esq.)
  7. Last Generalist (Richard Russeth, Esq.)
  8. Law Firm Transformation (Gary Mitchell
  9. Law People (Rhonda Muir, Esq.)
  10. Legalmanagement.com.cn/ (PEKNit)
  11. Legal-management.net (Antoine Frahan)
  12. LPO Source (Michael D. Bell)
  13. Mattern of Fact (Mattern & Associates)
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My article on bidders’ conference calls during competitive selection processes

Where there are Requests for Proposals there should be bidders’ conference calls. Yes, they should be a best practice (See my post of March 18, 2007: basics of teleconferences for bidders; May 21, 2007: auctions and call-ins; Nov. 30, 2007: ten tips for better competitive bids; Aug. 13, 2008: good practices for competitive bids; Jan. 28, 2010: administrators can orchestrate conference calls; and April 19, 2010: reasons for silence when firms dial in.).

After bidding firms have had an opportunity to read the RFP and collect questions they would like to ask, host a teleconference for all the bidders. During it they can all hear the same answers to questions and ask follow-up questions. No one obtains privileged information though sidebar conversations.

Another advantage is that a bidder’s conference makes better use of your lawyers’ time, since they answer questions once and are done, rather than having to field the same question from different firms.

In a recent article I describe conference calls in more detail and recommend ways to conduct them. You can click here to
Download 10-05-10 Bidders’Conference Call Rees Morrison Nat Law J my article in the National Law Journal.

Posted In: Outside Counsel
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Respondents to the largest-ever benchmark study are 63% general counsel, 16% direct reports, and 8% COOs

Of the 564 people who submitted data for the largest benchmarking survey ever, almost two thirds of them (63%) are general counsel. The next largest group of respondents is lawyers who report directly to the general counsel (16%). The third most frequent are law department managers (Chief Operating Officers, 8%).

Among the remainder are lawyers who do not report directly to the general counsel (4%), others in the legal department (paralegals, admins 6%), and a scattering from each of Finance (2%), Procurement (1%), Compliance, Marketing & Communications, and Human Resources.

This data from May 23rd makes several points.

GCs care about benchmark metrics and will take a few minutes to enter their data in order to obtain data. To be fair, most of the publicity for the survey, including emails, was aimed at general counsel. Also, they are not technophobes, we can infer. Many of them undoubtedly delegated the simple task to someone on their staff.

GCs know their department’s fundamental data. Some subordinates did not provide complete information.

Administrators know everything!

Other functions care about legal staffing and spending, notably finance (and its subset of purchasing), compliance and human resources. Oddly, however, procurement has barely taken advantage of this offering.

Many people care, as evidenced by the wide range of participants.

Join nearly 500 other law departments. Take part in the benchmark study by clicking here for the confidential, online survey that asks for fundamental 2009 metrics of staff and spending.

Posted In: Benchmarks
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Could lack of alternative fee arrangements (AFA) breach a fiduciary duty owed by a general counsel?

Jeff Carr, the general counsel of FMC Technologies, held forth on a panel at the SuperConference yesterday. In the context of billing arrangements by law firms other than hourly billing (and discounted hourly rates), Carr speculated out loud.

He wondered whether a general counsel who has not actively explored and tested some of the performance-based payment methods might be derelict in the obligation that executive has to steward the company’s funds and resources. Might there be a breach of fiduciary duty to the company, he asked the audience?

Seeking authoritative guidance of what this might mean, I found US Legal.

“A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust’s beneficiaries, and an attorney has a fiduciary duty to a client.” Surely a general counsel must act in the best interest of the company and its shareholders. To miss opportunities that reduce legal costs and improve quality might, over a period of time, breach the fiduciary duty of a general counsel to the client employer. But I am nervous even writing this…..

Posted In: Clients
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Indefatigable doesn’t mean skinny: new ventures in the past year of this blog

Let’s see, what have I done differently on this blog in the past year or so?

Three changes particularly stand out. First is the distribution of my posts on Twitter through TweetDeck. I now have hits on this blog from Twitter all the time (See my post of Nov. 16, 2009: lists on Twitter; and May 24, 2010: retweets.). Second is my posting of the 10 best posts of each month, two months later, on social network sites such as Connected, LinkedIn and Legal OnRamp. Again, spreading the word. Third, in terms of improvements is the new “linkwithin” function of TypePad. All the time these days I see clicks to related posts that are suggested by TypePad at the bottom of my primary post. Some of that back-referencing I do on my own, such as in the second sentence of this paragraph but the automated functions must be doing something appreciated by readers.

Other innovations on this blog include syndication on Newstext, my making available all my metaposts on my website (ReesMorrison.com), registration for my newsletter and the first issue sent out, my third blook – structure, more ads hosted by me, the extreme pride of being an ABA Blawg 100 Honoree, the evolution of hyperposts, my first .Gif animated notice (for the General Counsel Metrics benchmark effort), drawing on ideas from the Academy of Management Review, and my internal use of Examine software (See my post of Nov. 9, 2009: a test of Examine.).

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Pfizer, the pharma giant, also makes the news as a law department

Almost as ubiquitous as little blue pills are posts on this blog about the world’s largest pharmaceutical company.

Here they are about Pfizer in chronological order (See my post of Oct.1, 2005: Laura Kibbe and internal discovery team; Feb. 14, 2007: standard for handling litigation documents; Feb. 25, 2007: secondees; March 3, 2007: its products-liability panel; March 12, 2007: Pfizer’s Partnering Program; March 13, 2007: Pfizer’s P3 pain [two posts]; May 26, 2007: CEO was its previous general counsel; Dec. 12, 2007: data warehouse; March 20, 2008: interim GC appointed after Alan Waxman resigned; June 11, 2008 #4: Kibbe decamps; Sept. 12, 2008: transitioning cases to new firm; Sept. 12, 2008: detailed article on Pfizer’s RFP process; Dec. 11, 2008: diversity initiative; Dec. 14, 2008: diversity conference for firms; Feb. 16, 2009: uses decision tree analysis; Aug. 5, 2009: evaluations of law firms; Aug. 13, 2009: tiered discounts; Aug. 28, 2009: requires value reports from firms; Jan. 12, 2010: three firms band together to serve it; and Jan. 12, 2010: some questions about its huge fixed-fee arrangement.).

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Heterogeneity of a general counsel’s direct reports may degrade a team’s performance

Those who report to a general counsel in large law departments differ from each other on such demographic characteristics as age, gender, race, religion, department tenure, education, and work background. “A team’s demographic heterogeneity, assessed using a variety of indexes, has been found to be negatively related to level of team rapport and informal communication,” according to research cited in the Acad. Mgt. Rev., Feb. 2005 at 72 (citations omitted). Many people tout the benefits of having employees of different backgrounds on teams, such as the direct reports to a general counsel. Yet others claim those differences gum up the works (See my post of June 23, 2009: mixed findings on whether diverse work groups function more effectively.).

More specifically, diversity on a team “impedes task-related processes and reduces information exchange,” not to mention “invoking defensive behaviors, distrust, conflict and hostility.” Other than that, Mrs. Lincoln, how was the play?

Let’s consider this controversial issue still open. Meanwhile, during the two years since my last collection of posts on diversity (See my post of June 17, 2008: diversity with 29 references.). I have written 13 more (See my post of March 6, 2009: diversity easier in a global law department; Aug. 6, 2008: McDonalds’ Santona and her emphasis on diversity; Sept. 21, 2008 #2: DuPont teaming with Wal-Mart on diversity; Dec. 5, 2008: evaluations of firms on diversity performance; Dec. 14, 2008: Pfizer and diversity initiative; Dec. 14, 2008: generational diversity; April 6, 2009: varied demographics among 20 most influential GCs; April 16, 2009: a tool to understand and encourage diversity in sexual orientation at law firms; May 20, 2009: department with a plethora of diversity; June 24, 2009: some history about efforts by legal departments to encourage use of diverse lawyers in firms; July 13, 2009: Williams Co. ranks firms on diversity and tells them their ranking; Aug. 20, 2009: statements by general counsel in support for good causes; Dec. 7, 2009: Coca-Cola and its best-in-class evaluation of “partner” firms; and Dec. 7, 2009: sizeable internship program at Bristol-Myers Squibb.).

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Does the metabolism of change decline the longer a general counsel serves?

No one knows. But academic management literature doesn’t lack for models, theories and research.

“The conventional argument, primarily drawn from upper echelons theory, is that long-tenured executives are a source of organizational complacency. That is, they tend to resist change and embrace the strategic status quo.” Despite this summary statement in the Acad. Mgt. Rev., Feb. 2005 at 71 (citations omitted), the authors suggest at least one counter-explanation. Long-tenured general counsel, to stick with our domain, may not resist change per se, but rather, that they tend to be found in firms with good performance, where a change in strategy may simply not be warranted.”

From a different perspective, you have stayed for many years because you have done a good job and the company has prospered, so why change a winning game?

Posted In: Showing Value
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Rees Morrison

Rees Morrison, Esq., is an expert consultant to general counsel on management issues.
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