Several years ago, an article in the Admin. Sciences Quarterly, June 2002 at 219, explored the diffusion of ISO 9000 Certificates throughout the world. What caught my eye was a chart that showed 34 countries and the amazing number of such Certificates in them as of the end of 1998: 271,847. In the lead were the UK with 58,963; the US had 24,987; Germany 24,055; Italy 19,095; and France and Australia had a few more than 14,000 each.

Given the investment of time and money required to obtain ISO certification, it seems plausible to me that many of the firms that obtained certificates would have at least one in-house lawyer. What I could not determine from the article is whether a company might obtain more than one ISO 9000 Certificate. Either way, we have another data point for estimating the number of legal departments worldwide.

A computer scientist named Maurice Halstead devised a measure of software complexity and the mental effort required to create it. As explained in IEEE Spectrum, Oct. 2010 at 34, the quantitative measurements, later called Halstead metrics, “counted the number of unique operators and operands as well as the number of operator and operand occurrences in source code.”

Translate that function into the context of legal agreements. Software could count the number of defined terms, the number of times they are used, the number of paragraphs (or pages or words), the number of nested lists, and other characteristics of agreements that reflect complexity. With that software and a common measure of legal complexity, it would be easier to assess the productivity of legal departments, the level of client demand for agreements, the value delivered by law firms, and improvements in the structure and content of agreements. Maybe this blogger will be remembered as the progenitor of “Morrison metrics”?

Consider these reasons why clients might criticize the speed of their legal team.

• The in-house lawyers might be not very capable. They lack training, draw on inadequate experience, or make do with feeble intelligence
• The law department might be understaffed to handle even a normal flow of client requests for services.
• The lawyers in the law department might set priorities poorly among the projects they work on and the order of their effort. Unwise choices on to-do lists lead to client complaints.
• The clients of the law department might expect unreasonable promptness. Quality legal work takes time and clients as a group might not appreciate that. The noon e-mail can’t get a response by 1PM.
• The law department might suffer from inadequate infrastructure, which causes delay, such as nonexistent work product systems, no intranet repository, or antiquated technology. Lacking tools, even the most competent lawyers slow down.
• The law department might not have explained to clients how they should most effectively seek legal advice. For example, clients might fail to provide sufficient information, make excessive demands, or abuse the lawyers with quasi legal tasks.
• The in-house lawyers and staff might fall short on project management. Despite ability, headcount, sound priorities, understanding clients, tools and in-scope tasks, the lawyers might bungle planning and implementation.

An in-house lawyer based in England told me that many law firms their negotiate caps on their firm’s liabilities. In return for granting discounts or other economic concessions, firms may ask law departments to limit their liabilities in malpractice actions.

I had not heard of US-based law firms that seek such a quid pro quo but it certainly seems to be a bargaining chip that inside counsel might put on the table. As I think negligence actions by law departments happen rarely, a concession on that right might save the face for a firm to agree cost reductions (See my post of July 26, 2010: data on malpractice actions; and Nov. 8, 2009: malpractice of law firms with 8 references.).

I recently took part in an all-lawyer conference for a very large legal department. The general counsel laid out clearly a set of beliefs of what characterizes a classy law department. At the end, for more than 30 minutes, the general counsel fielded questions from the 200-plus lawyers. Nearly all of their questions raised fundamental points and the general counsel carefully, creatively, and candidly spoke extemporaneously to each question.

I commend completely such a forum. In this situation, particularly, where the general counsel had not been in the position for a full year, it gave the assembled lawyers an opportunity to form their own conclusions about their leaders. Even for a longer-serving general counsel, the open give-and-take makes much sense. Fundamental messages can be underscored, worries among the staff confronted, and insight into operations and changes highlighed.

General counsel need to become accustomed to repeating key messages when they speak with members of their department. The repetition of fundamental points, such as the value of teamwork, partnership with internal clients, respect for each other, and communication – may sometimes grow wearying. They may assume there’s nothing more to say and the message had better resonate. But they would be wrong.

All leaders need to lay out clearly and pound home fundamental messages. Ad nauseum, perhaps. Ears open and close at different times, so the words have to be out there all the time. Ideally, of course, the legal leader should believe in and model actions they extol (See my post of March 21, 2006: Mike Dillon without an office as a role model; April 30, 2006: mentor is more than role model; May 2, 2007: listen more, as role model; June 10, 2007: a solid leadership practice under Human Capital Management; Sept. 7, 2008: general counsel as role models; Oct. 8, 2007: 180 degree assessments; and May 4, 2009: walk the talk.).

With more than 700 participants in the General Counsel Metrics global benchmark survey of law departments, it’s bizarre that only five of them are from procurement or sourcing departments (See my post of May 26, 2010: notes early lack of procurement participation.). I had thought early on that many more procurement professionals would want to be able to compare the spending of their legal department to medians and quartiles of other companies in the same industry.

It isn’t as if I have not tried to attract procurement managers. Posts on a much-visited blog (Spend Matters), comments on two large LinkedIn groups, and emails to hundreds of procurement executives have yielded miniscule interest.

Maybe those who oversee corporate purchasing do not have access to data about legal spending. But that should motivate them even more to try to obtain or estimate it and learn the 25 benchmarks that are in the report. Perhaps they are deterred by the consequences of an angry general counsel accusing them of skullduggery and improper behavior? But then the general counsel should submit the requisite data and share the results. It may be that the law department’s expenditures have always been a tough nut to crack, so why bother. Or perhaps the company’s culture rejects metrics for management. More’s the pity.

If you care about legal spending by your company, join more than 700 other law departments. Click here to take part in the GCM benchmark study and get your no-cost report, all 65 pages, in November.

I love actual data about law departments, hardly a surprise to steady readers, so I appreciate when data appears on what law firms charge per hour or per type of service (See my post of June 2, 2010: CT TyMetrix Real Rate Report; Oct. 14, 2010: AIPLA data; and Oct. 22, 2010: AFA data from LexisNexis CounselLink.). I can foresee, however, that law firm leaders will balk at submitting their invoices electronically if the intermediary service provider discloses that data, even in the aggregate.

The foreseeable next step will be disclosure of what law firms charge on average for common tasks, such as reviewing 10K disclosures, updating pension plans, or preparing a response to an EEOC charge. Law firm leaders will oppose price transparency because the information will inexorably press fees down. Just as car dealers have little room to negotiate when all cost data stares out from the Internet, so law firms will not want the lowest-common denominator of publicly-available prices to drive fee arrangements.

LexisNexis says its Verdict & Settlement Analyzer provides information about outcomes of previous similar cases. As described in Legal Tech. News, Oct. 2010 at 17, the software matches the characteristics of a case input to it against its database and lays out key comparisons: “how similar cases have been resolved, and the amount awarded by method of resolution for any particular jurisdiction; the range of possible outcomes” and more. Based on this sketchy description, let me venture two thoughts.

First, it seems as if a litigation manager in a law department could use Analyzer to benchmark the performance of a litigation firm retained by that department. The comparisons would justify a premium or explain a holdback; they could set performance parameters for a fixed fee; and they could clarify bonus arrangements for phases of cases.

Second, if the data available is as plentiful and robust as advertised, we have yet another example of law department performance data made available and transparent (See my post of June 16, 2010: the Decade of Data.).

This on-the-money quote appears in the NYSBA J., Oct. 2010 at 37, and is attributed to a senior lawyer at United Technologies. It hits the right note.

In-house lawyers give their advice as part of a larger business problem. They are rarely king of the hill, with pivotal decisions resting on their statutory interpretation, decision analysis, or other legal legerdemain. Always, financial considerations, risks to reputation or business, resource constraints, competitive tactics, and host of other business factors overlay and dominate executive decisions.

For this reason, lawyers mostly react to business problems; for this reason client satisfaction matters most highly; and for this reason knowledge of the business stands on a par with knowledge of the law for in-house counsel.