This idée fixe of mine has roots far back in this blog. A sample of the reasons why I doubt the existence of “best practices” gives me an opportunity to rehearse some of my arguments.

A pattern of more and more law departments doing something hardly proves that the something is optimal (See my post of March 16, 2009: a best practice is not necessarily a trend.).

The circumstances of each law department differ, significantly, so force-fitting something that flourished at a different department may fail (See my post of Nov. 25, 2009: path dependency limits successful imitation of a practice.).

We have more asserted claims than proven confirmations regarding best practices, more anecdotal, instrumental or ideological support than empirical evidence (See my post of Jan. 5, 2010: little evidence of evidence-based management.).

We focus almost entirely on “successes” and leave unnoticed the initiatives that did poorly. How can you claim a best practice if you can’t address situations of lackluster effect or worse (See my post of Nov. 9, 2010: there are still mistaken practices and we can learn and improve.)?

Cover-story examples become enshrined as myths and smoothed on panels so much they take on an aura of inevitability, cinch of implementation, and “bestness” (See my post of Jan. 4, 2011: critical history compared to popular myths.).

Law department management is complicated and a priori one would surmise that lots of pieces would need to be put together to excel at anything (See my post of July 6, 2011: 500 hammers argue against best practices.). The odds of duplication are low.

Economic history offers many examples of multiple solutions vying for acceptance (See my post of July 8, 2011: toolbox management thrives on lots of choices.). Even when competition in the market winnows down the lot, it rarely goes to one choice and even then the choice keeps evolving.

All knowledge is socially constructed so what we think we understand about how best to manage law departments is little more than folk wisdom, prejudices, and unexamined mental habits and constructs (See my post of Sept. 22, 2008: postmodern critiques of best practices.). Ideologies and values lurk behind all “best practices.”

Best practices in law departments declare universal applications, whereas my sense of things is that they are particularistic: we can do no better than identify a solid practice at a given time for a specific context.

Among the arguments in a solid book that disagrees with the current worries about America losing its competitive edge, Amar Bhidé, The Venturesome Economy: how innovation sustains prosperity in a more connected world (Princeton Univ. 2008) at 162-179, puts forth seven concerns with off-shoring. Each of them resonates with some general counsel.

1. Communications problems that are very hard to overcome at long distance. Nothing beats sitting at a table to cut through explanations and promote shared thinking.
2. Partitioning problems,” by which Bhidé means whether a project’s tasks can be divided up and parts done somewhere else, then integrated together successfully.
3. “Managerial capacity constraints,” whereby coordination demands beyond communication gnaw away at the efficacy of the off-shore arrangement.
4. The service is not performed any faster than onshore.
5. “Less than suitable supply” of talent. Low hourly cost means nothing if the person cannot do the work well.

The author summarizes these contentions at 204 and adds economics and proprietary information at risk: “the value of proximity and the difficulties of partitioning … the scarcity of managerial capacity, the relatively small savings that could be realized from off-shoring small teams, the limited supply of capable staff available in offshore locations, the competition from large companies for this staff, the difficulty of communicating across time zones and cultures, and the fear of their losing intellectual property.”

The mantra for managers: if work can be delegated to a lower-cost, capable person, strive to do so. While that sounds good, still I mused about the $200 an hour Associate General Counsel (using a fully-loaded cost per hour that shouldn’t take anyone back) who delegates a task to a $50 an hour paralegal. Let’s take for granted that the paralegal can do the task as well as it needs to be done.

Here’s the rub. If it takes the paralegal five hours ($250 cost to the company) but saves one hour of AGC time ($200 cost to the company), do we still approve the delegation? Yes, if the AGC can thereby generate more value during the saved hour, such as to concentrate and make progress on a tough legal problem.

Jobs that an experienced and more expensive lawyer can’t do any faster, such as Bates stamping, photocopying and indexing, are automatic candidates for delegation. Jobs that on a pure economics basis might be reserved from delegation should in theory still be sent down if the time saved above has a higher value than the hourly cost differential.

An earlier foray into erroneous thinking about one kind of software left a lot of flawed thinking to cover (See my post of Sept. 5, 2005: myths of matter management systems.). Here I have generalized common technology-related mis-perceptions.

1. The hard part is selection. Wrong: the tough sledding comes when getting the software onto users’ desktops and used effectively.
2. You can bank on the vendor’s ROI calculations. Wishful thinking: in fact, most of those calculations rest on crucial assumptions and very forgiving methodology. A good discipline, but hard to hold out as airtight.
3. Conversion and integration of historical data is a snap. Sure, since nothing is impossible to the person who doesn’t have to do it (See my post of July 20, 2011: legacy contracts and conversion.).
4. IT is on your side. Possibly, but their requirements, mandated involvement, bureaucratic requirements, and charge backs put the lie to this ingenuous hope (See my post of April 26, 2006: tension between IT function and legal function on hosted systems.).
5. Software does not require training. Oh yes it does, and lots of it for a long time!
6. The vendor will customize the software to help you. Vendors will adjust settings for you and do what they can within the modifications available in the existing package, but to write new code?
7. People easily change to fit software. Hardly, since ruts resist software.
8. Software can overlay and integrate with existing ways of work. That is the promise, but the reality falls far short.
9. Most people will give a new system a fair chance. Actually, most people don’t like to learn and feel incompetent and will bark.
10. Software will transform users. Just as soon as the law department goes paperless.

Larger law departments, those with say fifteen or more lawyers, tend to be in companies with equivalently more revenue. Since economies of scale in legal spending benefit those larger departments, surveys whose participants are skewed toward large companies will produce distorted, lower benchmarks (See my post of Dec. 16, 2010: data from $10 and $20 billion companies.).

Total legal spending as a percentage of revenue suffers the most, since it declines with company size in a fairly constant and predictable trend. Other than lawyers per billion of revenue, which also declines, although less regularly than total spending, most metrics hold fairly constant. General counsel in smaller departments should take account of the their size relative to the median size of the population, unless they can obtain metrics for their own size category.

In mid-2011, at least twenty companies have licensed software to more than a handful of U.S. law department to help them manage matter information. Allegient, BottomLine, Bridgeway, CSC, CTTyMetrix, Datacert, doeLegal, EAG, Legalbill, LexisNexis, LawBase, LT Online, Mitratech, TrialNet, and Serengeti (acquired by Thomson Reuters in 2011) (See my post of Feb. 25, 2009: eight matter management systems at LegalTech New York.).

A post five years ago listed most of them (See my post of July 14, 2006: names 11 companies that offered matter management systems.). An ILTA survey in 2009 included in this niche Practice Manager Group and Legal Files. In truth, it is hard to draw a line around “matter management systems” (See my post of July 16, 2011: difficulty delineating genre.).

Hyperion Research group has published an overview of the cottage industry and its current inhabitants (See my post of Feb. 23, 2011: strengths of Hyperion’s report; and Feb. 24, 2011: predicts entrance into the market of enterprise application vendors.). A recent report brought home that difficulty (See my post of March 6, 2011: Hyperion Research describes a dozen vendors of matter management systems.). Other posts on this blog have identified candidates in this domain (See my post of Feb. 15, 2009: LegalMaster site lists Legal Bill Review, LRI (Legal Review, Inc.), ELF, LAS (Law Audit Services), Visibility, Legalgard Litigation Advisor, ValidZone and Direct Invoice, BES, Direct Commerce, Petersen, and Stuart, Maue, Mitchell & James.).

At least 29 packages were mentioned by one or more law departments in my global benchmark survey in addition to those mentioned above, notably SharePoint, Pro-Link, Tedesco and Smart Counsel (See my post of March 12, 2011: early look at matter management systems based on 142 participants; and June 13, 2011: vendors mentioned in General Counsel Metrics benchmark survey at close to the 300 participant mark.).

This particular cottage industry has more rooms than the Tombs (as they used to say when I was in John Jay while at Columbia Law School).

Earlier I fingered the chief culprit that preserves the status quo, the single most flagrant obstacle to improvement in law department operations: a refusal to stop and think about how work is done (See my post of July 11, 2011: pause and reflect.). If an internal lawyer does that, ten bedrock foundations are available to will improve operations.

1. Push clients to clarify their requirements. Train clients how to request services and what they can do to help get the service (See my post of Feb. 11, 2007: survey data on web forms; March 26, 2007: pros and cons of Requests for Services; Nov. 8, 2009: pluses and minuses of requests for legal services; Nov. 10, 2010: contract intact systems; and Jan. 7, 2010: clients request legal services through an online portal.).

2. Define and differentiate legal services. If work streams in as an undifferentiated blob, no law department can pick out what parts of it to treat differently.

3. Track metrics about services. Until you count some things or have a sense of time demands, you can’t do a good job of improving productivity.

4. Analyze steps in processes. You need to understand what is done, how often it is done, how long it takes, and who has a finger in the pie (See my post of April 9, 2009 #2: process maps with 6 references; and of July 31, 2009: process control techniques with 3 references and 5 metaposts.).

5. Set priorities. Some tasks are more important than others (See my post of June 26, 2008: priorities with 6 references.).

6. Triage. Stop doing lower value work or change how it is done. Overall, match your effort to the matter’s importance (See my post of May 15, 2005: NLRB and three tiers of matters; and May 23, 2008: core competencies help you know what to triage.).

7. Delegate work. Ideally, if a lower cost person can get something done efficiently, they should handle it (See my post of Aug. 28, 2008: delegation in a law department with 14 references.).

8. Refer to checklists. Make sure you are reminded of the essentials tasks and their best order (See my post of Jan. 26, 2010: checklists with 9 references.).

9. Use software. As simple as word processing; as complex as document assembly, software can boost productivity.

10. Standardize and reuse work product. Someone has already invented the wheel (See my post of Oct. 4, 2010: Susskind and commoditized work.).

Amy Fox holds the title of Lead Knowledge Management Counsel in the Legal and Corporate Affairs department at Intel. We learn that because Fox will be speaking at an upcoming Ark conference, Knowledge Management in the Legal Profession on October 26-27 in New York City. Four observations result.

One: Fox is the only representative from a legal department among the many law firm and consultant speakers. The role is unusual.

Two: That Fox is Intel’s “Lead” knowledge management lawyer suggests there are others.

Three: Fox would be categorized as a practice support lawyer (See my post of July 11, 2011: PSL’s as an opportunity for law department collectives.).

Four: Fox’s position is cost justified in part because Intel has a very large law department (See my post of April 23, 2006: sabbaticals; Feb. 9, 2006: at Intel HR controls its lawyers; Dec. 9, 2008 #4: online auction by Intel for patents in 2006; July 7, 2010: named in IP software lawsuit; Sept. 20, 2010: R&D spending is high; and Nov. 3, 2010: filed amicus brief in Supreme Court.).

From the standpoint of a law department, you could say the ultimate value-based arrangement obligates payment only when and if the law firm accomplishes just what the department wants. With inventions suitable for patent protection, what could be better for a law department than to pay the law firm only if it obtains the patent? This was the arrangement described, in so many words, by Amar Bhidé, The Venturesome Economy: how innovation sustains prosperity in a more connected world (Princeton Univ. 2008) at 85.

To be sure, the payment was almost certainly more than hours worked times rates charge, because the patent prosecution firm took on the entire risk of the patent being rejected. I suppose also that the firm had the right to decline to prosecute a patent.

Bill Henderson, Director of the Center on the Global Legal Profession and a Professor of Law at Maurer School of Law, co-authored an article in the ABA J., July 2011 at 41. The authors credit three interconnected forces with testing and stressing the legal market. None of them fit from the law department side.

“1. More sophisticated clients armed with more information and greater power to rein in costs.” The collective managerial nous of general counsel in the United States has risen in the past decade, including because more information pertinent to management has become available and with lower access costs. Whether this translates into dramatic internal changes or buyers’ leverage, however, is unclear

“2. A globalized economy, which increases the complexity of legal work while exposing U.S. lawyers to greater competition.” The overall impact on lawyers in US companies of increased global trade is unclear. For some law departments, worldwide trade and laws dominate, but for most that is peripheral. Exports have accounted for only about 10-13 percent of gross domestic product in the past few years and less than that from the massive services sector. More competition from providers of legal services around the world, such as the giant UK law firms or LPOS, can only benefit law departments.

“3. Powerful information technology that can automate or replace many of the traditional billable functions performed by lawyers.” This claim is not credible. Search technology has improved and e-discovery seems to be moving toward first-stage automated review, but what corporate lawyers do day-in and day out has not yielded to software in the slightest.