Last year around this time, Dec. 14th to be exact, I published post number 6,000. This post is the one-thousandth post after that one.

After 7,000 of these little critters, as always I fret the well will run dry; so far, however, the aquifer of law department management topics remains high. The blogable ideas just keep on flowing, like the Biblical widow’s cruse. Nor has the pace of metaposts slowed. It does seem, however, that I am not getting more blogs or websites referring readers here. Twitter accounts for an increasing number of my visitors.

I did a few new things during the last thousand posts. My series on Cottage Industrialists began and has had six segments. My first QR (Quick Response) code appeared and for the first time I offered readers a chance to download a file after they had registered through ShareFile. Also new was not the annual summary of the ten best posts per month but a comparison of them to those of the year before.

Happy New Year, everyone!

Writing in the ACC Docket, Nov. 2011 at 72, an author stresses the conflicts of interest a general counsel might have to face as she balances attorney-client privilege (in her lawyer role) against disclosure and full cooperation with government authorities (in her compliance role). She also argues that lawyers intimidate employees, usually unintentionally, and that discourages compliance reporting. Nor are attorneys throughout the company, visible and accessible, as seasoned compliance professionals circulate. Compliance is a “program” that needs management over a period of time, not what most lawyers want to be involved with or have the skills to carry out. For these reasons, the author argues for separate positions and against the chief compliance officer reporting to (or being) the chief legal officer.

Whether a general counsel can also function effectively as a company’s chief compliance officer has kept the heat on the contentious debate (See my post of Jan. 20, 2009: reporting lines of compliance function with 11 references; and July 23, 2010: compliance and ethics with 24 references and 2 metaposts.).

Since my last metapost, there have been more contributions to the debate (See my post of Jan. 12, 2011: Harrah’s GC combines the roles; Jan. 14, 2011: Ben Heineman view and rejoinder; Feb. 2, 2011: survey data on joint reporting lines; May 16, 2011: survey data on GCs as head of compliance; and Oct. 3, 2011: arguments for and against the dual report.).

Don’t worry if you don’t understand the header, I’ll translate. When I notice a potential accumulation, I collect six or more posts on a topic into what I call “metaposts,” of which there are now more than 500. Every now and then at least six metaposts cluster around a topic and when assembled I call them hyper-posts.

Reflexively, as loyal readers would appreciate, I decided to see how many hyper-posts this blog has generated since the first one in the fall of 2008. Astonishingly, there have been at least 19 hyperposts.

Billing (See my post of Jan. 2, 2009: 8 metaposts.).

Benchmarks (See my post of July 19, 2009: 10 metaposts.).

Benchmarks (See my post of May 29, 2011: 13 metaposts.).

Competitive bids (See my post of Oct.12, 2010: 7 references and 6 metaposts.).

Contracts (See my post of July 4, 2011: 11 metaposts, including 2 on document assembly.).

Creativity and innovation (See my post of May 24, 2010: 6 metaposts.).

Intellectual property (See my post of Aug. 19, 2009 #3: 6 metaposts.).

General counsel (See my post of Nov. 18, 2009: 6 metaposts.).

Levels other than general counsel (See my post of Oct. 11, 2009: 7 metaposts.).

Litigation management (See my post of Oct. 2, 2008: 12 metaposts.).

Managerial power (See my post of April 11, 2011: 13 metaposts.).

Marketing by law firms (See my post of July 16, 2009: 7 references and 5 metaposts.).

Patents (See my post of Dec. 31, 2011: 8 metaposts).

Process improvement (See my post of July 31, 2009: 3 references and 5 metaposts.).

Productivity through talent (See my post of Nov. 29, 2009: 12 metaposts.).

Reporting lines (See my post of Jan. 14, 2011: 8 metaposts.).

Software (See my post of Sept. 5, 2009: 5 references and 11 metaposts.).

Software for law departments (See my post of July 8, 2009: 12 metaposts.).

Statistics (See my post of Sept. 13, 2009: 7 metaposts.).

At a recent conference run by ALM, the general counsel of Rockwell Collins spoke about Six Sigma principles applied in his department. One of his slides addressed processes to determine alternative fee arrangements, and it mentioned “design decision-trees for process.”

Whenever a law department does some set of steps repeatedly – a process – it can take the time to look at who has to make decisions regarding what happens during the process and when. Once those points are identified it is not much more to create a decision-tree that embodies what has been learned. The diligent law department can even annotate the decision-tree with its accumulated experience (See my post of June 17, 2009: decision tree software with 6 references.)

These are the eight metaposts I have compiled since my last hyper-post on intellectual property (See my post of Aug. 19, 2009 #3: six metaposts on intellectual property.). The latest topics include:

Patent trolls (See my post of March 22, 2010: non-practicing entities with 6 references.).

Patent license agreements (See my post of April 29, 2011: licensing patents with 9 references.).

Two on patent software (See my post of Jan. 23, 2011: four categories of patent-related software with 15 references; and Sept. 5, 2009: databases for intellectual property with 11 references.).

Patent invention incentives (See my post of Dec. 13, 2010: awards for inventors with 6 references.).

Intellectual property generally (See my post of Dec. 29, 2011: IP posts in the past 1,000 with 25 references.).

Two on Research & Development (See my post of March 2, 2009: R&D with 12 references; and Sept. 20, 2010: R&D spend related to legal spend with 8 references.).

Lee Cheng, the general counsel of Newegg, spoke at the most recent Consero Corporate Counsel Forum. His portion of a panel covered relations with external counsel, including cost management. One bullet on his slides advised that “an excellent reason to terminate a relationship [is] when cost of outside counsel is the primary settlement driver.” Cheng’s sub-points were two: (1) “Very common if using large law firm in any dispute with settlement value <$500K, which a big firm can easily run up in 1-2 months. and (2) “Excessive legal cost should not be the primary reason to settle.”

Not having heard Cheng’s remarks, I can still see the wisdom of his slide material. It is a backhanded swipe at large law firms, whose costs mount very quickly even when defending a lawsuit that could be settled for an amount less than their fees. As to Cheng’s second point, settlement should be decided on in terms of possible damages (to be obtained or paid) or effects on ongoing business relations or publicity or factors other than the fees of legal professionals.

LawDepartmentManagementBlog is pleased to publish the submission of Phil Homburger, the founder and CEO of Synaptec Software, creator of the law department matter management system, LawBase. phil@lawbase.com

“We started programming LawBase in 1979. It became an actual product in 1981. We began before the IBM PC was announced and before any of the current tools were available. There was no affordable commercial database so we created our own. The first system LawBase ran on had a 23MB (yes, megabyte) hard drive that was 8 inches in diameter, weighed 40 pounds and was definitely bigger than a breadbox.”

“LawBase has over 1,000 users in law departments in companies as varied as hospitals, multi-national banks, restaurant holding companies, media companies and mortgage banks.”

“While most of our corporate clients use LawBase in the typical ways to manage matters, outside counsel, legal holds and litigation, one southern California bank has adapted it to perform risk analysis for underwritten loans. Factors such as a borrower company's domestic vs. foreign ownership and geography of operation are entered. Using a formula, LawBase calculates a risk assessment and creates automatic reminders for periodic review.”

Enterprise Strategy Group (ESG) recently surveyed 48 law departments (about a quarter of the respondents were general counsel) representing midmarket organizations (500 to 999 employees, 17%), larger companies (1,000 to 2,499 employees, 10%) and enterprise-class (2,500 employees or more, the remainder).

ESG was dismayed to find that in 2010 almost two out of three of those law departments did not “track e-discovery related expenses (i.e., document review fees, outside counsel fees, technology investments, etc.).” Perhaps they should be less surprised given who responded and the size of many of the companies – and thus their volume of lawsuits that justify tracking discovery expenses.

One out of three respondents was in a company with less than $1 billion of revenue, which would suggest less than four or five lawyers. Indeed, one quarter of the law departments had 1-10 total employees and a third had 11-24, which translates typically into 5 to 13 lawyers. Since it is fairly common to have one-to-two lawyers per 1,000 employees, even the largest midmarket respondents might have only a single lawyer (See my post of Dec. 2, 2010: lawyers per thousand employees.).

Smaller companies may have very little litigation, let alone of enough documentary bulk to require much e-discovery management, and thus no need to drill down to a component cost of it. In short, is the sample large enough of knowledgeable participants and litigation-intensive companies to draw a responsible conclusion about what spending information is tracked?

The report adds a methodological point not usually included in survey results: “After filtering out unqualified respondents, removing duplicate responses, and screening the remaining completed responses (on a number of criteria) for data integrity, we were left with a final total sample of 48 general counsel, attorneys and legal department executives.” I applaud the quality control, some form of which all benchmark surveys should apply, but wish there were more transparency regarding how they assessed “data integrity.”

“Regulatory proceedings” and “regulatory investigations” are terms used in the most recent Annual Litigation Trends Survey Report of Fulbright & Jaworski. No distinction is made between them, but one feels adversarial (investigations) whereas the other could be an administrative hearing like a rate increase proceeding.

Sixty percent of their 405 respondents (U.S. and UK) did not have a single regulatory proceeding commenced against them during 2010. That means forty percent did. The next page of the report (pg. 27) states that 55 percent of the U.S. respondents had retained outside counsel during 2010 for assistance in any governmental or regulatory investigation. The two figures mesh reasonably well.

The Eighth Annual Litigation Trends Survey Report of Fulbright & Jaworski found (at 13) that 18 percent of its 405 responding companies faced at least one lawsuit with more than $20 million at issue (5% of the respondents faced 6 or more). There is no breakdown given for U.S. and UK participants. A page later, the Report says that four percent of the U.S. respondents were involved in at least one arbitration of that size (12% among the UK participants).

If all we knew were those figures, is it plausible to bump up the percentage for the U.S. group, a country presumably more litigious and profligate than the UK, so that major lawsuits involve 20 percent of them? That would leave something like a ratio of one out of five with a $20 million+ lawsuit for each one out of 25 with one or more such major arbitrations. Hence, I put forward the 5-to-1 ratio of major lawsuits to major arbitrations.

A bit of corroboration appears later in the Report. The ratio of companies initiating at least one lawsuit during 2010 to those initiating at least one arbitration was 52 to 19, or about three lawsuits for each arbitration initiated.

I don’t recall seeing metrics on the distribution between lawsuits and arbitrations, and welcome comments.