Rees Morrison’s Morsels #168: the long and the short of it (in brevia veritas)

Functions, linear and otherwise. A function of some variable is linear if the plot of the function creates a straight line when you plug in different values for the variable. Think of X=3Y. If you plug in different numbers for the variable Y, the function of that equate creates a straight line. Function is another way to refer to the equation that summarizes the relationships between numbers. As an example, the larger the law department, the lower its total legal spending as a percentage of its company’s revenue – that is a function. The variable would be the revenue and the output graphed would be a line with different spending benchmarks (See my post of July 25, 2010: linear descriptions of data with 11 references.).

Another criticism of the Delphi technique. A 1991 study “showed that the Delphi was no more accurate than other decision-making methods, because ‘consensus is achieved mainly by group pressure to conformity.’” This debunking comes from David Orrell, Apollo’s Arrow: the Science of Prediction and the Future of Everything (Harper 2007) at 240 (See my post of Dec. 9, 2005: Delphi technique — nominal group technique; Feb. 1, 2006 #1: introduced in 1964 by Rand researchers; Aug. 25, 2009 #2: criticism of Delphi technique based on same research; and June 16, 2011: two descriptions of the technique.).

An app from TyMetrix for rate information. LTN Law Tech. News, June 2012 at 54, mentions that TyMetrix offers a free app for mobile devices that uses data from its Real Rate Report to provide average hourly rates of law firms (See my post of May 31, 2012 #2: first law department app.).

State taxes on legal services. Other than in five states, law departments do not have to pay state taxes on legal services billed to them. The exceptions are Delaware, Hawaii, New Mexico, South Dakota, and Washington according to Legal Spend Management: An International Perspective, a white paper produced by Jeff Hodge and Bridgeway at 3 (See my post of July 17, 2005: currency complications and VAT; and Dec. 1, 2006 #4: US state taxes on law firm services.).

A metaphor to visualize why companies spend lower percentages on legal services as they grow larger. Thinking about why increasing revenue correlates with decreasing legal spend as a percentage of revenue, a metaphor captures such economies of scale. Visualize the demand for legal services by a company as multiple pipes that at different times and volumes flow into balloons of varying sizes. Each balloon stands for a lawyer (let’s simplify away all the other staff). Some balloon lawyers are too big for the pipe that fills them, so there is “untapped capacity”; some balloon lawyers are too small to catch all their flow. As law departments grow and add balloons or adjust existing balloons, they better match them to the flows. The larger the department – the meta-balloon – the more efficiently it matches the demand for legal services (See my post of Nov. 7, 2010: metaphors cited explicitly on this blog with 25 references.).

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