A quote in a recent article in the European Lawyer pointed out a perceived shift in discourse recently from “value” to “cost.” General counsel used to speak about value; now, more bare knuckled, they demand lower costs. Whether or not that shift is underway, I thought of Oscar Wilde’s quip: “A cynic is a man who knows the price of everything but the value of nothing.” What else does the claimed re-orientation imply in terms of differences between value and cost?

1. Cost is objective; value is subjective.
2. Cost means hour-based bills; value favors alternative fees.
3. Cost favors law firms and cost-plus margins; value favors law departments and effectiveness for fees paid.
4. Cost favors offshore, negotiation, competitive bids; value favors data analytics.
5. Cost can be benchmarked; value is incommensurable.
6. Cost is CFO, procurement and audit; value is lawyer and professional judgment.
7. Cost is clear completion or deliverable; value is mitigating risks.
8. Cost is reality; value, to co-opt a quip, is the triumph of hope over experience.

Some general counsel and the lawyers on their team believe in “lawyer exceptionalism.” They haughtily maintain that they are exceptions to the rules that apply to others in the corporation. Wrong, for the most part. Here are some comments.

“Finance has the craziest ideas about accruals and budgets” (See my post of June 18, 2009: interplay of finance/accounting and legal with 19 references and 2 metaposts.).

“Procurement practices don’t count for us lawyers” (See my post of March 1, 2008: procurement with 17 references.). But many of the disciplines of sourcing groups make sense for in-house lawyers to apply.

“HR policies and forms misunderstand the talent of lawyers” (See my post of June 14, 2009: HR departments with 16 references and 3 metaposts.). Yet policies of a company regarding its people should apply with equal force to its employed lawyers.

“IT doesn’t understand legal.” (See my post of June 16, 2009: Information Technology staff group with 23 references and 1 metapost.). The two sides spar and spat, but they need each other.

“Facilities fails to appreciate that we need big offices and lots of conference rooms” (See my post of Jan. 29, 2009: cost per square foot of offices; and March 11, 2009: conservation for law departments with 7 references.).

“Six Sigma has huge defects when applied to what we do” (See my post of Feb. 13, 2008: Six Sigma with 18 references.).

And so on. No wonder legal departments have a bad rap in the corporate sandbox.

Law departments certainly do differ from other staff groups (See my post of April 25, 2009: ways legal is not like other staff functions.). That said, internal lawyers are still company employees and they should abide by the rules and not irritatingly and arrogantly hold themselves out as privileged.

You may want to try this to encourage your lawyers to learn more about the business they support (See my post of May 7, 2009: learn as much as you can about your company’s business.). At a retreat, Karen Wishart, the General Counsel of TV One, assigned her legal team to come up with a new business idea, laying out the marketing approach, projecting the financials, filling in the resources needed, doing everything business people do. She explained during her remarks at the SuperConference that her team of lawyers complained about the project, which they labored through for two weeks after the retreat ended.

The effort culminated with a presentation by the lawyers to the CEO and CFO, but before then there was much consternation and grumbling. Afterwards, however, the participants realize they had learned a huge amount about the business, the difficulties of their client colleagues, and their role in business initiatives.

You build strong trust and respect with your clients if you never make them feel dumb. They may do something or ask something that seems so basic to you, but never make them feel silly. That alienates them; it patronizes them. This rock-solid advice came from a panelist at the most recent SuperConference, Marti Wronski, General Counsel of the Milwaukee Brewers.

Posts on this blog have criticized corporate lawyers who look down on their clients or intimidate the non-lawyers among them (See my post of Oct. 24, 2005: a risk if you explain a lawsuit’s costs and ask a client to sign off; April 15, 2006: listen to clients, don’t patronize them by rushing ahead; May 8, 2007: lawyers can intimidate non-lawyers; and Dec. 10, 2007: “hold the hand” of executives demeans them.).

You don’t like it when some high and mighty partner trots out the “I know more than you” routine, so don’t do the same with your colleagues. A few times I have called out patronizing attitudes of some law firm partners (See my post of Oct. 30, 2006: condescension by law firm partners; Nov. 19, 2005: another patronizing British comment about law departments; June 9, 2007: UK views about the relative stress inside and outside; Aug. 4, 2008: disparagement of inside counsel; and June 15, 2008: some reluctance to offer instruction since it may come across as patronizing.). More broadly, I dislike patronizing, disparaging remarks about in-house (See my post of June 9, 2007: superior minds at law firms; and Oct. 12, 2006: “little merit to a full-service law department”.).

A session at the most recent SuperConference concerned what inside lawyers need to know about the business of the company they support. Marti Wronski, General Counsel of the Milwaukee Brewers, made the interesting point that ambitious lawyers shouldn’t “wish for too much too soon,” in part because the higher you rise, the more you are expected to understand intimately how the business works. If you haven’t learned enough business, you won’t be ready. At the level of general counsel, that person serves as an executive of the company, expected to be fully conversant with the full span of business issues that arise and decisions that need to be made.

For that reason, Karen Wishart, the Chief Legal Officer of TV One, invested in an executive MBA program, “which made a huge difference in my career.” Wronski mentioned that she reads all the baseball trade journals so that the accusation “You don’t understand how we do things,” strikes out.

Probably no data is available on professional development training taken by inside lawyers that is oriented toward substantive legal topics as compared to business-related topics. If we had that data, I am sure it skews heavily toward legal updates and practice tips, not how to understand the flow of cash in your company.

General counsel want to show clients the value produced by the legal team, but often haven’t a persuasive way to convey that. The new general counsel of Hitachi Global Storage Technologies, Christopher Dewees, wants the efforts of his dozen or so attorneys to be better understood by clients. He explains some of his efforts in Corp. Counsel, Vol. 16, April 2009 at 47. The quote in the header starts the topic.

Dewees wants to apprise clients of the number of new patent applications, “how much the company pays in customs duties, or how and where it directs whistle-blower complaints.”

Metrics have been good to me, and I applaud his efforts to quantify the work of the law department (See my post of Feb. 25, 2008: practice area benchmarks with 24 references.). Numbers tell some of the story – you can tally up contracts completed, NDA’s signed, cases closed, and on and on – but some data makes little sense. In that senseless category are payments for customs duties and traffic direction on 800-line calls.

Law school and law firm culture inculcate three orientations that pull at cross-purposes to what consummate in-house attorneys need to do. These three values, as quoted, come from a General Counsel Roundtable publication.

“Excessive focus on quality.” This may serve law review authors and citation checkers as well as associates racking up billable hours, but in the hurly-burly of business, practical advice given quickly rings the bell. As they say, the perfect can be the enemy of the good.

“Bias against scalable solutions.” Bespoke craftsmanship, one-on-one counsel, and a credo of careful attention to each client’s needs hobbles an in-house lawyer’ embrace of technology that allows knowledge sharing and one-to-many delivery systems (See my post of May 18, 2008: self service with 7 references.). In-house lawyers need to promote leverageable, disseminated legal knowledge.

“Interest in in-person service delivery.” Old-school, set up a meeting in a week, shake hands and sit down to talk it out stumbles when clients in every time zone bombard the corporate lawyer electronically. Instead, intranet postings, emails, distribution lists, and teleconferences are the preferred and necessary practice in-house.

Three times I have commented on how to train internal clients and I mentioned 11 different techniques (See my post of July 14, 2005: lecture, lecture discussion, film, small group discussion, case studies, role playing, practical exercises, and unstructured exercises; Dec. 19, 2005: “in-class training, computer-based training [CBT], and paper-based training; and Dec. 20, 2005: checklists of what clients need to gather before calling and posts on the intranet.). Nearly a score of additional training tools are available to law departments

1. Explain your advice
2. Publish answers to Frequently Asked Questions
3. Circulate educational material
4. Circulate horror stories of other companies who ran afoul of the law
5. Post material online, such as compliance training (See my post
6. Institute Requests for Legal Services that have on them some assistance (See my post of March 26, 2007: pros and cons of Requests for Services.).
7. Assign a gatekeeper at each major business unit (See my post of Oct. 17, 2007: a client gatekeeper to review major bills.).
8. Negotiate Service Level Agreements (See my post of March 6, 2009: service level agreements (SLA) with 6 references.).
9. Make available document assembly applications that include question-specific help (See my post of Feb. 26, 2008: document assembly with 16 references.).
10. Annotate documents with plain-English explanations
11. Push back requests for legal services if the clients is not ready and explain how they need to prepare more
12. Circuit ride and visit clients as a store-front lawyer (See my post of Oct. 10, 2008: visits by patent attorneys.).
13. Conduct simulations
14. Release an on-line game
15. Email a “Legal Learning of the Day” (See my post of June 1, 2008 #3: Law in the Loo.).
16. Distribute “cheat sheets” for common processes that involve the legal department
17. Produce training videos (See my post of Feb. 25, 2007: video recordings as a knowledge management tool; and Oct. 3, 2008: ethics training at Lockheed Martin
18. Record podcasts (See my post of Feb. 26, 2009: my podcast on management topics.).

Lawyers for corporations always want a “seat at the table.” But sometimes, if the truth be told, it is a good idea not to be at the table. For example, if a business manager brings along an in-house lawyer to a meeting with another company’s executive, the mere presence of the lawyer may dampen the do-business spirit of the meeting (and I do not mean that collusion and anti-competitive behavior rears its head). A lawyer conveys to the other side significance and risk. An acute corollary of this is sending outside counsel to an EEOC hearing. “Wow,” thinks the examiner, “they must really be worried about this, so let me dig deeper.”

Some executives may dislike bringing an internal lawyer to a meeting lest the lawyer intimidate the other side or push them to bring their own lawyer (See my post of May 8, 2007: lawyers may intimidate their own clients.).

An article in The Bus. Lawyer, Vol, 64, Feb. 2009 at 309, makes the point that lawyers often take the blame for a deal collapsing when in fact business executives sidestepped tough issues that eventually came to light through the lawyers and scuttled the deal. “Businessmen when bargaining often talk only in pleasant glittering generalities, think they have a contract, but fail to reach agreement on any of the hard, unpleasant questions until forced to do so by a lawyer.”

This criticism – “deal breakers” – is a cross in-house counsel must bear. Unfair as it may be, clients want to blame someone.