For a retreat that I facilitated, the lawyers of the department suggested several dysfunctional situations that they wanted to improve. All of them evidence failures of teamwork or collegiality. (See my post of April 5, 2009: teamwork and collaboration internally with 16 references.).
Lawyers failing to get another lawyer to review their work on significant documents, such as written legal opinions and template agreements. This leads to poor work going to clients, often leading to greater embarrassment and work that needs to be corrected.
Lawyers criticizing another lawyer to a client. Often such criticism is done by implication, not directly.
Lawyers siding with clients when client is criticizing the legal department for slowness, getting in the way, being too conservative, or something similar.
Lawyers telling a client that an idea is "dumb" or some other pejorative statement, rather than taking the time to explain the legal problems with the idea. This usually happens with lower level clients.
Lawyers advising against a project when the advice is based not only on legal concerns but also on the lawyer’s business judgment that the project is not appropriate for the organization, but the lawyer fails to expressly distinguish between the legal and business concerns.
Lawyers failing to return phone calls of colleagues.
A recent survey of senior in-house attorneys asked them to select the obstacles they face to making effective use of productivity metrics. The survey, by LexisNexis CounselLink entitled “Effects of the Current Economic Downturn on U.S. Law Departments” 2009 at 17, offered respondents six choices. I have listed them in order of frequency, with the percentage of respondents who marked that choice in parenthesis. My comments follow.
Time (22%) – competing demands for time always dogs in-house lawyers. For some managers, the opportunity cost of collecting, vetting, analyzing, and acting on metrics stands out more prominently than the hoped-for gains (See my post of Sept. 9, 2008: opportunity costs of information can be calculated.).
Accuracy of Information (19.8%) – garbage in, garbage out and the costs of verification
Having the Right Tools (15.4%) – a matter management system is a prerequisite
Type of Information (9.9%) – often law departments track what is not useful (hourly billing rates, according to the survey, for example) and fail to tackle harder-to-quantify information that is useful, such as productivity or risk
Communication (7.7%) – I think this may mean to most people the challenge of conveying the results of metrics tracked effectively
Budget (7.7%) – can you afford the people and technology to track metrics
What is missing is “Acting Productively on the Metrics”. It is easy to collect metrics, hard to act.
I woke up this morning thinking of “To sleep, perchance to dream of law department management effectiveness.” Later, I hunted through my archives to find my posts on slumber (See my post of May 2, 2008: sleep enhances memory; Nov. 7, 2007: sleep relieves stress; Feb. 20, 2007: sleep on it to make a good decision; Aug. 26, 2008: sleep-deprived associates; Dec. 5, 2007: circadian sensitivity; March 5, 2009: work and study when you are sharp; and Jan. 30, 2009: Mark Gluck on benefits of sleep for mental sharpness.).
For the beverage that counters sleepiness, this blogger has brewed several gulps of posts (See my post of Dec. 19, 2007: grounds for insight; April 22, 2008: caffeine and adenosine; and July 13, 2008 #1: coffee slows mental decline.).
Now, back to dreaming about grande vanilla lattes, extra hot.
Queuing theory is a mathematical approach to the analysis of waiting times, particularly where requests for service arrive randomly. The terms and techniques of this discipline could help general counsel.
This post draws on William J. Stevenson, Operations Management (McGraw-Hill, 2005, 8th Ed.) at 779. For a legal department, clients request assistance as issues arise: they queue. They dislike waiting for assistance. One way to reduce waiting time and the associated loss of goodwill is to schedule arrival times and maintain constant service times, such as where reservations are made in advance. Managers of in-house lawyers wish they could!
“The goal of queuing analysis is to balance the cost of providing a level of service capacity with the cost of customers waiting for service.” The “service capacity” of a law department is the number of its lawyers and paralegals, taking into account skill levels and tools available, while the “cost of customers waiting” includes not only the dissatisfaction of clients impatiently expecting answers or documents but more importantly the business opportunities of the company at risk from legal delays.
Queuing theory provides a vocabulary for legal department managers. “Capacity” in a legal department does not usually grow linearly, it grows by a step function: you add or lose a whole lawyer, not a third of a lawyer. A law department would be considered an infinite-source situation, since the potential number of clients greatly exceeds a law department’s capacity. Each lawyer would be considered a “server” or a “channel.”
Queuing theory might help formalize our understanding of throughput efficiency (See my post of Jan. 17, 2007: improved turnaround time for contracts; and March 26, 2007: turnaround time shown by matter management system.). Law firm responsiveness could be analyzed under queuing theory. Even if the theory were to explain some results, a large measure of what legal departments and law firms achieve would elude the metrics and insights of the theory
Large size limits team effectiveness. An article previously discussed (See my post of May 29, 2009: do general counsel matter.) cites research that “performance problems increase exponentially as team size increases.” The ideal team consists of approximately six people.
Coordination and motivation drags down team effectiveness. The Harv. Bus. Rev., Vol. 86, May 2009 at 100, takes another swing at teams: “Research consistently shows that teams underperform, despite all the extra resources they have. That’s because problems with coordination and motivation typically chip away at the benefits of collaboration.” The pros and cons of teams are complex (See my post of April 5, 2009: teamwork and collaboration internally with 16 references.).
Insufficient familiarity blocks teams. The article observes that it is a myth that teams whose members grow comfortable with each other suffer performance fall off. “The problem almost always is not that a team gets stale but, rather, that it doesn’t have the chance to settle in.” General counsel may fall into this trap if they don’t allow enough time for a team to gel.
Lack of training hobbles teamwork. Teams benefit from coaching as a team (See my post of Feb. 1, 2009: project teams of law departments with 39 references and 4 metaposts.). There are books, consultants and psychometric instruments that can help teams mesh better
The blog Legal Project Management, by the Managing Director (Asia) at Global Colleague, cites an article by Sanjay Bandhari, head of e-discovery at Ernst & Young. Bandhari’s article discusses the benefits of applying project management skills to electronic discovery.
The article focuses on four project management (PM) skills, which he refers to as "overarching PM techniques." I quote them because all projects in legal departments need to attend to these concerns. They are:
- stakeholder management,
- communications management,
- budgetary management, and
- risk management.
For example, if you are head of a project to reduce the number of law firms retained by your legal department, the stakeholders include clients, accounting staff, external counsel and your peers who manage outside counsel. Communications means keeping everyone apprised of how the project is proceeding and what are the issues. Budgetary management means marshalling the people and resources needed for the convergence process and accounting for expenditures. Finally, the project manager needs to attend to risks, which are always part of change management (See my post of Feb. 1, 2009: project teams in law departments with 39 references and 4 metaposts.).
One of the panels at the SuperConference stressed the importance of term sheets for clients. Term sheets help clients think through what they ought to nail down regarding a transaction. Their spadework saves lawyers’ time and saves the lawyers from having to harass the clients for answers to crucial factual questions (See my post of March 11, 2007: Kraft project with term sheets; and Aug. 31, 2005: Food Lion and its use of term sheets.).
Term sheets play an important role in the whole contract process and the productivity of lawyers who nurture contracts (See my post of May 5, 2006: contracts with 15 references; and July 17, 2008: contract lawyers with 12 references.).
A common presumption is that in-house US lawyers put in an average 1,850 chargeable hours per year. These hours the corporate client would pay for if the corporate lawyer were with a law firm.
Testing this presumption, we need to start with an accepted definition of a legitimate internal “chargeable hour” (See my post of May 16, 2006: my proposed definition of “chargeable hour”; and Nov. 23, 2008: how hard it is to prove how hard internal lawyers are working.).
Next, to confirm or alter the 1,850 hour figure, we need data on how many total hours in-house lawyers typically log. Surveys give some ballpark numbers (See my post of Sept. 25, 2005:1,850 as a normal assumption for in-house chargeable hours; and Jan. 3, 2008: 1,850 calculates costs for senior lawyers.). Other surveys give total hours worked (See my post of May 24, 2007: average 50 hours a week among Canadian corporate counsel; Sept. 25, 2005: “generally 45-50 hours” worked per week; and April 13, 2006: 52% on in-housers said 41-50 hours a week while 38% said 51-60 hours.). These self-provided figures raise doubts, since lawyers may exaggerate their hours worked (See my post of Nov. 20, 2006: Aviva’s law department reports an ideal of 1,320 chargeable hours a year.). One of the difficulties in this area is the scarcity of data about time tracked internally, and, indeed the accuracy of that data.
We then have to reduce the total time for time no client should be charged (See my post of Feb. 17, 2008: questions whether 1,850 is too high; Feb. 25, 2008: wasted time during the day; May 20, 2009: administrative and management time estimated at 5-10%; and Oct. 30, 2005 on in-house counsel resent administrative demands.)
My personal view, developed in part from walking many halls of law departments at 6PM, is that 1,750 is probably a more representative figure for hours clients would pay for each year from their lawyer colleagues.
If the lawyers of a law department track their time, what constitutes “chargeable time” has some degree of subjectivity (See my post of May 16, 2006: “Count time as ‘chargeable’ when you are working on any project for or requested by your client, but not if you are doing something that members of the law department do to maintain its operations, such as evaluations of law firms or members, software selection, CLE, professional development, staff meetings, retreats, budgeting and other administrative or organizational activities.”). Even if in-house lawyers do not track their time, some of their hours are not devoted to practicing law.
A missing metric in our field is time spent by lawyers to maintain the operations of the department. Partly that is because some tasks might be deemed internal to the legal department and not chargeable, such as status reports sent up the line or evaluations of law firms that work only for a particular client or budget reports prepared for a client; alternatively, they might be deemed chargeable if specifically incurred for a particular client.
In any event, it seems plausible that at least two hours a week for a typical in-house lawyer goes to activities that neither law firm nor an in-house attorney would (should) charge for. Five percent of overhead time should not shock anyone for non-billable time, and may well be too low, especially for senior lawyers in law departments who bear management responsibilities.
What this blog defines as “descriptive metrics” are numbers that describe some aspect of the quality and quantity of work handled by a law department (See my post of Feb. 19, 2009: supervisory responsibility; Feb. 26, 2009: start of a series on such metrics; March 8, 2009: in-house lawyers; March 9, 2009: fee concentration with firm size and effective rate; March 11, 2009: management initiatives; March 26, 2009: degree of client reliance on the legal department.). Descriptive metrics are benchmarkable – you can compare your metrics to your peers’ – or they can create a profile of the department. My long-term goal is to develop a “fingerprint” of a law department through a set of descriptive metrics.
Specifying how hard in-house counsel and staff work ought to be fairly easy, but isn’t (See my post of Nov. 23, 2008: how hard it is to prove how hard internal lawyers are working.). The raw material may be available – matters and hours – but the proof remains difficult. Partly this is because administrative tasks detract from productive time (See my post of Oct. 30, 2005: admin time squeezing out other time.).
Descriptions of workloads start with matters (See my post of March 26, 2008: matters with 14 references.). With matters counted in a consistent way, you can depict legal departments in terms of matters per lawyer, types of matters, matters per practice group and other variations. Obviously complexity of matters deeply influences workload (See my post of Dec. 27, 2008: complexity of legal practice with 20 references.). I know of no unarguable way to quantify complexity.
Many descriptive metrics in the domain of workload consist of practice area benchmarks (See my post of Feb. 25, 2008: practice area benchmarks with 24 references; Dec. 23, 2008: normalized lawsuits per million dollars of litigation spend; and Dec. 23, 2008: normalize between publicly-traded and private corporations.). Similarly, contract management software may generate workload metrics (See my post of Nov. 22, 2008: contract management software with 11 references.).
Internal time tracking allows many more descriptive metrics about workload (See my post of Nov. 22, 2008: internal time tracking with 16 references.).
