A.C. Grayling, Ideas that Matter: the concepts that shape the 21st century (Basic Books 2010) presents the venerable British philosopher’s summaries of 130 major concepts. Most covered in 2-3 pages, approximately 30 of them have already appeared on this blog.

One that has not is accommodation theory, devised in the early 1970s by Howard Giles. "Accommodation theory states that when people talk to each other, they adjust their behavior and manner of speech to take account of (to accommodate themselves to) the topic, the circumstances, and the other people engaged with them in the conversation" (at 2).

Grayling observes that the theory sounds simple on its surface, but he claims it gives profound insights into how miscommunication and misinterpretation can happen, such as within the legal departments and with clients and outside counsel. The theory has to do with information transmission. Whether the topic belongs in Grayling’s list is a hard question. Whether it can guide general counsel is an easier question.

UK matter management software. The UK’s largest friendly society LV= (aka the Liverpool & Victoria) has implemented Proclaim case management software from Eclipse Legal Systems for its inhouse legal and secretariat team to support internal clients. This item comes from Charles Christian’s Orange Rag, January 2012. Also, the legal services team at South Lanarkshire Council has implemented the Civica Legal system to improve case management, time recording and court bundling (See my post of Feb. 5, 2012: 11 matter management systems at LegalTechNY.).

CPA Global acquired by private equity firm. European private equity firm Cinven is to acquire the global IP management, offshore document review, LPO, and LSO (legal services outsourcing) business CPA Global for an undisclosed sum. The transaction is expected to be finalised over the next couple of months, according to Charles Christian’s Orange Rag, January 2012 (See my post of Nov. 1, 2011: Mitratech acquired by private equity firm.). Project Leadership Associates, which has a legal business consulting arm under partner Dan Safran, also sold itself to a private equity group in late 2011.

News of executives in the law department vendor space. Jeff Hodge has left doeLEGAL where he had served as Executive Director, Corporate for about a year. In late January, Wolters Kluwer promoted Richard Flynn to Group President and Chief Executive Officer of its Corporate Legal Services (CLS). CLS is a portfolio of businesses offering legal compliance and performance management solutions under brands that include CT Corporation, CT Lien Solutions, Corsearch, and TyMetrix.

Contract management software’s growth prospects. Forrester Research estimated in a Sept. 2011 webinar by Andrew Bartels on “The 4 Stages of Value from Contract Management” that sell-side contract management systems will grow 9.2% in 2011 and 8.5% in 2012.” That forecast comes from Exari’s white paper, Corporate Counsel Contracts Survey Report, Dec. 2011 at 2 (See my post of Feb. 5, 2012: list of 39 contract management offerings.).

Two conclusions have clarified for me as I have tussled once again with a conceptual structure for what goes on in law departments. My previous forays have resulted in a farrago of ideas and terms swirling around concepts, toolboxes, processes, methods, and tools.

It now seems to me that a set of three almost always applies: a cognitive category (a management concept), a set of related actions (a management process), and aids to accomplish those actions (management tools). Perhaps no longer do I need my constructs of “concept toolboxes” or “methods.”

Secondly, digging deeper, a part of speech applies to each set of three, which I will illustrate with one set of three: cost control – a noun form – means the concept; controlling outside costs – a verbal, gerundive form – means the process; and budget – an adverb applying to the verb – means one of the tools. This is a loose and creative metaphor but it may have usefulness.

Finally, I would nominate the following concepts to be important to general counsel and others in legal departments who have a significant hand in running it: engagement, emotional intelligence, ergonomics, focus groups, infographics, network, public relations (marketing), project management, Six Sigma and TQM, and transparency. I add these to the concepts discussed previously (See my post of Feb. 1, 2009: ten most important concepts; April 5, 2009: a second set of ten; April 22, 2009: 17 more important concepts; and Jan 3, 2011: accountability, competency, competition, expectations (perceptions), diminishing returns, experience curve, power, satisfaction, scope of responsibility, and trade-offs.).

Value of equity awards. I heard recently that a “binomial calculation” is more complex than Black-Scholes but more accurate (See my post of Jan. 17, 2006: Black-Scholes formula uses standard deviations; Jan. 24, 2006: software to calculate the formula; July 25, 2007: the binomial method; July 27, 2007: the lattice-binomial method of valuation; and Jan. 20, 2009: restricted stock.). That compensation expert told me that as a rough rule of thumb the value of an option is 1/3rd of the stock price when awarded. He also mentioned FAS 127 and FAS 123r that promulgate rules about these calculations.

ACC membership numbers from Docket circulation. The ACC Docket Statement of Ownership, dated Oct. 20, 2011 and published in December (at 94), says that the organization averaged during the previous 12 months 24,153 “mailed outside county paid subscriptions.” (I’m not sure if copies mailed within DC, presumably the “county” of ACC, adds to that number.) They also averaged 2,819 “paid subscriptions outside the mails”. Doesn’t this suggest that the membership of the Association of Corporate Counsel was just above 24,000 during that period?

Complexity increase over time in software license agreements. SmartMoney, Feb. 2012 at 59, cites research by NYU School of Law on the elaboration of software license agreements. From 2003 until 2010, the average number of words in those agreements grew from 1,615 to 2,235. That increase of 38.4 percent in 7 years bespeaks the increasing legal concerns of software publishers – and perhaps the general trend for contracts to metastasize.

Detail on what is charged to legal budgets. Are U.S. law departments charged for employer taxes and matches to 401K contributions and various supplemental retirement plans? I note one other point I heard. Benefit loads used to be about 30 percent but now in many US companies have dropped closer to 20 percent as employers have phased out pension contributions and cut back on medical and other coverage. If the general counsel is charged for the benefits of the department’s employees, this would drop the budget a bit.

Joseph Mazur, What’s Luck Got to Do with It? – The history, mathematics, and psychology of the gambler’s illusion (Princeton 2010) at 92, “Economists have long sought a meaninghful measure of risk, which should depend on a person’s specific financial situation.” Similarly, the finances of a company affect how legal risks are perceived and handled. The larger the company, the more risks it can take and still remain confident of continuing on if the situation worsens or blows up. This may be another reason why greater size is associated with lower total legal spending – the resources to absorb larger risks and therefore not to invest as much in their detection and amelioration.

Penny Simpson, energetic, funny, generous of her time and talents, caring of those around her, a completely warm and loving person, and incidentally the very capable founder of an innovative legal technology consulting firm, lost it all two years ago from a massive heart attack. Amazingly, you could say, she survived, or at least her body did, but the loss of oxygen to her brain robbed her of her abilities, personality, husband, and joyous élan.

Penny died New Year’s Day, and it is a sadder 2012.

Wordnik.com shows how English words are actually used in books and other publications. I searched for “law department” and found most of the references were to the law programs at universities, but with one charming exception. “After he took her picture, just as a lark, and displayed it in his shop, it was seen by an errand boy who worked in the law department of Loews, Inc.” The quote comes from J. Randy Taraborrelli’s, Sinatra, The Man Behind the Myth.

For “legal department,” there were quite a few more references in works of fiction. The one that made me smile was from a science fiction work called Moonwar by Ben Bova. “As I understand it,' the head of the legal department tried to explain, 'Edie Elgin beamed her report here from Moonbase.” Beats faxing.

Finally, in Dan Fogelman and Tom Clancy’s thriller, The Sum of All Fears, Wordnik salvaged this commonplace: “Nancy, could you tell the general counsel that I need to see him?”

In 1998, while a partner at Altman & Weil consulting to law departments as I have done for the years since, I wrote an article about ten 1999 resolutions for general counsel. Now, 14 years later, have those resolutions been acted on and come to pass?

No, since the first four still apply to many general counsel and their law departments.

1. Experiment with Non-Hourly Billing.
2. Bid Some Work Out Competitively.
3. Gather Benchmarking Data.
4. Evaluate Your Primary Outside Counsel.

The next three have a moth-ball smell, in slightly varying degrees. Pay mechanisms are not within the control of general counsel, client satisfaction seems to have disappeared into the vortex of the recession, and summary reports to fellow executives have never caught on.

1. Shift to Incentive Pay.
2. Assess The Satisfaction of Your Clients.
3. Distribute a Summary Report. “Distribute to senior management a report on the key facts of the law department and what it has accomplished.”

The next two are perennials, also, but the examples given have a charming old-school tone. I have quoted them to convey bygone concerns.

1. Learn Practical Techniques of Some Software. “You probably have a personal computer in your office, and you probably use email. But have you ever sat down and tried to make use of more than a small fraction of its capabilities? …. Along these lines, you might try out telephone headsets, voice recognition software, or productivity tools like PalmPilots.”
2. Improve Your Productivity Aids. “[Law departments] do not create form documents, documents annotated with comments, key points to check when an invoice arrives, questions to ask clients about non-disclosure agreements, or a collection of arbitration decisions – they have not organized and created materials that will improve their quality, time, and productivity.”

My tenth suggestion for a new year’s resolution still applies today, but not for three trends that have faded from the lexicon of general counsel (Activity Based Costing, System Dynamics, and Broadbanding).

1. Learn About A Current Management Trend. “Try to apply to your department what you learn about “Activity Based Costing,” “Knowledge Management,” “Intranets,” “System Dynamics,” “360 Evaluations,” or “Broadbanding.”

The New Year’s resolutions needed today may have moved beyond that set. For example, diversity, global reach, intellectual property, social media, and cloud computing could make some lists. I would still stand by most of the long-ago resolutions as they captured the intractability of a set of fundamental problems.

In litigation, loser pays in Germany and Australia: This blog has noted that the UK and Germany have loser-pays rules for litigants. According to the Economist, Dec. 10, 2011, that is the norm also in Canada (See my post of July 1, 2009: loser-pays jurisdictions with 6 references; June 2, 2011 #4: FRCP 68 look-alike in Britain; and July 18, 2011: Australia has loser-pay rules.).

Some states bar in-house counsel from providing pro bono assistance. Met. Corp. Counsel, Dec. 2011 at 38, has a column by Amar Sarwal of the Association of Corporate Counsel. He refers to efforts to promote pro bono services by in-house lawyers, then adds “Unfortunately, some states forbid in-house counsel from offering this kind of assistance.” Apparently Hawaii, Iowa and Minnesota are among those benighted states (See my post of Jan. 16, 2009: lack of pro bono opportunities for inside counsel.).

Acedia, also known as the “noonday demon.” The essay in the NYT Book Rev., Dec. 25, 2011 at 31, charmingly writes about the decline in attention at mid-day. A lawyer’s breakdown in concentration around lunch could be psychological (distractions), physical (hypoglycemia, lack of sleep), or ethical (lazy, poor work habits). Whichever the cause, the solution is a change of pace, a choice of a management task to accomplish, some discipline and some knowledge about the acedia effect.

Close to one-half of U.S. companies surveyed did not file a single lawsuit in 2010. Among the 200 or so U.S. companies covered by the Eighth Annual Litigation Trends Survey Report of Fulbright & Jaworski (at 15), 48 percent of them did not initiate a single dispute (litigation) during 2010 and 81 percent did not initiate an arbitration. Five years before, Fulbright had reported that half as many companies chose to stay totally out of the court house (See my post of Oct. 27, 2005: one quarter of companies did not sue during the year.). The movement to avoid litigation appears afoot (See my post of Dec. 20, 2011: secular decline in trials, although nothing said about lawsuits.).

Does benchmarking not deliver a sustainable advantage. The website of IACCM refers to benchmarking and adds a caustic comment. A company can benchmark “Against external organisations (but that is unlikely to offer any sustainable advantage).” I think the point is that if the industry bar keeps rising, your advantage disappears over time. I disagree that benchmarking should therefore be cast aside. Not all your competitors will learn from benchmarks and progress. Second, the discipline of gathering and thinking about metrics keeps reaping benefits, which is a sustainable advantage.

A stimulating review of two books about the history of science gave Nicholas Jardine, an emeritus professor at the University of Cambridge, an opportunity to summarize four high-level perspectives on scientific efforts. His review is in the Times Lit. Supp., Dec. 16, 2011 at 3-4. My application of those perspectives to management of law departments borders on presumptuous but the ideas are perhaps provocative.

The dominant narrative to date has been that a few far-sighted, rational, and progressive general counsel devised groundbreaking management tools. The “great GC” version of Whiggish progress has been unquestioned. Until, that is, someone were to take a “social constructivists” look at management beliefs “as the products not of disinterested inquiry, but of pursuit of social interests.” Law departments and their scope, responsibilities and operation result more from the finances and power of companies or the connivances of politicians and regulators than the studied breakthroughs of heroic senior managers in law departments.

A third and very different perspective privileges neither rational nor social factors in figuring out why law departments operate as they do and have changed over time. The “actor network” view advocated notably by Bruno Latour would investigate law departments and their agents – employees, law firms, business executives, judges, perhaps journalists and consultants – as the forces for change. Finally, in a fourth turn from the history of science, Jardine writes about “decentring” and its emphasis, were it to study law departments, on such lesser players as direct reports to the general counsel, heads of operation, paralegals, and hidden lawyers within companies (See my post of March 9, 2009: survey estimated the percentage of hidden lawyers.).

Readers with a pragmatic streak may have abandoned this post by now, but it is important, instructive, and even inspirational to step back, become aware of and think about what we take for granted and what other viewpoints might enlighten us.