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Rees Morrison’s Morsels #135: posts longa, morsels breva

A complimentary dummy book from EMC on in-house discovery groups. I had to smile at the recent SuperConference when I saw that EMC was handing out complimentary copies of the familiar yellow and black explanations for morons: Jake Frazier, Bringing eDiscovery In-House for Dummies (Wiley 2008). The 38-pager offers very basic ideas on ediscovery programs within corporations, and it has some marketing material by EMC.

Instrumental variables and outside-counsel cost control. Instrumental variables are how economists infelicitously refer to factors that influence a cause and effect pattern (See my post of Dec. 12, 2006: instrumental variable for attraction of good lawyers and productivity; and April 8, 2007: size of company and compensation of specialists.). When you collect many facts and use regression to show how much each of them explains an outcome, you ought to watch out for instrumental variables. An instrumental variable does not itself belong in the regression, it is correlated with what you think are the explanatory variables (the facts), and it is uncorrelated with the error term (the residual that isn’t explained by your facts).

Here is an example. Perhaps you believe that hiring well-regarded law firms and partners from Ivy League law schools – two facts you could collect about many of your firms — reduces your total legal spend. An instrumental variable lurking in your regression might be the maturity of your company or its size, both of which may contribute much more to the total of your legal spend.

Another British term: “Uplift” in place of “bonus” (See my post of Feb. 9, 2006: British terms and references cited; Nov. 30, 2007 #2: charge-out rates; Jan. 4, 2008: more than 20 trans-Atlantic terms; and March 6, 2009: British management terms.).

Disbursements versus expenses. Are payments by a law firm to someone else a disbursement, such as to an expert witness or a photocopy shop? Are payments by a law firm for its own employees an expense? I have it on impeccable authority (the notorious Deep Grammar) that this is true so I will henceforth write with lapidary precision (See my post of Dec. 1, 2006: disbursements of law firms with 7 references.).