Libor and a statistical technique for data. The London Rev. of Books, Sept. 25, 2008 at 11, explains that 16 banks call in their estimates of the interest rates at which their banks would borrow money. The group that calculates Libor [London inter-bank offering rate] “discards the lowest quarter and the highest quarter of the estimates, and calculates the average of the remainder.” The office that produces the Libor rates does not want the banks to be able to manipulate the average: “That risk is the main reason for the exclusion from the calculation of the highest quarter and lowest quarter of the input.” This could be a good way to calculate benchmark averages – drop the top and bottom quarter and average the middle half (See my post of Nov. 30, 2005: averages, medians and modes.).
A broader view of talent and what law departments need to strive for. The McKinsey Quarterly, 2008 No. 1 at 29, makes clear a sometimes overlooked point about talent. It isn’t just intrinsically talented lawyers that a law department needs. If you pay enough, you can generally hire the smartest and best lawyers. “The real challenge is making profits off those talented people,” says the article and I take that to mean the real challenge for a general counsel is maximizing the quality and productivity of the law department. A collection of all-star legal brains won’t do it. The piece argues that leading companies must combine talent and technology and organizational design to make the most from their employees at all levels of talent (See my post of Dec. 3, 2005: hiring stars for terrestrial jobs.).
Disadvantages of large law firms: high attrition rates. The Harv. Bus. Rev., Vol. 85, Jan. 2008 at 117, cites an ALP survey which shows that attrition rates at law firms with fewer than 100 professionals are typically 50% lower than at firms with more than 500 professionals (See my post of March 15 2006: turnover in law firms and loss of client knowledge.).