Some readers of this blog might miss posts that I believe are especially stimulating, so I have been compiling each month the ten that hit this criterion (See my post of July 11, 2009: May; July 31, 2009: June; and Sept. 5, 2009: July.). After much deliberation, I selected these ten from the August batch and added a brief summary. Click if you want to read the full post.
- Push your law firms to budget matters by means of a narrowing fee funnel (Aug. 4, 2009)
- Research: embedded ties between law firms and departments lower rates yet can increase firm profits (Aug. 5, 2009)
- 32 steps each legal department can take to protect the environment (and reduce costs) (Aug. 7, 2009)
- Dispersed benefits for a lawyer from external cost control, but concentrated costs (Aug. 10, 2009)
- The rational-choice model of economists as a framework for understanding legal departments (Aug. 12, 2009)
- No tiers on my pillow: flaws of tiered discounts from hourly rates based on volume (Aug. 13, 2009)
- 7. Law departments as “complex systems” (Aug. 24, 2009)
- Thirty (30) suggestions for better e-mail effectiveness (Aug. 26, 2009)
- The open-book approach to reaching a flat-fee agreement with a firm (Aug. 31, 2009)
- To compare different metrics, use the technique of stating them as standard deviations (Aug. 4, 2009)
As a transaction or case proceeds, insist on tighter budget projections.
Empirical research shows close ties with a client correlate with lower hourly fees.
Everyone in every legal department can apply several of these techniques.
Cost control benefits everyone, but if the deal goes sour, one person pays the price. The result: hard to implement cost-saving initiatives.
Self-interest, rationality, and incentives are the core ideas of the rational-choice model, which applies to much of what happens in law departments.
Three difficulties with tiered, volume discounts from law firms.
No legal department obeys “laws of management.” Our understanding of legal departments will only come with a holistic sensibility. Unintended consequences happen all the time and the stasis of equilibrium – if it ever reaches that – is frequently punctuated. People change and modify their behavior
Having evolved to homo emailiens, so these suggestions should be required reading
Tell your key firms everything you can about your matters and spending on which they might bid fixed fees.
Convert your benchmark metrics into standard deviations so that you can match yourself against peers on various metrics that have different scales.