The law department of chipmaker Qualcomm has elevated the term “profit center” to a prodigeous level. The revenue the law department and its outside counsel brought in from patent royalties in 2005 accounted for more than two-thirds of the company’s $2.3 billion in operating earnings. According to BusinessWeek, Oct. 30,…
I have counseled against chargeback rates that differ for lawyers of the same department (See my post of May 14, 2006 which attacks multiple rates inside.). At the same time, I urge different billing rates for the same outside lawyer (See my posts of Jan. 13, 2006 and May 14,…
Every year, the value of technology owned by a law department loses some value – it depreciates. The different treatment by law departments of the depreciation charge on hardware and software makes for differences in what they report as their total legal costs. Total legal spending, therefore, has yet another…
We don’t hear anymore the din about online auctions for legal services (See my posts of Sept. 4, 2005 regarding GE’s online auctions in 2005; and March 12, 2006 regarding GE in 2003.). For good reason. The process belies thoughtfulness and professional standards; the dregs of procurement-style cost bludgeoning are…
“Companies spent 32 percent more on outside counsel for intellectual property litigation in 2003 than in the previous year, Chuck Fish, the chief patent counsel for Time Warner, told the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property earlier this year.” Further, the NY Times, Sept. 24, 2006…
Law departments all say “Our costs are driven by our client’s business activities!” True, but the obligation to manage those costs as effectively as possible remains the law department’s. To get some traction here, law departments need to measure inputs and outputs. That is to say, they need to track…
Total legal spending relative to revenue declines as companies grow larger (See my posts of April 5 and Sept. 10, 2005 that propose several reasons; but also my post of July 5, 2006 that discusses some contrary arguments, including being deep pockets and innovators of business practices.). Other reasons come…
BusinessWeek, Issue 4001, Sept. 18, 2006 at 42 describes breathlessly Dupont’s use of R.R. Donnelly’s OfficeTiger for legal services performed in the Philippines and India. Some 30 Filipino attorneys, including three who have passed US bar exams, are teamed with 50 other staff on a massive litigation support effort. In…
William Ross, a professor at Samford University’s Cumberland School of Law, conducted a billing survey in 1996. Although the results are a decade old, nothing has happened since then to change the landscape, so the findings are disturbing. Perhaps. Ross found that “two-thirds of the attorneys (and three-fourths of the…
Before law departments distribute requests for proposal, they sometimes agitate themselves over whether to disclose how much they have spent on outside counsel. Confidentiality agreements can assuage that angst, but law departments should accept that what they distribute to a few law firms might leak for all to read. Not…