A company and a trusted law firm might agree to a performance index (For more on indices, see my posts of April 3, 2005 regarding an Energy index; Aug. 14, 2005 on a trademark index; Aug. 28, 2005 on client satisfaction; Aug. 14, 2005 on patents; Sept. 10, 2005 on…
Under this title, Stefan Stern writes in the Fin. Times, June 20, 2006 at 8 that procurement “is precisely where a lot of the vital action is…” Notably, procurement has changed the “tone and nature of the conversations between companies and their service providers.” Stern illustrates this with in-house counsel…
I despise that term because of its sexist connotations. It conjures up old-fashioned and harmful images of Miss Americas on boardwalks. I dislike the term because it trivializes the process law departments should use to select firms, a process that deserves thoughtfulness and facts, open-mindedness and objectivity. The term is…
A stark and alarming statement, to be sure, and one that lades outside counsel managers with disagreeable expectations. The quote comes from Bottomline Technologies, a vendor of matter management plus e-billing systems, in an article of ACC Docket, May 2006 at 73. It suggests that law departments should look at…
Put crudely, some people think that make or buy decision mostly boils down to brains versus brawn. In-house counsel are capable of handling every-day legal questions, but where complexity or novelty rears up, hightail it to those smart outside counsel. The opposite view, considerably in the minority, is that commodity…
Some departments insist that their outside lawyers provide them with electronic versions of memos, briefs and agreements. The departments have in mind the cost savings that can result from them sharing appropriate work product with other firms, who will charge less because some of their work has been done for…
One common refrain in outside counsel guidelines is, “We will not pay for over-time costs.” It’s easy to see why a law department would not want to pay time-and-a-half for its work, unless it has demanded an emergency response by a law firm. This prohibition, however, like many that dot…
Law firms will continue to grow much faster than law departments (See my post of Sept.10, 2005 on size differentials.). The simple reason is that when two law firms merge, they do not lay off lawyers to achieve efficiency. The merger is purely additive. When two companies merge, inevitably the…
Studies have shown that the fully-loaded cost per hour of inside lawyer time in U.S. law departments is roughly speaking about $180 (See my post of Nov. 16, 2005 on fully-loaded costs per lawyer hour.). Although the data is less reliable, the blended rate of outside lawyers – the total…
A moral hazard exists when it is prohibitively costly for a principal (such as a law department lawyer) to directly monitor the efforts of an agent (such as the law firm partner who has been hired for a matter). It is manifestly difficult for the in-houser to observe – let…