Articles Posted in Productivity

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One unheralded piece of the contract suite, by which I mean the array of software and processes that let a company get its contracts executed, is the approval matrix. It guides lawyers and clients regarding the level of manager who must sign off on a non-standard change to a contract. To accept unlimited liability may require the CFO’s signature; to accelerate delivery by more than three weeks may need SVP approval. I do not think all that many companies have an approval matrix, but it makes good sense.

The other parts of the suite include templates, standards that the company insists must be covered, a guide for contract negotiators, and language to propose if the other side requests certain changes.

Most of my posts in this domain concern form contracts (See my post of Dec. 9, 2005 #2: consultants who prepare templates; Jan. 15, 2006: GE used Six Sigma to shorten form contracts; Feb. 12, 2006: law firm puts templates on extranet; Dec. 10, 2007: an application of knowledge management; Dec. 17, 2007: style guides for contract templates; Nov. 22, 2008: contract negotiation guides compared to templates; Dec. 9, 2008: templates in Exari document assembly; Dec. 21, 2009: “governance documents” include templates; Jan. 7, 2010: 100 templates at Catholic Healthcare West; April 19, 2010: software to create templates; and Aug. 17, 2010: Microsoft converges its contract templates.).

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A computer scientist named Maurice Halstead devised a measure of software complexity and the mental effort required to create it. As explained in IEEE Spectrum, Oct. 2010 at 34, the quantitative measurements, later called Halstead metrics, “counted the number of unique operators and operands as well as the number of operator and operand occurrences in source code.”

Translate that function into the context of legal agreements. Software could count the number of defined terms, the number of times they are used, the number of paragraphs (or pages or words), the number of nested lists, and other characteristics of agreements that reflect complexity. With that software and a common measure of legal complexity, it would be easier to assess the productivity of legal departments, the level of client demand for agreements, the value delivered by law firms, and improvements in the structure and content of agreements. Maybe this blogger will be remembered as the progenitor of “Morrison metrics”?

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A post on the blog of Emptoris relates some of the comments made by Steve Harmon, Cisco’s Senior Director of Legal Services at the Emptoris Empower 2010 conference. I highlight two points.

“As a best practice, Harmon emphasized the importance of streamlining the number of approvals necessary for contract implementation, noting that his department had managed to reduce the number of required approvals in some cases from as many as forty to as few as seven.” Most of those approvals must be on the business side, not within the legal department, so this is a good example of moving beyond your function’s boundary to improve efficiency. It is “end-to-end” process improvement.

Harmon also “reported on the success Cisco has achieved by focusing on the use of e-signatures, which he described as a ‘low hanging fruit’ overlooked by most organizations. In addition to helping to expedite processes – a factor that can have a tremendous impact on operational efficiency – e-signatures are actually much stronger than physical signatures in terms of making it difficult for vendors to repudiate agreements.” That electronic signatures speed up contracting is obvious, that legal benefits flow from it was subtle.

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According to the American Intellectual Property Law Association’s Rep. of the Ec. Survey 2005, at 17, corporate IP department attorneys (not including heads of departments) spent one-third of their time on IP prosecution work directly (See my post of Sept. 28, 2010: new-age patent lawyers should move beyond prosecution work.). They spent about one-fifth of their time on “opinions, counseling on inter partes conflicts or prospective conflicts prior to litigation or formal ADR.”

What particularly pleased me, a numbers guy, is the finding that “On average, the number of new US and PCT Patent applications prepared and filed by corporate IP department attorneys in 2004 was 22.9.” Now there is a benchmark for prosecution productivity!

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In-house staff like to put off undesirable tasks. Everyone does. So a simple technique described in Law Practice, Sept./Oct. 2010 at 12, appeals to me, Set a wind-up egg timer to ring at 25 minutes: a chunk of time called a pomodoro.” While it ticks away work on one and only one task. When saved by the bell, reward yourself with a three-minute break, then start another pomodoro push. The article emphasizes that you “Don’t interrupt a pomodoro unless the building’s on fire.” The psychology of finite chunks of concentrated attention followed by a respite makes huge sense. Aside from this handy technique, the article says to understand why you put off work, develop routines, and eliminate distractions.

By nature not a procrastinator, I immediately looked to see what wisdom lurks in the stream of previous blog posts (See my post of June 21, 20016: five life-hacking ideas to get the boulder moving; Nov. 6, 2006: skiving at work; Feb. 25, 2008: attorneys and wasted time; 60-90 minutes a day; Aug. 21, 2008: main leisure time-wasters for workers; Nov. 17, 2008: procrastination and its adverse effects; Nov. 2, 2009: goofing off at work; and Feb. 15, 2010: commitment contracts to combat delay.).

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An article in Law Practice, Sept./Oct. 2010 at 12, recommends that law firms develop “quick-reference guides for how the various jobs in the firm are done, and by whom.” Let’s transplant the constructive suggestion to our domain.

“Start by having all current employees outline the major tasks they perform regularly, including the percentage of time each task occupies on a weekly or monthly basis.” The author recommends that someone else who is not familiar with the task review the description, edit it for clarity, and return it to the employee to fill in missing details “including the location of any materials, passwords or other information” and useful tricks of the trade.

Some legal departments prepare process maps, but a down-to-earth explanation by the person who handles subpoenas, opens matters on the system, codes invoices, sets up conference rooms, arranges for temps, deals with offsite archives, distributes faxes, maintains training logs, and so forth in a long list of processes, would be much more practical. It is low-level knowledge management with considerable benefits to process improvement, self-learning, and backup capabilities. Assuming the material is collected on the department’s intranet, it supplements job descriptions and gives particularity to performance evaluations.

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Kevin Potts, VP of Product Management and Marketing at Emptoris, a leading provider of contract management software, left a hefty comment on one of my recent posts. His lessons learned deserve wider play and I couldn’t resist some editorial remarks. Note also that Kevin hosts a blog.

“Not being a lawyer, I have struggled to find the right words to describe how automation plays a role in contract management best practices. Here is what I have learned:

  1. Don’t emphasize live negotiation management – no lawyer sees herself negotiating online with a customer on a sales agreement inside some software application. [That would be as off-putting as online auctions based on an RFP.]

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It would be an easy matter, technically, to log all calls made by a lawyer to a client within the company and all intra-company calls from clients to the lawyer. This recording would disregard all content, storing and aggregating only the people at either end and the duration of the calls. Since many lawyers spend much of their day on the phone, this unobtrusive tracking mechanism could substitute for some of the information laboriously (and often erroneously) secured from recording time (See my post of July 12, 2010: sloppiness in time tracking by outside counsel.).

I have already written about construction of a client-contact network (See my post of May 11, 2010: network metapost). If, then, in addition to modest tracking of phone traffic, client meetings were the subject of time recording, I believe there would be a quite full picture – and an accurate contemporaneous picture at that – of what an in-house lawyer does. Stated differently, three different techniques should substitute quite well for the onerous task of retroactive remembering.

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The General Counsel of LG Electronics spoke at the InsideCounsel Super Conference on May 25 th. The subsidiary he serves racks up $6 billion in sales yet has only five lawyers. He said there was no headquarters legal group so they are actually stand alone. It was his outline of how they handle an enormous volume of contracts that motivated me to write.

His group turned out about 1,200 contracts in the past year and he commented on how they did that. One, they make sure all contracts are signed. Two, they have the legal department review all contracts signed by the company. Three, they’ve created standard terms and conditions for the purchase orders used by the company. Four, they have clearly defined the boundary of what transactions require a contract and what may be done by purchase order. The law department decides whether to deal requires a contract or purchase order. Five, the legal department keeps a database of signed contracts and tracks their status. They also use this database to report on workflow that they’ve accomplished. Six, they store and retrieve both physically and electronically all contracts.

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“Organizational routines can be defined as repetitive, recognizable patterns of interdependent actions, carried out by multiple actors.” This definition, from Admin. Sci. Q., March 2003 at 95, seems very close to the ones I have fashioned for the term “processes” (See my post of April 27, 2006: “A process is a series of related activities repeated to achieve an understood goal”; May 1, 2006: “a series of related actions that have been done before to achieve a similar end”; and April 25, 2009: no operational distinction between policies, procedures, processes, and practices – “step-by-step repeated activities; some of them spelled out in a procedure, but most un-memorialized”.). The authors note that organizational routines may be documented with a set of formal procedures or rules, but that is not an essential part of the core definition.

What stands out in the academic’s definition, admittedly of organizational routines, which many not be the same thing as organizational processes, is interdependency and multiple actors. I am not sure either of those components necessarily limit how we should conceptualize processes in legal departments.