Articles Posted in Productivity

Queuing theory is a mathematical approach to the analysis of waiting times, particularly where requests for service arrive randomly. The terms and techniques of this discipline could help general counsel.

This post draws on William J. Stevenson, Operations Management (McGraw-Hill, 2005, 8th Ed.) at 779. For a legal department, clients request assistance as issues arise: they queue. They dislike waiting for assistance. One way to reduce waiting time and the associated loss of goodwill is to schedule arrival times and maintain constant service times, such as where reservations are made in advance. Managers of in-house lawyers wish they could!

“The goal of queuing analysis is to balance the cost of providing a level of service capacity with the cost of customers waiting for service.” The “service capacity” of a law department is the number of its lawyers and paralegals, taking into account skill levels and tools available, while the “cost of customers waiting” includes not only the dissatisfaction of clients impatiently expecting answers or documents but more importantly the business opportunities of the company at risk from legal delays.

Large size limits team effectiveness. An article previously discussed (See my post of May 29, 2009: do general counsel matter.) cites research that “performance problems increase exponentially as team size increases.” The ideal team consists of approximately six people.

Coordination and motivation drags down team effectiveness. The Harv. Bus. Rev., Vol. 86, May 2009 at 100, takes another swing at teams: “Research consistently shows that teams underperform, despite all the extra resources they have. That’s because problems with coordination and motivation typically chip away at the benefits of collaboration.” The pros and cons of teams are complex (See my post of April 5, 2009: teamwork and collaboration internally with 16 references.).

Insufficient familiarity blocks teams. The article observes that it is a myth that teams whose members grow comfortable with each other suffer performance fall off. “The problem almost always is not that a team gets stale but, rather, that it doesn’t have the chance to settle in.” General counsel may fall into this trap if they don’t allow enough time for a team to gel.

The blog Legal Project Management, by the Managing Director (Asia) at Global Colleague, cites an article by Sanjay Bandhari, head of e-discovery at Ernst & Young. Bandhari’s article discusses the benefits of applying project management skills to electronic discovery.

The article focuses on four project management (PM) skills, which he refers to as “overarching PM techniques.” I quote them because all projects in legal departments need to attend to these concerns. They are:

1. stakeholder management,

One of the panels at the SuperConference stressed the importance of term sheets for clients. Term sheets help clients think through what they ought to nail down regarding a transaction. Their spadework saves lawyers’ time and saves the lawyers from having to harass the clients for answers to crucial factual questions (See my post of March 11, 2007: Kraft project with term sheets; and Aug. 31, 2005: Food Lion and its use of term sheets.).

Term sheets play an important role in the whole contract process and the productivity of lawyers who nurture contracts (See my post of May 5, 2006: contracts with 15 references; and July 17, 2008: contract lawyers with 12 references.).

A common presumption is that in-house US lawyers put in an average 1,850 chargeable hours per year. These hours the corporate client would pay for if the corporate lawyer were with a law firm.

Testing this presumption, we need to start with an accepted definition of a legitimate internal “chargeable hour” (See my post of May 16, 2006: my proposed definition of “chargeable hour”; and Nov. 23, 2008: how hard it is to prove how hard internal lawyers are working.).

Next, to confirm or alter the 1,850 hour figure, we need data on how many total hours in-house lawyers typically log. Surveys give some ballpark numbers (See my post of Sept. 25, 2005:1,850 as a normal assumption for in-house chargeable hours; and Jan. 3, 2008: 1,850 calculates costs for senior lawyers.). Other surveys give total hours worked (See my post of May 24, 2007: average 50 hours a week among Canadian corporate counsel; Sept. 25, 2005: “generally 45-50 hours” worked per week; and April 13, 2006: 52% on in-housers said 41-50 hours a week while 38% said 51-60 hours.). These self-provided figures raise doubts, since lawyers may exaggerate their hours worked (See my post of Nov. 20, 2006: Aviva’s law department reports an ideal of 1,320 chargeable hours a year.). One of the difficulties in this area is the scarcity of data about time tracked internally, and, indeed the accuracy of that data.

If the lawyers of a law department track their time, what constitutes “chargeable time” has some degree of subjectivity (See my post of May 16, 2006: “Count time as ‘chargeable’ when you are working on any project for or requested by your client, but not if you are doing something that members of the law department do to maintain its operations, such as evaluations of law firms or members, software selection, CLE, professional development, staff meetings, retreats, budgeting and other administrative or organizational activities.”). Even if in-house lawyers do not track their time, some of their hours are not devoted to practicing law.

A missing metric in our field is time spent by lawyers to maintain the operations of the department. Partly that is because some tasks might be deemed internal to the legal department and not chargeable, such as status reports sent up the line or evaluations of law firms that work only for a particular client or budget reports prepared for a client; alternatively, they might be deemed chargeable if specifically incurred for a particular client.

In any event, it seems plausible that at least two hours a week for a typical in-house lawyer goes to activities that neither law firm nor an in-house attorney would (should) charge for. Five percent of overhead time should not shock anyone for non-billable time, and may well be too low, especially for senior lawyers in law departments who bear management responsibilities.

What this blog defines as “descriptive metrics” are numbers that describe some aspect of the quality and quantity of work handled by a law department (See my post of Feb. 19, 2009: supervisory responsibility; Feb. 26, 2009: start of a series on such metrics; March 8, 2009: in-house lawyers; March 9, 2009: fee concentration with firm size and effective rate; March 11, 2009: management initiatives; March 26, 2009: degree of client reliance on the legal department.). Descriptive metrics are benchmarkable – you can compare your metrics to your peers’ – or they can create a profile of the department. My long-term goal is to develop a “fingerprint” of a law department through a set of descriptive metrics.

Specifying how hard in-house counsel and staff work ought to be fairly easy, but isn’t (See my post of Nov. 23, 2008: how hard it is to prove how hard internal lawyers are working.). The raw material may be available – matters and hours – but the proof remains difficult. Partly this is because administrative tasks detract from productive time (See my post of Oct. 30, 2005: admin time squeezing out other time.).

Descriptions of workloads start with matters (See my post of March 26, 2008: matters with 14 references.). With matters counted in a consistent way, you can depict legal departments in terms of matters per lawyer, types of matters, matters per practice group and other variations. Obviously complexity of matters deeply influences workload (See my post of Dec. 27, 2008: complexity of legal practice with 20 references.). I know of no unarguable way to quantify complexity.

Beyond the single instance noted so far here about the economist’s darling, diminishing returns (See my post of Dec. 21, 2005: additional patents obtained by a company.), many other circumstances in law departments evidence this central concept of economics (See my post of March 3, 2006: economics with 16 references; and April 27, 2006: five more references.).

Detailed bill review (See my post of Sept. 14, 2005: invoice review time; and May 1, 2006: time spent on invoice review.).

Preparing for a presentation (See my post of Oct. 24, 2005: presentation to clients on costs.).

If you are a general counsel and want your lawyers to change some accustomed practice, such as the engrained choice of hourly billing or the disinclination to use a matter management system, what techniques serve you best? From the McKinsey Quarterly, No. 2, 2009 at 101, holistic and psychological research suggests you must have four conditions to succeed:

a) a compelling story, because your lawyers “must see the point of the change and agree with it” (See my post of Dec. 12, 2006: stories influence people more than statistics; April 27, 2005: storytelling as part of knowledge management; May 14, 2005: proof by story may be dramatic, but not determinative; Jan. 17, 2006: strategic narratives influence people more than strategic plans; April 1, 2007: stories as scenarios for strategic planning; and Sept. 22, 2008: post-modernism and its privileging of narratives.);

b) role modeling, because the legal staff react better and change more readily when they see the general counsel behave in the new way, i.e., walk the talk;

Look, give me a break! I am trying hard to be topical.

A survey conducted by OfficeTeam asked 522 office workers how frequently they go into work when they are feeling sick. “Very frequently” was the response of 45 percent of those surveyed and “Somewhat frequently” by 30 percent.

Hold on. 150 managers, asked how often they think employees come to work when they feel sick said “Very frequently” only 17 percent of the time; “Somewhat frequently” 57 percent.