Articles Posted in Productivity

It will not do to try to make cookie cutters out of inside-house counsel work (See my post of Jan. 25, 2007 on “commodity legal work.”). Legal tasks and problems do not fall into such neat and repetitious patterns and lawyers rebel.

Rather, instead of trying to force commonly-done work into the same steps and structure – standardization, law departments fare better if they (1) provide their lawyers and paralegals with better tools (See my post of April 17, 2007 regarding “tools” in law departments); (2) train their staff better (See my post of April 13, 2006 regarding internal substantive training.); (3) share knowledge between the members of the department (See my post of May 1, 2005 regarding sharing knowledge within the department.); (4) export appropriate work to clients or refuse to do it (See my posts of Sept. 14, 2005 and May 14, 2006 regarding a client-self service model); (5) train clients (See my posts of Dec. 19, 2005 and July 14, 2005.); and (6) delegate work to the right level (See my post of Aug. 31, 2005 regarding delegation of contracts.).

Productivity follows from these six steps far more than from the imposition of illusory standardized processes and documents.

Over a decade ago I worked for Merck’s law department as an employee and I took full advantage of the headquarters’ wonderful health center. Since then, other law departments I have consulted to have had available for their attorneys workout centers onsite. So, when I read about the law department of Dreyer’s Grand Ice Cream in the Recorder, March 30, 2007, I noted approvingly a comment by its general counsel, Mark LeHocky: “I tried, and am moderately successful, in getting out to exercise most days, which is good for mental as well as physical health.”

He does not say that he uses a facility run by Dreyer’s but he certainly advocates mens sana in corpora sano. So should all general counsel. No data has come to my attention about how many corporate gyms are available to lawyers, but the benefits of them for law departments are manifest.

According to Tim Allen, the CEO of Business Integrity, several law firms have used that company’s software, DealBuilder, to create applications for law departments.

Clifford Chance was engaged by Cisco to work on the automation of Cisco’s global sales contracts, by UBS to work on the automation of its banking agreements, and by PWCL in Kuwait to automate its supply chain contracts.

Eversheds was engaged by Microsoft to support automation of its End-user License Agreements and by Amazon in Europe to automate its European HR agreements.

In early 1999 a report went to the Board of County Commissioners for Hernando County, Florida. The 20-page study followed up on an audit of the County’s Legal Services Department. Along with a recommendation for Legal Request Forms (See my post of March 26, 2007.), another recommendation urged the small Department to hire an additional lawyer.

The audit report announced the productivity gains from the additional lawyer’s the first seven months. “”There was a material increase (44%) in the average number of Legal Requests completed each month …. There was a 50% decrease in the average lead time (days to complete) per Request during the … period. Additionally, … the average number of requests that had lead times over the standard 14 day period decreased by 21% during the … period.”

It’s all so neatly tied together, the additional lawyer leading to much work done, done more quickly and within the turnaround time promised. The return on investment from additional productivity can hardly be demonstrated more clearly.

InsideCounsel, March 2007 at 58, reports that “almost 40 percent of law departments added attorneys in 2006.” The quote presumably refers to net additions, not replacements. The data comes from 614 in-house respondents. Roughly speaking, large US companies have about five lawyers for every billion dollars of revenue. Stated differently, for every $200 million in additional revenue, a typical company adds the equivalent of a full-time lawyer.

The median number of lawyers in the law departments of the group is eight. Hence, the median respondent was at a company with revenue of one-to-two billion dollars. If the median company enjoys revenue growth of 10 percent it grows by $100-200 million, which according to the benchmark justifies adding another lawyer.

On this reasoning, it is surprising that less than 40 percent of these law departments added a lawyer, because increased revenue alone would likely account for an additional hire. Indeed, the reason given for adding attorneys was principally “business expansion,” which 46 percent of the departments that hired another lawyer gave as the explanation for the headcount increase, and gave three times more commonly than the next most selected reason, “bringing more work in house” (15%).

A letter to the editor in Business Law Today, Vol. 16, March/April 2007 at 9, went further into paralegal certification than this blog has previously (See my post of March 23, 2006 for the National Association of Legal Assistants’ program that leads to becoming a Certified Legal Assistant.). The letter writer, Tina Boone, noted the Professional Paralegal (PP) certification offered by NALS www.nals.org. Boone herself has obtained an “advanced certification for legal professionals (PLS) and she mentions the status of “Registered Paralegal.”

Her primary point is that lawyers, including in-house counsel, should push their legal assistants and paralegals to obtain training and certification, and follow it up with continuing training and education (See my posts of March 18, 2005 and its question of whether there are limits on what good paralegals can do; and March 17, 2005 on compensation levels and classification for paralegals.).

In the minority of law departments, lawyers track their time and charge it back to clients. A controversial practice it surely is, so let’s look at why you might and why you might not (See my post of Jan. 13, 2006 for a first cut at pros and cons, including that time tracking allows a law department to negotiate levels of service and it gives punch to a plea to hire more lawyers.).

Since opponents of time recording and charging have largely prevailed, let’s start with the disadvantages. Lawyers despise recording their time, so it chips away at morale. Time tracking and billing requires administrative time, which may be considered low value as it is simply shuffling costs between internal units. Recording time inevitably creates competitiveness among lawyers, especially to the degree they think that their billable hours are a component of their evaluation and bonus. Time tracking emphasizes the passage of the hours rather than the results obtained. If law departments dislike hourly billing by law firms, why would they want to subject themselves to the same dysfunction? But the most common objection is that some niggardly clients may avoid lawyers because of being charged for their time, when the clients indeed need legal advice.

Those general counsel who spur time tracking ride a good management steed — measure what you want to manage. Clients are less likely to abuse the law department with trivial requests for services if there is some market discipline in the form of a bill. Hours spent on various kinds of matters help provide key metrics and convey the amount of effort to clients on their behalf. Time tracking also lets a law department compare its internal investments with the efforts and hours of outside counsel. No matter what, a department can choose to track its time in grosser units than a law firm does and develop a picture of where its efforts go.

Timothy Mahoney, executive director of Esquire Group, has a strong interest in deflating the Indian outsourcing bubble because his firm – part of Special Counsel – provides temporary litigation support staff from domestic US locations. Nonetheless, his article in Met. Corp. Counsel, March 2007 at 62, presents nine arguments contrary to the bandwagon.

Mahoney points out that “Indian lawyers do not undergo the same training as U.S. lawyers.” Further, “there is no nationally recognized law examination required to practice law in India.” Then too “Indian lawyers are unfamiliar with U.S. legal procedures and discovery mechanisms.” Three other challenges are specific to litigation support. In India, communications between clients and in-house counsel are not protected by privilege, “Indian lawyers are not accustomed to reviewing documents for privilege” and “Indian lawyers are not familiar with large-scale electronic discovery.” He also asserts that there may be higher ethical obligations regarding supervision of off-shore attorneys.

A couple of other points I have omitted, but in total these arguments should be considered in any decision to use offshore legal staff (See my post of Nov. 14, 2005 on offshoring and references cited.).

Let’s apply in more detail a concept that has been touched on (See my post of Dec. 17, 2006 on false positives.). A false positive happens when a client comes to a lawyer when in fact there is not a material legal issue; or one occurs when a lawyer identifies a legal problem that actually turns out not to be present. A false negative, conversely, happens when a client fails to come to the law department where there is an actual legal problem (See my post of March 18, 2007 on pockets of resistance to the use of the law department.); likewise, it happens when a lawyer fails to spot a legal issue of some consequence in a transaction.

It would be proper, although abstract, to say that law departments should put their heart and soul into minimizing the number of any of these false positives and negatives (See my post of Aug. 22, 2006 on difficulties with errors.).

Every in-house lawyer faces a column of legal work. At the lowest layer is the hum-drum incessant flow of ordinary legal services and advice (See my post of March 18, 2007 on commodity legal work being crucial to the business.). Commodity legal work is the stuff of process (See my posts of Feb. 6, 2007 with references cited.). It must be done, competently and diligently, but it hardly sets the heart to racing.

Above that tranche comes the Goldilocks legal work: not too hard, not too easy, but just right and fun and professionally satisfying. Lawyers enjoy this broad layer of work and feel confident that they can do well and guide their clients successfully. This work is solid, satisfying and stimulating. One’s heartbeat picks up.

A the top, outside the comfort zone of professional growth and competency in the middle, are the occasional legal heart attacks. The project is high-profile, risky, full of law not well known (See my post of Oct. 18, 2005 about the silliness of lawyers wanting to tackle rocket science all the time.). Outside counsel are on the scene, and in the conference rooms or late at night the heart races.