Articles Posted in Productivity

Let’s apply activity based costing (ABC) to an innocent little e-mail that squirts out to all the lawyers in a 50-lawyer department. The secretary who sent it – a short note about the upcoming departure party for someone – spent all of five minutes dashing it off, but 50 lawyers, who each cost the company about $180 an hour, spent 30 seconds per person reading or deleting it. That e-mail, which racked up $75 in lawyer reader time (ignoring the interruption loss) also sets in train extra costs of storage, bandwidth, and filtering. Worse, what if one or two recipients inadvertently “reply all,” and thereby ring up another multiple of $75? Now, extrapolate economics such as these to all the messages sent in a law department by e-mail.

As noted in the NY Times, June 4, 2006 at BU9, with perhaps some exaggeration, “people who are not authorized to spend $100 on their own are authorized to send e-mails to people and waste hundreds of thousands of dollars’ worth of company time.”

Almost three years ago, the law department of Cargill announced that it had deployed a “fingerprint authentication solution.” According to the release by DigitalPersona, dated July 22, 2003, the “biometric recognition system creates a fully secure, end-to-end authentication system that offers secure and convenient network user authentication while eliminating the costs of password administration.”

This announcement gives new meaning to both “digital” and “finger-printing.”

At Honeywell, a $27.7 billion conglomerate, the law department once had 140 lawyers, but half the revenue of today. Now it has doubled in revenue but riffed 30 percent of its lawyers!

The article in GC Mid-Atlantic, May 2006 at 26 that offers this data mentions several contributors to the company’s astonishing reduction in lawyers per billion dollars of revenue – from around 10 per billion to 3.6 per billion. The general counsel has hired extremely competent lawyers; the department has created an internal website (an intranet site) dedicated to Honeywell’s legal matters — which helps clients engage in self-help, and it oversees, but does not handle, litigation.

A survey of 1,501 Canadian employees found that “twenty-one percent of workers experienced physical health problems because of stress or depression in the past year that were bad enough to make them want to call in sick,” according to the Globe and Mail, June 2, 2006 at C2. The health problems include fatigue (20% cited it), headaches (16%), neck or back pains (13%), and joint or muscle pains (10%).

Of particular interest to law departments are what the survey identified as the prime causes of work-place stress. “Conflicts with employees or supervisors” were the prime cause of stress or anxiety (22% cited it) followed by “pressure to complete work” (21%). The remaining causes included “dealing with the public or customers (14%), “the fast pace of work” (13%), “rising volumes of work” (13%), “long hours” (8%), and “lack of support from co-workers.” In short, three stressors result from dysfunctional relations with people (reports or bosses, clients, or co-workers) and three result from workload (pace, amount, or duration) (See my post of June 12, 2005 about stress and in-house counsel.).

By the way, beware Blackberry use and work from home: “20 per cent of those who use wireless communications or laptops to work outside the office found it has raised their stress level in the past year” (See my posts of April 3, 2005 on productivity increases from PDAs, but also July 14, 2005 on diminished productivity.).

Working from home has much appeal in the war for talent, and law departments succumb at times (See my posts of Oct. 19, 2005 on obstacles to telecommuting; Sept. 25, 2005 and Oct. 18, 2005 on survey data; Dec. 4, 2005 on ways to bend the work rules; and Dec. 10, 2005 on cost and productivity savings.). Law departments would come up short, and general counsel would ban work from home if this quote, from the NY Times, May 27, 2006, at C5, came to their attention (and were true): “When office employees say they are working at home for a day, 25 percent actually work less than one hour.”

The Times drew this quote from Health magazine and called it “troubling.” Drolly, the Times added a second thought: the other magazine “did not ask how long those people actually worked when they went to the office.”

What do you think of the opening proclamation of Bob Kirtley, a technology consultant to law departments, in a profile by the Met. Corp. Counsel, Vol. 14, May 2006 at 22? “Technology has dramatically improved efficiency in legal departments during the last 20 years.” He goes on to describe the “first wave” as matter management software, the “second wave” as electronic invoicing systems, and predicts that the third wave will be “legal business intelligence.” By that term he encompasses fancy capabilities such as benchmarking, real-time exception reporting, “multidimensional databases and on-line analytic process (OLAP) technology.”

I disagree that law department-specific technology has since 1985 dramatically improved in-house efficiency. Personal computers, a profusion of PC software, e-mail, voicemail and PDAs have unequivocally boosted in-house productivity, but software customized for law departments is not in their league.

An important metric for law department managers is fully-loaded cost per lawyer hour (See my post of May 14, 2006 with links.). To calculate that number, a general counsel needs to know the average number of hours that the lawyers in the department charge (or might charge if they tracked time) their clients in a year (See my post of Sept. 25, 2005 on the typical number: 1,850 hours.).

During a recent consulting project, I came up with this definition of “chargeable” (See my post of May 3, 2006 on other key definitions.). 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.

Although I criticize in-house counsel who are sucked into doing quasi-legal tasks (See my post of Feb. 23, 2006 and my article cited there.), I came across a possible exception.

In-House Corporate Counsel Barometer 2006, Canadian Corp. Counsel Assoc. at 24 reported that about one third of 780 Canadian corporate counsel ranked their “management role” as the most important one fulfilled by them in their organization. Deeper, of three skills that are most important for corporate attorneys to define their management role, more than half (57%) chose “manage or champion projects and initiatives that have legal components or ramifications.”

You can call this quasi-legal work, to run a project, but if it leads to better legal protection for the company or alters the flow of work that comes to the law department, I can make an exception to the quasi-legal interdiction.

All law departments extol collaboration. Equally commonly, they bemoan the inadequacies of their internal communication. Are collaboration and communication not the same?

Emphatically not. Communication can be a one-way transmission of information; collaboration could theoretically be completely silent while two or more people work together toward a common end. Communication is a flow of information; collaboration is joint activity with sharing of resources.

In a law department, communication can be a post on the department’s intranet, an e-mail from the general counsel after the Executive Committee meeting, a report on the results of the employee-morale survey, a drive-by office chat. Collaboration could be project teams (See my post of Jan. 4, 2006 about Halliburton’s approach.), practice groups (See my post of Sept. 10, 2005 on communities of interest.), a working group to plan an offsite, or a document discovery planning unit.

As reported in In-House Corporate Counsel Barometer 2006, Canadian Corp. Counsel Assoc. at 12, these are the results from 780 Canadian corporate counsel who ranked 11 attributes as 1 (most important), 2 or 3. The percentage of the respondents who gave the attribute one of the three top ranks follows in that order in the parenthesis.

“Ability to see the big picture” (35% 1-68% 1, 2, or 3)

“Ability to multi-task” (22-53)