Articles Posted in Productivity

Law department benchmark metrics show that law departments face at the median, say, 20-40 lawsuits per lawyer. Metrics disclose cycle time for lawsuits, whether they are as plaintiff or defendant, cases per outside counsel, and what the department spends on them.

No metrics capture complexity of cases (although spending per unit of time is a crude proxy for complexity). Since reports of court filings show that the absolute number of lawsuits filed has been increasing roughly with the growth in population (1-2% a year) – aside from bulges in certain products liability categories such as asbestos – we are left with a question: are lawsuits of law departments becoming more complex? If so, how might we quantify the change in complexity?

Perhaps we could add the number of counts in complaints; we could argue that more tens of thousands of pages of documents turned over in discovery evidences complexity; perhaps depositions per case point in that direction, or the incidence of substantive pleadings. None of these metrics are available to the public, so we can neither prove nor disprove the subjective sense that litigation is growing in sophistication.

“The State of Canadian Judicial Statistics: Trends in Canadian Civil Justice,” by The Fraser Institute [info@fraserinstitute.ca] presents results of a 1995 survey from about 50 members of the Canadian Corporate Counsel Association.

The respondents handled an average of 58 lawsuits each year during the previous five years. “Most (38) of these cases were about contract law, while 14 percent involved labour or employment issues. Personal injury, product law, and tax matters were the subject of, respectively, 11, 8, and 5 percent of reported cases. Parties to the case were other companies in 46 percent of all cases…”

The survey found that “final disposition took 39 months on average although, if the case went to trial [15% did] it took 47 months.”

The Office of the General Counsel for the National Labor Relations Board spends much of its time investigating and making preliminary determinations on charges of unfair labor practices (ULPs). In 1995, the Office studied how it handled the 3,000 charges it received each month. [www.lawmemo.com/nlrb/gchighlights.htm] Moving from a first-in, first-out model, the NLRB shifted to a segmented model where lawyers assigned ULP charges to Category III (highest impact to unions and the public), Category II, or Category I (lowest impact).

For each of the three tiers, the Office set different time targets for issuing a complaint or dismissing the charge: 7, 11, and 15 weeks, respectively. The study also varied the fact-finding methods according to the Category. Finally, the Office started tracking data about its Categories, resolution times, and staffing.

Law departments that face a continuing flow of substantially-similar matters can adapt the NLRB’s practices to their own triage system.

How much legal work for in-house IP lawyers does SOX mandate? I have paraphrased from a recent Metropolitan Corp. Counsel article by Marc Friedman, a partner at Sills Cummis Epstein & Gross:

All publicly held companies must conduct regular audits – at least annually – of their IP assets, and report material changes. They must determine what intellectual property exists, what its strengths and weaknesses are, and what changes have transpired since the last reporting period. IP assets include not only granted patents, trademarks, URLs, and copyrights, but also trade secrets and, arguably, IP or know-how not yet subject to governmental certification.

I am reminded of the SEC’s requirement that oil companies recalculate the viability of their reserves each year. Likewise, monitoring the IP inventory and all its difficult estimations of change in value portends burdensome work for in-house IP lawyers and higher fees to IP external counsel. [See my post on March 11, 2005 about SOX and law department structure.]

Departments with lawyers spread around the globe confront obvious problems with time zones; someone has to be on the call at midnight while others are munching bagels.  Offices of global law departments face language barriers, diverse legal systems, and different ways of actually getting things done.  Managers who try to reach the summit of an effectively integrated global law department must climb over each of these.

The steepest slope, however, could be surmounting differences in culture – the divergent roles of lawyers, expectations of clients, training and work style backgrounds, managerial assumptions and all the peaks and valleys of culture.  Clocks, accents, and the law find solutions much more easily than the tough climb of culture.

To be a corporate lawyer is to belong to teams – product development, lobbying, large-scale litigation, acquisitions, strategic planning, IP review, and many others. 

What commonly trips up teams?  Here are seven ways teams stumble, according to Interaction Associates:

1. Not knowing what the team is supposed to accomplish

“The Law Department must review and initial all contracts!”  More likely, the bureaucrat announcing this retrograde edict would lurk behind the passive: “All contracts shall be reviewed and initialed by the Law Department!”

Regardless of writing style, the mandate perverts the role of the in-house lawyers.  It casts them as final judges on business terms, instead of legal representations and risks, which propels integration of lawyers into the business too far.  It forces lawyers into the role of police, holding up their hand and saying to executives: “Stop!”  It floods the department with stultifying make-work when the vending machine rental agreement has to have a lawyer’s X.  It inevitably spawns criticism of delay, that “legal is a black hole where the contract goes in and nothing comes out.”  It leads law departments to invest in databases for tracking and controlling contracts.  And mandatory contract approval hobbles other counseling that adds more value – the urgent drives out the important.

Better to set guidelines for law departments to review contracts selectively, such as by type, by vendor, by dollar amount committed, by level of approving business executive, or some combination of these risk factors.  A company should apply its legal resources, inside and outside, to the activities that bring the most return, not rigidly decree an across-the-board standard that perverts the attorney-client relationship. [See also my post of March 18, 2005 on whether the law department should manage contracts.]

I am a sucker for metrics, but hopefully not a sucker.  When I read in Law Practice (April/May 2005 at pg. 5) that “[b]ehavioral experts say that your chances of accomplishing something increase by 70 percent if you write it down,” my “magic metrics” meter jumped into the red.

So I will write.  If a busy in-house lawyer jots down what needs to be done, I suspect the lawyer will more likely remember the tasks and finish them off.  If writing a note implies thinking about the topic for at least a bit, I suspect thoughtfulness alone raises the odds of achieving a goal.  If others see a commitment in writing, or see their own obligation set out clearly, success is more likely.  The inner voice of memory fades; post-it notes harangue you forever.

Having accepted the point of writing, whence the 70 percent?  Probably a sociologist tested 45 undergraduates and created the number, which has since been worn smooth as a pebble in a stream by efficiency epigones.  Forget the urban legend, the faux figure, and the magical metric: write clearly what you and others ought to do and your performance will improve.

Several conference rooms that I have sat in include a placard with rules.  The rules, which are guidelines and suggestions really, help those who use the conference rooms make their time more effective and preserve the room for others’ use.  Those departments that use cubicles (see my earlier post on cubicles) have especial needs for these operating principles.

Many of the rules are common sense and similar:  Always reserve the conference room; start on time; clean up the room when you are done; start on time and have an agenda; have someone prepare a to-do list after the meeting; nvite only those who are needed. 

I have seen other variations such as “Encourage everyone to speak”; “Call the following number for IT help”; “Only use erasable markers,” and ”Respect everyone’s opinion.”

In April 2003, a consortium of six major US tech companies set up the Information Work Productivity Institute (www.iwproductivity.org).  The institute has developed a methodology for measuring the five dimensions of productivity.  These are Consistency of execution; Leverage of resources; Efficiency of operating; Alignment of capabilities and business goals; and Relevance of outcomes to goals.  All of these contribute to effectiveness.

As a fan of balanced scorecards and a proponent of benchmarking metrics, I read with interest and admiration the above summary in the Financial Times.  Law departments need to promote and measure consistency, leverage, alignment, and relevance in furtherance of efficiency.

Even more intriguing was a quote by Craig Samuel, chief knowledge officer of Hewlett-Packard Services, one of the consortium members.  “Although it is a catalyst, technology only contributes 10 of the solution [of efficiency and effectiveness].  Between 20 and 30 per cent of the solution is processes and the rest [60-70 per cent] is people, culture and behavior.”