Articles Posted in Productivity

The appreciation executive managers have that patents can generate business-enhancing value was brought home in a presentation at Consero’s conference last month. Keith Chanroo, Chief IP Counsel at TSMC, spoke about what he calls the new paradigm for intellectual property. One of his slides offers this provocative projection: “Commercialization (monetization) of IP assets can enhance revenues and profitability (estimated @ minimum of 2-4% revenue/2-5% profitability per annum).”

Increasingly, the potential gusher of value like that will bring more responsibility on the law department and its patent lawyers, staff, and service providers. It summons up images of law departments as cash registers.

The General Counsel of Polycom, Sayed Darwish, spoke at Consero’s conference last month. One of his charts gave the number of pages in various historic statutes regarding financial services. The Federal Reserve Act of 1913 took a mere 31 pages; Glass-Steagall of 1933 had 37 pages; the Interstate Banking Efficiency Act of 1994 weighed in at 61 pages while Sarbanes-Oxley was only slightly longer at 66; Gramm-Leach-Bliley in 1995 doubled to 145 pages. But then came the table-crusher, the blue whale of financial legislation: Dodd-Frank dropped on lawyers last year a Leviathan of 2,319 pages.

One statute, seven times as long as the total of the preceding five historic statutes. And wait ‘til you see the school of regulations that will swim along behind! Legal department attorneys throughout the land groan as they labor to make sense out of the massive legislation. What strategic plan of a law department could have allowed for that?

If your company operates in a regulated industry and also has unregulated businesses, you may need to track your time so that the allocation of your lawyer’s time is fair to the public. When rate applications go to the regulatory agency, costs of providing the utilities service, for example, are supposed to fairly represent what they are. If lawyers work for unregulated activities but bill that time to the regulated side, that is a problem.

There may be other situations I am not aware of where regulatory requirements dictate some form of time tracking by internal lawyers (See my post of Nov. 22, 2008: internal time tracking with 16 references; and Jan. 5, 2011: internal time tracking with 9 references).

Speaking at the InsideCounsel SuperConference, a lawyer from Aerojet described his “Buyer’s Handbook.” It weighs in at 150 pages. The left-hand page shows a particular clause in Aerojet’s procurement contracts and the right-hand page provides both commentary on that clause and alternative language that its buyers might resort to. For example, Aerojet wants the jurisdiction for disputes to be California, but it is sometimes acceptable to accept a contract where Aerojet agrees to bring any action against the seller in the seller’s chosen state.

The speaker said that this hefty guideline for contracting helps keep positions consistent, helps to train buyers not only in what to seek during negotiations but also why, and also makes his job much easier since he has assembled in one document – which is easily and constantly updated – much of his experience and counsel (See my post of Nov. 8, 2010: templates for common contracts with 11 references.).

Our word ostracize comes from votes in Athens written on broken pieces of pottery called ostrakon. The politician named most often on the pottery pieces was barred from the city for ten years — ostracized. This shard of history and etymology comes from Len Fisher, The Perfect Swarm: The science of complexity in everyday life (Basic Books 2009) at 89.

What if a law department collected a number of its processes – steps that had to be taken for something to be done – and let members of the department vote on the least useful. Whether they vote with pottery pieces or anonymous submissions, that might be a way to prune accumulated encrustations of low value requirements. Banished be from fair Verona the process that has Romeo’d too far.

A number of law department initiatives stumble because the lawyers don’t do their part. Whether the initiative be to contribute documents to a repository, write FAQs for an intranet, run a Center of Excellence, reduce outside counsel fees, take advantage of software, hire diverse candidates, or put evaluations into a database, the underlying cause of reluctance is a calculation. They figure that the individual benefit to them does not outweigh the potential cost of action. By “cost of action” I mean their personal contribution to the effort is the action and the downside risk if something goes wrong is the cost.

Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford 2006) at 69, refers to this as a standard “collective action problem.” If an in-house attorney knows something about a problem, to share that knowledge gains only a bit for her, although possibly a whole lot for the department and its client. If knowledge she shares boomerangs, however, she suffers disproportionately. Thus, “each person, following his or her rational self-interest, will tell the group less than it needs to know.” Or will contribute less than the group would expect and like to have (See my post of March 5, 2005: altruism does not overcome reluctance to contribute to knowledge management efforts; Dec. 21, 2005: disappointing levels of contributions to intranets; April 14, 2005: erratic evaluations of outside counsel; June 15, 2006: collective good not sufficient to motivate action; June 21, 2006: technology languishes if it offers mostly collective gain; March 16, 2008: game theoretic view of individual self-serving; Oct. 22, 2008: self-sacrifice for the collective good with knowledge management; Aug. 10, 2009: dispersed benefits for pirates of having slaves onboard, but individualized loss; and Sept. 28, 2009: competitiveness dampens collaboration in-house.).

The upshot? Good programs wither because few people pitch in much. It’s a collective inaction problem.

To manage is to be interrupted. Too often, however, we are distracted, a minor detour such as the ping of incoming emails, or interrupted, which suggests a more important break in your attention such as someone at your door. Either way, a writer in the NY Times recently suggested keeping an interruption log. The log will tell you more about why you are behind in your work and give you clues how to diminish efficiency-sapping intrusions.

Allow me to interrupt this post to bother you with previous posts on intrusions (See my post of July 14, 2005: technology distractions; April 3, 2005: Blackberries and interruptions; Oct. 12, 2006: interruptions degrade thinking; Aug. 26, 2009: loss of 24 minutes for each e-mail interruption and IQ diminishment; June 15, 2010: apps that screen out distractions; June 16, 2010: Internet interruptions; and July 12, 2010: quiet time declared.).

Little Bets: How breakthrough ideas emerge from small discoveries, by Peter Sims (Free Press 2011), has much to stimulate entrepreneurs and business people. Its theme also pertain to general counsel.

Sims creates a compelling argument for “little bets,” which are “concrete actions taken to discover, test, and develop ideas that are achievable and affordable” (at 8). General counsel can place little bets and thereby more confidently, securely and rapidly improve how their departments operate. Fundamental to little bets are experimentation, improvisation, immersion in the real world, problem definition (especially with design thinking), flexibility in direction, and constant repetition of these cycles (at 13-14).

Examples of little bets for general counsel could include an LPO pilot of limited range, agreement to telecommuting for two paralegals, document assembly software for one type of agreement, a fixed fee deal with a small firm – little bets can be taken everywhere you look.

An equation known as a progress curve “describes how productivity improves in a range of human activities from manufacturing to cancer surgery.” Having read that brief enticement in the Economist, April 2, 2011 at 76, I tried, probably unsuccessfully, to apply the equation to law departments.

The formidable equation Tn =T1n-b quantifies a learning curve. Tn is the number of days between the nth event and the next event. Try this to wrap your mind around the formula. Think of the number of days between the fifth bankruptcy proof of claim a paralegal completes and the 30th one. How much has the paralegal improved during that period?

The power b is calculated from the relationship between the logarithms of the event number, n, and the period of elapsed time. Perhaps the 30th proof of claim came on the 400th day after the fifth one. The logarithms of the 30th event (1.47) and 400 days (2.6) are used to compute the superscript power, which when divided by log2 gives the negative number (See my post of March 11, 2009: learning curve with 9 references.).