Articles Posted in Thinking

Mark Gluck, gluck@pavlov.rutgers.edu a PhD researcher on memory, gave a fascinating lecture a few nights ago. As I am riveted by how our brains work and what enhances their operation, I will share three of the points he made about sleep, stress, and exercise.

Point one is that sleep helps us remember since during it our brain collates, organizes and imprints perceptions. While we snooze, the brain makes sense of and stores our memories. During rapid-eye-movement (REM) sleep, the brain releases acetylcholine, a neurotransmitter, which enables these processes. Cholinesterase, by the way, blocks the release of acetylcholine. Gluck said that “even a short nap can improve memory retention” (See my post of Aug. 26, 2008: concerns about sleep-deprived associates.)

Point two is that stress gums up memory. One reason is that when we experience stress, our brains release cortisol, a hormone that stops neuron growth. Over time, highly-stressed people damage their brains (See my post of June 11, 2008: stress with 18 references.)!

A knee-jerk reaction for some general counsel who face a management challenge is to set up a team to study the challenge and recommend what to do. It is engrained in all of us that a group does better than an individual. That may be an urban myth.

“Groups are important to share information, but when people need to make decisions, they’re not good.” That is the conclusion of Dan Ariely, a professor of behavioral economics at Duke University, in an interview in MIT Sloan Mgt. Rev., Vol. 50, Winter 2009 at 58. He adds later that “Groups are not helpful in getting people to make better decisions, but they’re helpful in getting people to .feel more confident about the decisions they’ve made.”

Managers of in-house counsel may find this hard to accept, but assign an individual to tackle a task, and use groups for what they do well: learn and buy in.

When people in law departments try to solve a management problem, they can succumb to the seductions of the “availability bias.” We grab first for the data that is most easily at hand.

For example, if the problem is that you think you are paying law firms too much, the easily available information is hourly rates of individual lawyers at firms. General counsel and others seize eagerly on that information in part because it is immediately found. It takes more effort to calculate effective rates for firms (See my post of Dec. 5, 2005: blended billing rates with 7 references.) and even more to weight those effective weights by the amount your department uses the firm.

Related to this bias – another form of mental laziness – is the “self-confidence bias,” which distorts decisions because it pushes us to believe prematurely that we have found a solution. “Let’s ask for discounts,” someone pipes up, and everyone gladly abandons the search for different, better solutions.

A fascinating article in MIT Sloan Mgt. Rev., Vol. 50, Winter 2009 at 38, explains network analysis as a tool to elucidate decision-making.

One case study describes a company that had abnormally high levels of collaboration on decisions. Why? “The network analysis and follow-up interviews revealed that the company’s legal department frequently participated in routine decisions. There were two reasons for this: first, the company had many new employees who were unclear about when to involve lawyers; and second, the organization was particularly cautious because it had previously been sanctioned by the Food and Drug Administration for mistakes a new product filings.” Once burned, forever shy, but the resulting legal caution gummed up the works.

After the network analysis study turned up the over-involvement of in-house lawyers, “the legal department issued new guidelines on a range of routine decisions, which soon led to a reduction in the number of routine interactions.”

Social scientists could trace a series of decisions as they work their way through a law department. They could record each decision maker’s involvement – the nature and duration of their input and the result. The resulting process map would show whether many decisions involve too many people, demand too much attention from senior lawyers, or were revisited too many times. This vision comes from a wonderful article in MIT Sloan Mgt. Rev., Vol. 50, Winter 2009 at 35, which describes how to analyze networks of information and decision-making, and what to do to improve both functions ( See my post of Nov. 6, 2006: organizational network analysis.).

Findings from such an analysis should help clarify the roles that people in the law department play in these interactions (such as “decision-maker, input provider, advice provider, someone who ‘wanted to know’ or someone who simply felt ‘a need to know’”) (See my post of Nov. 23, 2008: a RACI chart of responsibilities *5; and Dec. 1, 2006 #1: RASCI.).

Humans are subject to a raft of common irrationalities when they make decisions. This post covers two of those shortcomings. Way back in November of 2001 I published an article in Legal Times about several of these flaws in our reasoning.

Exaggerating the Influence of Available Data. If you know the billing rates of partners at a particular firm (that being the most visible and memorable fact), you accord them too much weight when someone asks you whether the firm is cost-effective. We make decisions by placing too much emphasis on data easily at hand, rather than on data that actually would help but is harder to develop.

This pitfall also means that we place more importance on what we can recall. So law firms with a name brand stand out more for us than the legions of lesser-known firms.

An article in the Harv. Bus. Rev., Vol. 85, Nov. 2008 at 121, offers a number of techniques that will improve decision-making on law department teams or committees (See my post of Jan. 4, 2009: four ways to make decisions.). The author is Bob Frisch of the Strategic Offsites Group.

Articulate clearly what outcome the team seeks. This helps bring out assumptions by lawyers and establish common terminology. Often, members have different goals in mind.

Come up with a range of options that might achieve the goal. Few choices of law departments are binary, at least when it comes to managing the law department. More nuanced choices and mixing and matching can often result in better outcomes.

Picture this. Some lawyers think visually, so software that graphically depicts ideas and their relationships to each other might be useful. I ran across an example on a blog called “Tools for Thought.”
All kinds of concepts would become clearer if they were presented as images (See my post of Nov. 28, 2005: mind-mapping software; May 7, 2006: semantic mapping in discovery; Feb. 23, 2006: argument mapping; Nov. 30, 2005: patent mapping; and Oct. 11, 2008: patent landscapes.).

In fact, the first 4,000 posts on this blog would present a wonderful opportunity to create a concept canvas. If I could figure out how to do that, law department managers could see better the relationships between posts and their ideas.

“General intelligence (the extent to which specific, measurable aspects of intelligence, such as linguistic facility, mathematical aptitude and spatial awareness are correlated in a given individual) is measured by psychologists using a value called Spearman’s g.” Moderately interesting, to some, that there is an over-arching measure of intelligence. Unfortunately, if general counsel want to chew on Spearman’s g, there is no law department data available regarding it.

Recent research has gone farther with Spearman’s g, and is reported in the Economist, Dec. 6, 2008 at 98. “An individual’s g value is correlated with many aspects of his health, up to and including his lifespan.” (Women have g also, lots of it.) Apart from that finding, a best practice for a law department is to hire high g lawyers.

“In 360-degree surveys, managers typically rate themselves higher than their colleagues do on most measures of performance.” We all flatter ourselves. More specifically, based on a survey of over 4,000 US managers reported in the Harv. Bus. Rev., Vol. 86, April 2008 at 22, the gap is widest when it comes to managers gauging their receptiveness to hearing about difficult issues.

For law departments, this finding suggests that general counsel (indeed, all lawyers with reports) often overestimate their openness to receiving difficult messages or bad news. At the same time, they are likely to underestimate the extent to which their power advantage discourages subordinates from speaking their minds (See my post of Dec. 8, 2006: a GC’s chilling effect.). They may be sending subtle signals – or blazingly obvious ones – that discourage frank input.