Articles Posted in Thinking

If a company chooses as its new general counsel a lawyer from outside, so-called first-order consequences of that management decision might include morale changes in the law department, departures of the disappointed lawyers who were passed over, and whatever changes in policies and practices the new top lawyer institutes.

Second-order consequences take more time to appear and may be quite subtle. For example, if lawyers who are considering joining the department sense that general counsel do not get promoted from within, the department may have a harder time attracting superior lawyers. If clients sense that the law department doesn’t nurture strong leaders, clients may trust it less and seek outside counsel more. If law firms come to doubt that they can rely on longevity (See my post of July 21, 2006 on cost control and changes in companies.), they may be less willing to innovate. All management decisions in law departments have first- and second-order consequences (See my post of Aug. 28, 2005 on unintended consequences and trade-offs of decisions.).

A PsyMax study of 240 presidents, CEOs and chief operating officers “found creativity to be the one trait most common to highly successful executives.” This finding, cited briefly by USA Today, June 7, 2006 at 2B, also noted that people who are Meyers-Briggs introverts are among the most creative (See my post of June 11, 2006 about Meyers-Briggs shift toward extroversion.).

Some people have questioned whether teams come up with creative ideas more than do than individuals working alone. The data makes me wonder about the importance of creativity to in-house counsel. Not all solutions to a problem are creative.

“The term attention density is increasingly used to define the amount of attention paid to a particular mental experience over specific time. The greater the concentration on a specific idea or mental experience, the higher the attention density.” (David Rock and Jeffrey Schwartz, “The Neuroscience of Leadership,” Strategy + Business, Summer 2006 at 77).

The article explains that a study of managers found that “a training program alone increased productivity 28%, but the addition of follow-up coaching to the training increased productivity 88%.” (77) Law departments ought to heed this. They ought to couple training with post-training individual guidance.

“Cognitive scientists are finding that people’s mental maps, their theories, expectations, and attitudes, play a more central role in human perception than was previously understood,” as explained by David Rock and Jeffrey Schwartz, “The Neuroscience of Leadership,” Strategy + Business, Summer 2006 at 76 (See my posts of Sept. 10, 2005 on mental models and frameworks; Sept. 22, 2005 on mental models and decisions; and Oct 1, 2005 on efficient and effective as mental models.).

One study cited in the article found that sudden bursts of high-frequency gamma waves appear in the brain just before moments of insight. This energy appears to create links across parts of the brain. The same study found the right anterior superior temporal gyrus being activated. This part of the brain is involved in perceiving and processing music, spatial and structural relations (such as those in a building or painting), and other complexities of the environment.

The findings suggest that at a moment of insight, a complex set of new neural connections is being created. These connections have the potential to enhance our mental resources and overcome the brain’s resistance to change. When people solve the problem themselves, the brain releases a rush of neurotransmitters like adrenaline. If you want people to change their behavior in a law department, help them to come to their own insights.

In pop psychology terms, a person’s left brain rules logical, linear, sequential thinking. The right brain nourishes creativity, vision, intuition. By the lights of some advocates, much rides on this cerebral split (See my post of March 16, 2006on dednah-tfel lawyers.). For instance, some view “management” as left brain and “leadership” as right brain.

When a large number of Canadian corporate counsel ranked the importance of 11 personality traits, they inadvertently gave some insights on left/right brain (See my post of May 14, 2006 on the traits.).

One might say that the “Ability to see the big picture” is right brain. Whether or not that is so, 35 percent of the Canadians gave it a number 1 ranking and 68% of them gave it a 1, 2, or 3 ranking of importance. So is “Creativity” (4% 1-21% 1, 2, or 3 ranking).

How a general counsel and his or her direct reports position and scope a problem – how they frame it – goes far to determine how effectively they cope. If you don’t wisely frame a problem, the rest of your decision making will be handicapped (See my post of Dec. 19, 2005 on commitment to “strategic frames.”).

An appropriate frame for a decision takes a broad view, weights considerations fairly, considers the relevant factors (See my post of May 10, 2006 on influence diagrams.), and doesn’t privilege any particular solution. The most effective frame might not be “litigation,” or “negotiation,” or “public relations,” for example, but a mix of all those perspectives and more (See my post of Sept. 10, 2005 on mental models.).

Karen Cottle, the general counsel of Adobe, responded to an interviewer’s question about how to empower subordinates, inform: Life Law, & Business, Issue 1 at 9. She said that general counsel need to make sure those lawyers understand the business and that the general counsel should “giv[e] them the tools to make decisions.” What could Cottle mean by “decision tools”?

The first category includes what everyone agrees are tools.

Tools: People can make better decisions if they use spreadsheets, graphics, visualization software (See my posts of Dec. 9, 2005 and Feb. 16, 2006 on such software.), decision-trees (See my posts of Oct. 24, 2005 on FMC and Jan. 17, 2006 on other aspects.), Monte Carlo simulations (See my post of May 15, 2005.), Franklin T’s, and other decision aids (See my post of April 2, 2006 about Predix.).

Corporate lawyers get advice and give advice, so what precautions can they take in light of the research findings of Francesca Gino, reported in the Harvard Bus. Rev., March 2006 at 24-25? “[P]eople tend to overvalue advice when the problem they’re addressing is hard and to undervalue it when the problem is easy.”

What the research means is that if you think you know the answer to a legal issue, don’t be too quick to wave off advice from others. Conversely, on the tough nuts, leaven the advice of others with a bit of skepticism, lest you over-value what they say.

Finally, another advice-related bias the research found “compels people to overvalue advice that they pay for.” The high priced law firm enjoys that golden halo, but its advice should still be considered even-handedly.

The best way to make good decisions is to ignore what you have invested to date, say for example in your matter management system or the furniture or the library. Set aside thoughts about what you have poured into the hole; think only whether going forward, if you were starting afresh, you would keep the resources flowing to support the asset.

The sunk-cost fallacy refers to how all of us pine too much for money spent and find it difficult to abandon the past’s expenditures: “How can we change our portal after all we have invested in training, software, and customization?” The rational question is more like: “Forget the past. Is this improved portal what we want for the future?”