Articles Posted in Thinking

Managers in law departments might want to avail themselves of a decision-making method known as the Delphi technique. Cass Sunstein in Infotopia: How Many Minds Produce Knowledge (Oxford 2006) at 208, outlines the three key aspects of the technique, which is sometimes called the nominal group technique (See my post of Dec. 9, 2005: Delphi method (nominal group technique); Aug. 25, 2009 #2: criticism of Delphi technique; and Feb. 1, 2006 #1: introduced in 1964 by Rand researchers.). “First, it ensures the anonymity of all members [of a group that is trying to make a decision] through a private statement of views.” Anonymity reduces the effects of peer pressure, dominant personalities, or a prevailing majority opinion.

“Second, people are given an opportunity to offer feedback on one another’s views.” These conclusions also are given anonymously and fed back to the group through a facilitator. “Finally, and after the relevant communication, the judgments of the group members are elicited and subject to statistical aggregation.” Meaning, you collect and analyze the opinions.

Len Fisher, The Perfect Swarm: The science of complexity in everyday life (Basic Books 2009) at 83-84, describes the method a bit differently. “Circulate the problem to group members.” Next, “Collate the responses, suggestions, and supporting arguments.” Third, “send the collation back to the group members and ask them to rate the suggestions.” He does not mention anonymity but the process, which continues until the group tires or reaches consensus, is stated more clearly.

Marc Firestone, the General Counsel of Kraft Foods, said a few words at the InsideCounsel SuperConference about the pressures of being alone at the top. “It is important,” Firestone said, “for the General Counsel to have a mentor outside the company whom they trust – a wise head.” He has such a guide, a trusted advisor, and has found it cathartic to talk sometimes about the difficult decisions that reach his desk.

Some general counsel have a friend; some use a veteran partner at a law firm as the pressure valve and sounding board; others turn to an executive coach; spouses often provide support and encouragement; and some general counsel find guidance and support from a fellow member of a group for general counsel. Whatever, that support can be invaluable (See my post of April 14, 2005: coaches for general counsel; Sept. 25, 2005: no one else but the GC; April 28, 2006: the notion of “social distance”; and March 1, 2009: it’s lonely at the top, so there are many groups for general counsel to join.).

The probability that a group of people will arrive at a correct answer to a factual question increases toward 100 percent as the size of the group increases. This is the Condorcet Jury Theorem, as explained in Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford 2006) at 25, which holds true so long as a few restrictions are satisfied. One is that the people in the group must be independent, which means that they mustn’t influence each other’s opinions; they must be unbiased; most of them must be well-informed enough to have a better than 50:50 chance of getting the correct answer; and the actual answer must be known. These restrictions come from Len Fisher, The Perfect Swarm: The science of complexity in everyday life (Basic Books 2009) at 78-79.

If your law department has a lawyer conference and each lawyer is more likely than not to be correct about a fact, even if ever so slightly, the majority answer when submitted independent will be close to correct. For example, if the question were the average cash bonus awarded the previous year, and most of the lawyers have a sense of that figure, the resulting collective estimate will come very close.

We have all heard about and maybe even taken part in post-mortems. What about when something good happens? Does any law department systematically celebrate success and examine why it happened? Let’s call such a positive look back a “post-vivo” and thank the Harvard Bus. Rev., April 2011 at 72, for the idea and some guidance.

When a law department pulls off a coup ”it should investigate what led to it with the same rigor and scrutiny it might apply to understanding the causes of failure.” That can be hard for the same reasons it is hard to dissect a blunder: emotional, cognitive and organizational forces undermine the objectivity of the review. Still, a law department that triumphs should sip champaign but not stop there in its thirst for knowledge (See my post of May 27, 2008: post mortems with 7 references; and April 27, 2010: post mortems with 7 references.).

Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford 2006) at 55, discusses research about the shortcomings of groups when they deliberate. For example, members tend to become much more confident about their judgments after they talk together, but they are not any more likely to be correct. Second, “deliberation usually promotes uniformity by decreasing the range of views within groups.” Broadly, Sunstein states that “It cannot be shown that deliberating groups generally arrive at the truth” (at 57). Worse, they “do quite poorly at aggregating the information that their members have” (id).

Many readers of this blog may believe it unquestionable that a group improves on an individual when the group makes a decision. Well, question it, as perhaps it is an urban myth of social psychology. This contrary view is something like brainstorming shown to be less than touted (See my post of Dec. 31, 2008: problems with brainstorming.), or diversity in a group giving it headaches (See my post of May 26, 2010: heterogeneity may adversely affect teams.), or smart people not being more creative (See my post of March 21, 2011: no correlation of IQ and creativity.), or committees often stumbling (See my post of Aug. 28, 2006: attack on committee effectiveness.). Common beliefs may be wrong.

Social scientists have long recognized that most of us just naturally believe that the people around us look at the world as we do and behave as we would. We take for granted that we are normal and others travel to the beat of the our drum. This assumption academics call the egocentric bias.

Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford 2006) at 80, refers to this cognitive blinder and made me think how often it rears up in law departments. When we negotiate, we may mistakenly assume a similar set of values and desires on the other side. When we evaluate someone’s performance, the egocentric bias may obscure from us the other person’s worldview. When we talk or write, we unwittingly follow the form that suits our own style and perspective, ignorant of the other side’s.

“Decision-makers can digest only so much information, and only so fast; still, executives tend to request much more information than they actually use.” This observation from MIT Sloan Mgt. Rev., Spring 2011 at 57, resonated with me. It is so easy to send minions to mine data. As they say, “Nothing is impossible for the person who doesn’t have to do it.” But the cost in morale and loss of efficiency can be very high.

General counsel should be careful about what information they ask for, because the request – possibly an idle or lightly considered wonder – can set off a storm of activity behind the curtain

Hard on its explanation of “good failures,” an article in the Harvard Bus. Rev., April 2011 at 54, summarizes why organizations struggle to analyze failure constructively and learn from it. One reason is “because examining our failures in depth is emotionally unpleasant and can chip away at our self-esteem.” From the general counsel on down, no one looks forward to criticism. Later, the authors add a second reason: “analyzing organizational failures requires inquiry and openness, patience, and a tolerance for causal ambiguity.” Might any of those attributes be in short supply among in-house lawyers?

On the cognitive side, we all favor confirming evidence and pooh-pooh facts that challenge our beliefs. We know why the deal went south so don’t upset our self-protecting construction of reality. Fourth, “We also tend to downplay our responsibility and place undue blame on external or situational factors when we fail, only to do the reverse when assessing the failures of others – a psychological trap known as the fundamental attribution error (See my post of May 14, 2006: fundamental attribution error; and July 10, 2007: fundamental attribution bias.). “I won the trial!” or “The judge was biased, the jury went squirrely on me, that e-mail surfaced too late…..” As a last reason we don’t benefit from errors, the authors fault most post-mortems for failing to dig down to second- and third-order reasons for the lapse. “Joe blew it when he didn’t respond on time,” instead of realizing that the service of process company had a wrong forwarding rule or the new office had not been trained in the proper procedures for complaint processing.

Nine reasons for “failure” are listed in the Harvard Bus. Rev., April 2011 at 50, and three of them are commendable. This seeming paradox has strong significance for managers of in-house lawyers. We can praise failure if someone deliberately and thoughtfully tried something new and it didn’t succeed (referred to as “Exploratory Testing”). After careful analysis, let’s suppose, we retain a firm we have not used before but for whatever reasons the matter they handle goes bad.

Or a team in a legal department sets up a knowledge management experiment, with good intentions and as much planning as they could muster, but the idea just doesn’t take hold “Hypothesis Testing”).

Finally, also in the benign category of failure is “Uncertainty” – the most common failure that does not deserve censure.“ It is “A lack of clarity about future events causes people to take seemingly reasonable actions that produce undesired results.” The hard-won indemnification clause results in a contentious, time-consuming monitoring or litigation. Who could have known?

A general counsel faced with twenty candidates for an open position, or two dozen firms of which one can be retained, might despair at the time drain. Do you have to see them all or is there a golden number? Cheer up! Mathematicians have figured out how many you should interview. John D. Barrow, 100 Essential Things You Didn’t Know You Didn’t Know: Math Explains Your World (Norton 2008) at 86, describes the reasoning.

The bottom line is that with 100 candidates, “The optimal strategy is to see 37 of them and then pick the next one that we see who is better than any of them and then see no one else.” You need to know how many total candidates you might see. And you must keep score of those you see up to the tipping point. For all such sequential choice problems, the right point is to see 37 percent of the candidates and then select then next one that is better than any that preceded.

By the way, the book by Barrow has been fertile (See my post of April 15, 2011: to calculate how many documents were not found; April 28, 2011: geometric means; April 28, 2011: a trick to help a weak candidate win; and April 29, 2011: statistical error.).