Articles Posted in Thoughts/Observations

This blog uses the word “negotiate” frequently, because it is a skill in-house lawyers commonly called on to exercise (See my post of Sept. 25, 2006: should rarely be the role of lawyers to negotiate most contracts.). Negotiation skills show up mostly with law firms, sometimes with vendors, and occasionally with clients.

Most of the instances written about here arise from the effort to hammer out with external counsel some kind of alternative fee arrangement (See my post of Oct. 15, 2007: negotiate terms with outside counsel; Feb. 10, 2007: do inside lawyers lack negotiating skills vs. outside lawyers; Aug. 26, 2005: understand how law firms operate when you negotiate; July 27, 2007: difficulties negotiating alternatives to hourly rates; Nov. 6, 2007: time constraints on negotiations with counsel; Sept. 28, 2008: two weeks to negotiate a contract after RFP process; and Nov. 30, 2008: negotiate simultaneously with two contenders.).

Some posts refer to negotiations with vendors other than law firms (See my post of July 31, 2006: negotiate national rates; Aug. 20, 2006: how to reach terms with vendors; and April 15, 2009: law departments have more clout with vendors than do law firms.).

A study by Spencer Stuart in 2007 of the SAP 500 found that five percent of Boards of Directors had a standing committee for “legal/compliance.” Of those committees, 92 percent were composed entirely of independent directors. The research data can be found from the Spencer Stuart 2007 board index.

In the 2008 board index, one of the questions asked members of boards what kind of background they wished new directors to have. Out of the 127 responses to that question, a tiny one percent checked legal, which was the least desired of eight varieties of expertise. HR expertise, the next most commonly checked, was six percent. Another research finding is that lawyers are the least likely to chair any of the big-three committees on boards.

In short, there isn’t much respect at the Board level for legal thinking according to these studies

Hysteresis, lasting effects on law departments from the economic crash. The Economist, Vol. 393, Oct. 3, 2009 at 13, explains ”hysteresis,” a term taken from physics and adopted by economists to describe how unemployment may suffer lasting effects from drops in demand. Perhaps lawyers, in turn, should adopt the term to describe how the current pursuit by general counsel of cost reductions and new ways of doing business may permanently dampen demand for services as they have been traditionally rendered by large law firms.

Grace period for law firms to contest write-offs by the law department. Some general counsel may wish to include a provision like this in their outside counsel guidelines. “The firm must raise any question it may have about a write-down within 60 days of notification of the write-down or waive its rights to contest the write-down” (See my post of March 8, 2009: write offs and bill reductions with 8 references and one metapost.).

“Integrated management philosophies” – big thoughts for big thinkers. I read that “Like many administrative innovations, TQM represents an integrated management philosophy rather than a clearly defined technology or set of techniques.” Aha, that heavy-duty term, “integrated management philosophy” probably also applies to Six Sigma, benchmarking, change management, and strategic planning. As described in Admin. Sciences Quarterly, June 1997 at 370, each of those clusters of techniques expresses a set of beliefs and values – a philosophy or world view – about how to get the most from people and resources.

Ten more embedded metaposts (See my post of Sept. 13, 2009: Part XXXIX), each tethered to the number of its back references.

1. ACC Value Challenge (See my post of Sept. 14, 2009: Value Challenge with 7 references.).

2. Creativity II (See my post of Sept. 26, 2009: creativity with 13 references and 2 metaposts.).

“Longer tenure provides a better understanding of organizational policies and procedures and a reluctance to change past manners of operating.” (emphasis added). This quote from the Admin. Sciences Quarterly, June 1997 at 219, led me to wonder whether management initiatives drop in frequency as of general counsel settle into the organizational saddle. It’s hard to question the familiar world around you; a goldfish never frets about the bowl. What frustrates me is that we simply do not know.

The lacunae of research on managerial change in law departments galls me. We have no informed ideas about the diffusion of innovation, the sources of innovation, the pace of innovation, the timing of changes, or the results (See my post of April 9, 2009: empirical research with 8 references.).

For example, we might all jump to the conclusion that a general counsel who comes in from outside would be more likely to inject new practices than a general counsel promoted from within, one who is indoctrinated in the status quo and mindful of the former peers who would object to change. The newcomer has so much on her plate, such as developing the trust of senior executives, that if its not shattered, leave it alone.

Analysis of writing style on this blog. The most recent 17 pages of posts on this blog amounted to 7,686 words in 332 sentences. Passives were used – sorry, I wrote passive constructions in five percent of the sentences. The Flesch Reading Ease was 46.1 while the Flesch-Kincaide Grade Level was 10.8. A Flesch Reading Ease Score in the range of 40–50 indicates a relatively complex document that might score a 12 Grade Level. The Flesch Reading Ease Score uses the following equation: 206.835 – (1.015 × Average Sentence Sentence Length) – 84.6 × Average Syllables per Word. I love it!

Funding secured by contingent fees. ViaLegal Funding provides attorneys with loans and advances using the value of contingency cases as collateral. http://www.vialegalfunding.com/ This is another example of third-party financing of litigation (See my post of May 21, 2009: lawsuit financing by groups with 8 references.).

More than your individual attributes, your industry and company shape your role as general counsel. Peter Kurer, the former chairman of UBS and before that its general counsel, spoke at the Legal Week Corporate Counsel Forum. He believes that systemic drivers and value influence general counsel more than their individual traits. For example, those serving in regulated industries tend to have more of an important role than those in non-regulated industries. Similarly, lawyers are relatively more important if their industry tends to cartelize.

For headcount calculations, sometimes a “lawyer” isn’t a “lawyer.” Discussing a consolidated legal department, a sidebar in Mark Prebble, Managing In-House Legal Services: Providing High Value Support for Your Organisation (Thorogood 2009) at 41, mentioned how hard it was to ascertain what internal legal resources were already in place across nearly 30 countries. “It was also difficult to determine which ‘lawyers’ were in fact professionally qualified within their jurisdictions and which were other legal specialists.” The definition and qualifications of a “lawyer” differs greatly by jurisdiction.

Rule of thumb for panel selections. “If you are putting together a panel, it is probably not worth approaching more firms than twice the number you expect to end up with.” That is the guideline suggested in Mark Prebble, Managing In-House Legal Services: Providing High Value Support for Your Organisation (Thorogood 2009) at 41, without further explanation (See my post of April 18, 2009: law firm panels with 6 references.).

Another two publications on legal department management. Several posts have drawn on points made in Mark Prebble, Managing In-House Legal Services: Providing High Value Support for Your Organisation (Thorogood 2009). The “special briefing” covers many aspects of managing a legal team, mostly from the British standpoint. An earlier briefing by the same publisher is by Barry O’Meara, which I referred to before (See my post of Feb. 10, 2007 #3: Insights into Successfully Managing the In-House Legal Function, then noted as published by Hawksmere in 2000.).

Ten more embedded metaposts (See my post of Aug. 27, 2009: Part XXXVIII), each followed with the number of its back references.

1. Billing hyperpost (See my post of Jan. 2, 2009: 8 metaposts.).

2. Contracts(See my post of Sept. 2, 2009: contracts with 48 references and 1 metapost.).

Here are the ten best from July. For each, the bracketed text after the header gives a brief description of the post; click on the post title to read it in its entirety. If you would like all the posts at once, email me rees@reesmorrison.com and I will be return them to you.

“When you go to battle, you hire the army not the soldier” – not an apt metaphor for firm vs. partner (July 23, 2009)

[This quote struck me as misguided, for at least six reasons]

Corporate credit unions as a cost of lawyers. I had never thought of it, but if a company supports a credit union, its in-house attorneys can benefit. Thus, it is yet another cost that is unlikely to be allocated to the legal department and therefore included in the fully-loaded cost of its lawyers (See my post of Aug. 27, 2008: fully-loaded cost per lawyer hour with 31 references; and March 9, 2009: fully-loaded with 7 more posts.).

Vendors that provide job competency evaluations of legal departments. A tantalizing item from the General Counsel Roundtable in October 2004 says that one of its reports provides “profiles of four vendors that provide job competency evaluations of in-house legal departments.” The notion of a legal department’s core competencies is related, but presumably not the same as the job competencies of an individual in the department (See my post of May 23, 2008: core competence with 12 references.).

Reporting lines of the chief compliance officer as per the Federal Sentencing Guidelines. The Guidelines contain provisions regarding reporting structures of corporate compliance functions. Specifically, many compliance officers and lawyers cite and interpret Sections 8B2.1(b)(2)(A) and (C) and the accompanying commentary. The question under the Guidelines, I read recentlyl, is whether a chief compliance officer needs to report to the board of directors or, alternatively, may report to a committee of the board. In my experience, however, many compliance heads report to the chief legal officer (See my post of Jan. 20, 2009: reporting lines of compliance function with 11 references.).