Articles Posted in Tools

Someone needs to convince me that a summary of a law department’s aspirations – aka mission statement – makes any provable difference to the department’s effectiveness. Common in business they may be (See my posts of May 14, 2005 and June 9, 2007: Bain survey results.), but of unproven value they certainly are (See my posts of April 8, 2005: impossible to work with; Aug. 3, 2005: make them part of daily behavior; Aug. 3, 2005: “alignment with clients”; Oct. 21, 2005: three tests for their usability; Oct. 31, 2005: a link to corporate strategy; and March 2, 2008: mix targets and behavior change.).

Given the constant change of business, only the highest-level bombast can pretend to serve for long. How many mission statements go on about “world-class law department” (See my post of Aug. 22, 2006.)?

In the end, after much time and effort (See my posts of Jan. 15, 2006 and Aug. 3, 2005: mistakes made developing mission statements and the knowledge curse.) I fear it is full of sound and fury.

InsideCounsel, March 2008 at 44, gives an overview of “Web 2.0,” and a useful way to distinguish it from Web 1.0. Web 1.0 had one-way information sources, where you could read what someone who ran a particular site posted. You sent emails from a different system. Further, most participants on sites were anonymous.

Web 2.0 has two-way information exchanges, where users upload or enter their own thoughts and material. Spend time on a wiki (See my post of March 20, 2007 # 1: legal wiki of Alcatel-Lucent.) or a blawg (See my post of Feb. 20, 2008: six law-department blogs.). Further, you can communicate through the Web 2.0 site and know about your community members (See my posts of March 9, 2007: Legal OnRamp; Jan. 30, 2008 #2 LawLink.com; and Feb. 21, 2008: Texas Bar Circle.).

As the article points out, on top of these functions the law-specific sites that mobilize Web 2.0 capabilities create frequently-asked questions, special interest groups, information about members, and events (See my post of Jan. 19, 2008: LinkedIn.). Entrepreneurs and vendors are offering Web 2.0 sites that facilitate the swapping of information regarding law departments (See my post of Jan. 25, 2008: Martindale-Hubble and shared evaluations of law firms.). This new paradigm promises many advantages for corporate lawyers.

Imagine a three-lawyer department where both reports to the soon-to-retire general counsel are in competition with each other for the promotion. If each lawyer rigorously controlled the costs of the law firms he or she manages, both would be better off because, let’s postulate, they could both be paid more. But both lawyers have a compelling personal benefit when they use the best and most expensive outside counsel because it increases their individual chances of success and recognition. Each lawyer faces compelling incentives to pay more to outside counsel, which means their collective pay will lag. They know that the worst scenario is for their rival to invest in outside counsel while they do not (See my post of Oct. 10, 2005: politics and succession planning.).

Lawyers in law departments compete with other lawyers, and as the example shows this competition can give rise to the classic dog-in-the manager of game theory, the prisoner’s dilemma. Robert H. Frank and Philip J. Cook, The Winner-Take-All Society (Penguin Books 1995) at 127, further develop these ideas in the context of tournament behavior, where only one person can win (See my posts of Aug. 14, 2005: questions the relevance of game theory to law departments; Dec. 19, 2005: notes game theory as a major business concept; Feb. 8, 2006: possible applications; March 26, 2006: included as one of the concepts of economists; June 6, 2006 #2: Game Theory and the Law; and Jan. 1, 2008: agency theory draws on it.).

Implicit in the claim that something is a “best practice” is the assumption that another department’s circumstances are the same and problem is the same. Then the transplanted practice will take root and flourish. What may be a best practice under one circumstance may not hold true if those background facts change. Likewise, if the problem differs, the practice may no longer be best.

If you call something a best practice, you are declaring that, all other material things being equal, other practices are inferior. On the other hand, if you decry some practice, you are not nominating any other practice as the preferable alternative. Thus discussions of best practices have inherent asymmetry.

Besides the assumption of contextual stability and critical asymmetry, there is longevity: the duration of a best practice. Is it not inevitable that a best practice eventually slips behind a better practice? How can a best practice stay on top forever? Three servings for thought on best practices (See my post of June 6, 2006: best practices and references cited.).

A tool that some general counsel use to keep track of their key metrics is the balanced scorecard. A few posts on this weblog have poked and sniffed at balanced scorecards. Several law departments that actually user balanced scorecards are on display (See my posts of March 8, 2006: a balanced scorecard at Northwestern Mutual; Aug. 27, 2005: a British law firm’s scorecard; and Aug. 24, 2006: UTC’s law department scorecard.).

Other posts have broadened the discussion (See my posts of Aug. 4, 2006: dashboards compared to scorecards; Jan. 23, 2008: two-way balanced scorecard between firm and department; Dec. 9, 2005: data visualization software; and July 25, 2005: how to best embed metrics in reality.) while one recommends how to prepare a balanced scorecard (See my post of Nov. 8, 2007: how to prepare a balanced scorecard for legal.).

Benchmark Legal Research LLC has an ad in Inside Counsel, Feb. 2008 at 40. I do not normally highlight individual service providers but the service Benchmark Legal provides was new for me. According to their ad, they track and report on bills and regulations.

Many law departments monitor potential changes in the laws that affect their companies (See my posts of Sept. 5, 2005: Countrywide’s efforts to track such developments; and March 26, 2007: legislative and regulatory changes that affect employee benefit programs.). Here is yet another symbiotic vendor, part of the sprawling cottage industry that serves law departments.

The Program on the Legal Profession, based at Harvard Law School, is collaborating with the American Bar Foundation (ABF) on a project to examine the processes by which the legal departments of large corporations go about finding, selecting, and evaluating outside counsel. The project’s approach is to use in-depth interviews with general counsel of Fortune 500 companies, publicly available data, and a survey of general counsel to develop, in the words of the ABF’s 2007 Annual Report at 39, “the first systematic examination of the structure of purchasing of corporate legal services.”

I applaud academic thinking applied to the management issues of corporate law departments, because there has been too little of it (See my posts of July 4, 2006: empirical law department research; Oct. 23, 2005: the dearth of academic, empirical research; and May 5, 2006 – academics who care about law departments.). Mostly I hope that the findings of the project bring fresh perspectives and insights.

The College of Law Practice Management (of which I am a member) sponsors the InnovAction Award, which is designed to identify and honor innovation in law practice management. If your legal department has done something innovative – whether with technology, talent management, outside counsel, organizational structure or otherwise – please take a moment to review the InnovAction web site and consider submitting an application. The InnovAction Awards are prestigious and ideas that surface from them will be useful to the industry.

If you have any questions about the College or the awards, ask my friend Ron Friedmann.

Online networking sites that in-house counsel might find useful seem to be surging. The promise of linking with other lawyers who have like interests is infectious. I have written about LinkedIn (See my post of Jan. 19, 2008.) as well as LawLink.com (See my post of Jan. 30, 2008 #2.) and earlier I noted LegalOnRamp (See my post of March 9, 2007.).

In Law Practice, Jan./Feb. 2008 at 49, Tom Mighell describes the Texas Bar Circle, http://texasbar.affinitycircles.com “the first social networking site for lawyers provided by a state bar organization.” Among its offerings, in addition to the de rigueur member profiles, is a section for jobs, discussion areas, and affinity groups. We will undoubtedly see more online networks that target in-house lawyers.

Six Sigma is no doubt a tool for law department managers (See my posts of July 31, 2005: general introduction; March 7, 2006: terminology; May 7, 2007: a report on Six Sigma in law departments by KPMG Forensics. A law department that succeeds with Six Sigma projects can not only improve its processes but also can gain recognition (See my post of Jan. 30, 2008: CEO praise at Textron.).

Many applications of the Six Sigma discipline have appeared here (See my posts of August 27, 2005: Medco Health; Oct. 19, 2005: bankruptcy notices at Raytheon; Nov. 14, 2005: Lean Six Sigma at Xerox; Jan. 15, 2006: Lean Six Sigma at GE; March 9, 2006: NCR; March 15, 2006: early case assessment at DuPont; March 7, 2006: trademark renewals at TRW; March 8, 2006: patent processes at International Truck and Engine; Nov. 6, 2006: litigator workloads at AXA; Dec. 11, 2007: DuPont and selection of Interwoven; May 28, 2007: Tyco and selection of outside counsel.).

Even so, a few doubts have been raised about the applicability of Six Sigma to law departments (See my posts of Jan. 20, 2007: a process that drives out innovation; and Sept. 28, 2007: infrequent instances in law departments.).