Articles Posted in Tools

Economists think in terms of a return on assets invested and use “Return on Investment” or “ROI” as their shorthand (See my post of March 26, 2006 on other terms used by economists that bear on law department management.). This blog has often used the term or the concept, but rarely in a commendatory way (See my posts of May 1, 2005 on bill review software; May 14, 2005 on knowledge management and ROI; May 14, 2005 on projecting savings from initiatives; July 31, 2005 on the implausibility of some ROI calculations; Feb. 17, 2007 with comments on products and services; Nov. 19, 2005 on Google’s early ROI in the law department; and Jan. 14, 2007 with GE’s claims.)

Put bluntly, I do not trust prognostications of future savings because too many assumptions and interests intrude.

I have written on the ROI of major initiatives (See my post of June 16, 2006 on the ROI of various management actions.). While I am four-square behind law departments that try to think through costs and benefits, both elements are very squishy.

When law departments are surveyed at random, and a single lawyer responds from each participating department, any given lawyer in larger department has a smaller probability of responding than a lawyer in a smaller department. More precisely, the probability of a lawyer being included in the survey is inversely proportional to the size of the department in a random sample of law departments, if lawyers within a department are selected with equal probability and there are no non-responses.

However, composition of the sample is affected by non-response. One source of non-response is non-availability: no one answers the phone, no one receives the message on the answering machine, or no one answers the email or letter. It seems reasonable to suppose that in a larger department it is more likely that someone will be in the office.

Statisticians have developed methods to correct for this bias, one of which is to create a probability-weighted sample. With these methods, large law department lawyers have the same influence as smaller law department lawyers.

More than 20 years ago, sociologist and organizational theorist Charles Perrow developed his “normal accident theory,” which was summarized thusly: “as the complexity and interconnectedness of systems increase, major accidents become inevitable and thus in a sense, ‘normal’.” MIT Sloan Mgt. Rev., Vol. 48, Summer 2007 at 64, explains one technique to help us anticipate normal accidents that may arise from complex situations.

“Agent-based modeling is a computer technique that simulates complex systems from the bottom up to capture their emergent properties.” The software has artificial intelligence rules enabling it to make decisions and act based on those roles. Additionally, the software agents may change or evolve, allowing new behaviors to emerge. Someday we may see an agent-based simulations for hostile tender offers, complex litigation, or merger negotiations.

Seemingly trivial topics on this blog harbor important points

Some posts hear deal with seemingly trivial subjects, ones that a general counsel would be excused for passing over quickly (See my posts of Oct. 18, 2006 on shredders; May 4, 2007 on cubicles and architecture; Sept. 21, 2005 on no-hire provisions in secondment agreements; Jan. 24, 2006 on voice training; June 16, 2007 on CLE and tracking it; June 6, 2006 on fingerprint identification systems; and Oct. 18, 2006 on RFID tags.

Of tiny importance these topics may appear, but each one contributes to the effectiveness of the law department, and each one can cause or reduce significant problems. In order they bear on confidentiality, morale, relations with outside counsel, leadership, knowledge management, security and records management. Each topic is a major concern, so the small components have importance.

Before a law department unveils a new initiative for everyone, it may conduct a limited pilot test (See Brad Blickstein’s post of Feb. 20, 2007.). As described in the Nat’l L.J., Vol. 29, July 9, 2007 at 69, General Electric’s law department wanted to collect diversity information through its e-billing system. Jay Brudz, the law department’s senior counsel overseeing legal technology, “began test-piloting a new diversity tracking system last fall … and the full rollout, which will cover 170 at GE’s law firms, is still underway.”

That the pilot test and rollout have taken the better part of the year is not surprising for a department as large as General Electric’s. To accomplish anything significant in a law department of much size means to bump into unexpected problems, endure endless internal meetings, create new policies and practices, impinge on someone’s prerogatives, and cope with intervening crises. A trial run, a practice test, helps smoke out such problems and douse the fires.

The Black Book of Outsourcing, compiled by Douglas Brown and Scott Wilson, contains its 2007 survey of outsourcing vendors. That publication contains a category for legal process outsourcers, the fourth ranked of which is LawScribe. I have not seen the book, but read about it recently.

According to LawScribe’s Mark Ross and his post of July 3, 2007, the survey also includes a category for legal document process outsourcing providers, with at least nine service providers (See my post of June 11, 2007 #3 and references cited on offshoring.). If someone could send me a table of contents, I will post more on this resource.

As I was chewing through my posts to find a morsel in support of one, I accidentally bit into two that refer to McDonald’s. Tasting a blog post, I hungrily scarfed up all the posts I could find about Ronald’s lawyers.

My quick drive through turned up seven posts, and at least that many references to them (See my posts of Jan. 16, 2006 on its document assembly software; Jan. 17, 2006 #1 regarding the reporting lines and responsibilities of its general counsel; Jan. 17, 2006 on its use of data from a corporate mainframe; Aug. 8, 2006 on its European general counsel; April 6, 2007 about its transformation of workers’ compensation; April 23, 2007 about its sabbatical program; and June 24, 2007 on the general counsel’s rise through the ranks.).

With that much material, the law department is certainly my burger king, and a sight for sore fries.

PNC Financial Services Group’s law department includes Robert J. Pugh, its chief counsel, technology and intellectual property. Pugh recognized that PNC needed a way to identify new technology-based systems and processes that might be patentable. As described in Counsel to Counsel, July 2007 at 12, Pugh began with an internal program to educate clients about what can be patented and why doing so is valuable (See my post of July 10, 2007 about no good deed going unpunished.).

Next, he targetted for additional efforts some areas within the company that might be especially fertile, such as departments that focus on product or application development.

What impressed me is that Pugh found out that PNC maintains a “Technology Initiatives” database that tracks information about new technology-oriented projects. He cleverly piggy-backed on that database. “To leverage the database, the legal department added a simple yet effective step – embedding a short series of ‘yes’ or ‘no’ questions concerning the initiative into the database and requiring each project manager to answer them.” Project managers need to take only another minute or two to answer the questions but if they answer in certain ways, the system sends an email to the law department that alerts the lawyers to a potential patent (See my post of Jan. 17, 2006 for how McDonald’s lawyers use a corporate mainframe database for real estate data.).

A manager in a law department first has to recognize that there is any problem (See my posts of Jan. 13, 2006 on a trio of consequences of managerial incompetence; and March 18, 2007 on general counsel who are bad managers.).

Then the manager has to decide that the identified problem justifies some action. After all, no good deed goes unpunished, every action has unintended consequences, and some things correct themselves (See my post of Aug. 22, 2006 on the economics of error.).

Thereafter, the manager has to choose what to do; there is no guarantee that the person chooses the best option (See my post of Sept. 22, 2006 on obstacles to choosing a law firm objectively; Jan. 17, 2006 on decision analysis tools; and March 18, 2005 on intuition and rationality.).

I like this provocative recommendation from Theodore Levitt, Thinking about Management (Free Press 1991) at 56: “To ascertain the likelihood of a forecasted event, one should always ask, ‘What else has to happen for that to happen?’”

Some examples strengthen Levitt’s suggestion. If you think that setting up an in-house discovery team (See my posts of Oct. 1, 2005 and Feb. 25, 2007 about Pfizer’s team.) will save money and improve quality, what else has to take place? If you want settlement dollars to be in your budget (See my post of May 30, 2006 for this practice.), for you to benefit what else will need to change? If you want to revitalize your legal intranet (See my post of March 12, 2007 about mini-intranet sites embedded on client sites.) what else must change? All change management efforts need to answer Levitt’s question.