Articles Posted in Tools

The adept use of statistics can greatly strengthen those who manage inside lawyers. Four uses of statistics particularly stand out: to explain, to change minds, to forecast and to diagnose. Here are brief comments on each application. Statistics can:

 Describe a phenomenon, such as the concentration of spending on law firms (See my post of March 24, 2005 concerning concentration over convergence.). The visual display of statistical findings has been explored on this blog (See my post of Oct. 1, 2006 and several instances.)

 Persuade people, such as to use a Pareto analysis of the value of various patents (See my post of March 21, 2006 on how few patents are worth much.);

An ad by K&L Gates in InsideCounsel, Feb. 2007 at 94, offers comments by Peter Kreindler, the general counsel of Honeywell. Kreindler describes an internal legal web site his department maintains for clients (See my posts of June 6, 2006 and March 1, 2007 #2 for more on this site.). All well and good and standard.

But Kreindler’s team unusually maintains a second web site that is accessible only by the 100 lawyers and other members of the Honeywell legal department. “Its focus is on best practices, knowledge management and practice management. It is an extraordinary productivity tool.” The short reference does not explain why the material available only to the law department is not also open to clients, but the underlying notion is sound: what we share internally does not have to be as polished and thought through as what we expose to clients.

Moments are terms statisticians use to describe the distribution of data points. Consider how a law department’s invoices can illustrate four moments (See my post of May 31, 2006 generally on statistics and references cited.)

The first central moment is zero (See my post of Nov. 30, 2005 on illustrations of means, modes, and medians.) and doesn’t do much for us.

The second central moment is the variance, the square root of which is the data set’s standard deviation. This figure describes how the amounts of invoices a law department receives are distributed around the average invoice value (See my post of Oct. 24, 2005 on standard deviations.).

Even if a law department figures out the right strategy, there are many slips ‘twixt cup and lip. At least 10 of them come to mind as problems with implementing the proper strategy:

1. Too much work

2. Lack of sufficient metrics to determine whether the strategy is successfully implemented

A management initiative intends to change of capability, whereas a process repeatedly cycles through similar tasks to produce a result. An online site says that a process is “a sequence of activities that take an input and produce an output. In business, a process is supposed to add value to the input before producing the output.” For law departments, a process is the fundamental unit of activity that needs to be managed; it describes how the department produces value.

Two examples should illustrate the difference between and initiative (or program) and a process. When you set up a pro bono program it is an initiative; thereafter, when you take on a new pro bono matter and handle it, you are in a process. To address the long-term filing needs of the legal department by research into alternative solutions, investment and implementation is an initiative; thereafter to file the red-wells of a particular matter or to bar code documents is part of a process.

This definition is leaky, I agree, because a management initiative, such as to increase diversity, is not likely ever to end, and thus partakes of a characteristic of a process (See my post of Oct.17, 2006 on processes and their tools.).

We all know the session evaluation form to be completed at the end of the training session or the two-day conference on leadership. Those forms may tell the organizers and sponsors about the food, location, pacing, and other features of the event – but they can’t tell whether the objectives of changing people, inspiring people, or teaching people were achieved.

Months afterwards, as long as six or eight months after the event, is a better time to ask what participants really learned and how much value they obtained. For many, it will be a test to even remember what took place; for others, they will have tried out the ideas of the event against reality and judged whether any beneficial learning took place or whether the social networking paid off (See my post of Sept. 22, 2005 about the ten best law department retreats I have enjoyed; and March 25, 2005 about my Rule of Three for retreat topics.).

The notion of a portfolio, a collection, has many applications in law department management. Legal departments have an assortment of initiatives underway (See my posts of March 27, 2005 about the value of an inventory of them; and Feb. 6, 2007 on an innovation pyramid.); together they comprise a portfolio. Lawsuits make up one or more portfolios, and should be managed as such (See my posts of May 17, 2006; and April 17, 2006 on the beta of a group of cases.).

Patents fall naturally into portfolios (See my post of Jan. 16, 2006 on Ocean Tomo auctions) as do aggregations of current and future matters put out for competitive bid (See my post of Dec. 14, 2005.).

More unusual applications of the portfolio concept demonstrate its range and versatility. For example, decisions made by senior lawyers can be conceptualized that way (See my post of Jan. 17, 2006); there is portfolio view of human capital (See my post of May 10, 2006.); and the range of responsibilities a general counsel or chief legal officer takes on has portfolio characteristics (See my post of Aug. 27, 2005 on the role’s “protean scope.”).

Rossabeth Moss Kanter of the Harvard Business School urges senior executives to categorize their investments in innovative products or services by means of a pyramid. At the top are a few “strategic bets,” in the middle is a wider set of new efforts and pilot projects, and at the broad base are “many incremental quick wins and continuous improvements.” According to Bus. Week’s IN, March 2007 at 3, this conceptual schema helps executives “have a variety of new concepts in play with varying degrees of risk and returns.” How might these ideas benefit general counsel?

A general counsel not only should inventory management initiatives underway (See my post of March 27, 2005 to this point.), but also should think of them in terms of a risk pyramid. One or two big changes are enough – think of a new matter management system or a concentrated commitment to pro bono (See my post of Feb. 10, 2007 about overuse of the adjective “strategic.”). Departments can handle a larger number of new forays, such as to pilot fixed fees with a firm or to collect electronic versions of work product from outside counsel. Finally, all the ongoing improvements – bar coding files, speeding up the accrual reporting process, choosing a template for severance releases – can be thought of in the bottom layer (See my post of Aug. 22, 2006 on the notion of kaizen.).

Of course it’s not just initiative risk that needs to be distributed and assessed, but also the pace, number, and resources required of operational changes.

In 1992, the general counsel of Reebok, Jack Douglas, drafted what he called the Reebok Rules. Have those famous Rules passed the test of time?

To start on that profound question, I categorized the 23 rules into five topical areas. According to this exercise, nine addressed productivity (No’s 8, 9, 11, 13, 14, 17, 19, and 20). Five focused on client satisfaction (No’s 2, 4, 6, 16, and 22). Four have to do with what could be described as professionalism (No’s 10, 12, 15, and 21), three have to do with the relationship between providing business and legal advice (No’s 1, 3, and 7), and two touch mostly on talent (No’s 18 and 23).

Riveting, but are the Rules au courant? Fifteen years ago, Douglas omitted any Rules related to the use and management of outside counsel; said nothing about cost control, nor even whiffed at benchmarks. His rules slight technology (except a side mention of a coffee maker and telephone) and he neglected any mention of either training and knowledge management or the scope of responsibility of the law department.

A hardy band of practitioners carry the torch for artificial intelligence and rules-based legal drafting or analysis. Among the few whom I know are Marc Lauritsen (Capstone Practice Solutions, Harvard, MA and see my post of Jan. 28, 2007.) Eric Little is another, who is now at Wilson Sonsini but who twenty years ago formed Analytic Legal Programs and continues to work in the field of legal document assembly. Seth Rowland at Basha Systems is also a veteran in the field of rules-based logic for document construction.