Articles Posted in Tools

Most of the material on this blog comes from US law departments and has their perspective, but insights and examples of practices have come from all over the globe.

I have presented material on management from at least eleven countries: Australia (July 4, 2006, June 16, 2006 and June 30, 2006); Canada (May 10, 2006); China (June 13, 2006 about Haier; and July 30, 2006 on size and spend of law departments’ size); France ( Aug. 26, 2006 on size of largest departments); Ireland (June 16, 2006 and the Bank of Ireland); Kenya (March 10, 2005); Malaysia (May 30, 2005 and Shell Malaysia); New Zealand (March 30, 2006 and total number of in-house lawyers); Poland (July 14, 2006 and contract handling); South Africa (Nov. 13, 2005 and diversity requirements); and many from the United Kingdom (for example, April 12, 2006 on heads of legal).

Other non-US posts have been on Europe generally (See my posts of April 18, 2005 on general counsel becoming more strategic; May 14, 2005 on formal complaint mechanisms; Sept. 5, 2005 on costs per hour; Oct. 29, 2005 on some benchmarks; Oct. 31, 2005 on expectations of outside counsel; Feb. 12, 2006 on employment litigation.) and Asia generally (June 15, 2005 on compensation for general counsel).

Here are a baker’s dozen of methods to improve the professional skills of in-house lawyers. I don’t vouch for them all, but at the same time there are likely to be many other methods.

1. Executive courses, such as in marketing, finance, accounting and strategic planning. (See my post of May 14, 2005 about a course at Harvard Business School.)

2. Customized training by a university, such as what Wharton is doing for Reed Smith and Boston University is doing for ACC Northeast (See my post of April 12, 2006 about university programs for inside lawyers and several related posts.).

Previous posts have mentioned outside counsel guidelines (See my posts of Aug. 1, 2006 that wonders about their effectiveness; Aug. 9, 2006 about certification by firms; Jan. 10, 2006 with an example; and Jan. 10, 2005 on retention or engagement letters and travel time.).

What haven’t been distinguished are the differences between guidelines and retention (engagement) letters. I define outside counsel guidelines as a generic statement of how a law firm should represent the client. It usually specifies such things as communications, bills, staff, decisions and generally acting in an ethical and responsible manner. By contrast, a retention letter governs a specific matter, and usually attaches important documents, but it mostly focuses on what the law department expects of the law firm on this specific matter.

Some companies conflate these documents. It is a better practice to limit retention letters to a specific case or matter and attach the outside counsel guidelines if the law firm is new in the service of the law department.

A balanced scorecard presents data that falls within the Kaplan/Norton four groups (See my post of Aug. 24, 2006 on dashboards.). An example comes from the law department of United Technologies Corp. (UTC). Its scorecard collects metrics in four areas: Financial Performance; Quality Processes & Products, Leadership, Culture & Environment; and Customer Satisfaction (From Jan. 2005 materials of ACC at 7, provided at a conference organized by the ABA Section of Business Law and ACC, Nov. 2005)

As Kaplan and Norton themselves write, “Balanced scorecards tell you the knowledge, skills, and systems that your employees will need (their learning and growth) to innovate and build the right strategic capabilities and efficiencies (the internal processes) that deliver specific value to the market (the customers), which will eventually lead to higher shareholder value (the financials).” Harvard Business Review on Advances in Strategy (HBR 2002), an article originally published in Sept. /Oct. 2000 at 75. The areas in parentheses are the four groups of the traditional balanced scorecard.

A dashboard presents crucial data all in one place. A dashboard (nee Executive Information System) often uses thermometers, graphs, colors, arrows and dials to convey the information. A dashboard that I developed for a law department had on one page 12 indicators of the department’s activities and outcomes.

Below the department level, litigation groups could be the most avid users of dashboards, for the reason that they can quantify many of their elements and outcomes (new cases, days of trial, documents produced, success rates, dollars spent, law firms retained).

A balanced scorecard, as proselytized by Kaplan and Norton, collects a raft of metrics in four categories but doesn’t try to present them all at one glance with visual dramatics (See my post of Dec. 9, 2005 on data visualization software; March 8, 2006 on a balanced scorecard at Northwestern Mutual; July 25, 2005 on how to best embed metrics in reality; Aug. 27, 2005 about a British law firms scorecard.).

The Japanese term kaizen reminds us of a powerful principle of management: continuous improvement – not resting on one’s laurels – is the path to enlightenment. Its thesis is one reason I dislike talk of best practices (See my post of July 14, 2005 about the difficulty of following suit.). If you adopt a best practice it seems to follow that there is no room or effort for improvement. Kaizen also supports my view that we should all critically and continually test our assumptions of how to manage (See my post of Sept. 10, 2005 regarding frameworks and mental models.). Kaizen further implies that you stop doing what no longer works.

To manage a law department well is to restlessly search for whatever shortcuts, speed-ups, tricks and productivity gains you can experiment with and adopt (See my post of Aug. 8, 2006 on productivity.). Let banzai (divine wind) waft in kaizen and avoid tora tora (danger).

Law department management practices have evolved over the past two decades (See my post of Feb. 4, 2006 on the shift in reliance from external corporate lawyers to litigators.). Evolution, by which I mean the process over time of variation (mutation), selection and replication, has performed its magic on corporate legal functions (See my post of Jan. 3, 2006 about evolution and fairness detection.).

Sound practices, such as evaluations of performance and matter management software, emerge and thrive and spread. Good ideas reproduce in a Darwinian world of management capabilities (See my post of Feb. 16, 2006 on organizational DNA according to Booze Allen; and May 1, 2005 on evolutionary computing to solve problems.). Hard-earned experience by many law departments over time winnows out ineffectual ideas struggle before they eventually go extinct.

The so-called Poisson probability distribution allows you to calculate the likelihood of an event happening. It’s necessary at the start, however, to know roughly how rare the event is. But if you do know that, as far as I can gather from John Allen Paulos, Innumeracy: Mathematical Literacy and Its Consequences (Hill and Wang, 1988) at 48, you can use this frequency information along with the Poisson formula to get a quite accurate idea of the event’s occurrence.

For example, in what percentage of the years to come there will be a class-action lawsuit, a disabling conflict of interest with your primary law firm, or an acquisition larger than $1 billion. If a number of companies pooled their data, there would be nothing fishy about a Poisson calculation.

Portal software draws on different databases to compile a broader picture of data (See my posts of May 1, 2005 on IP databases; and Aug. 5, 2005 more generally on law department databases; and June 27, 2006 with links.). Hypothetically, a law department with a portal could search regarding a particular matter. The portal would gather some information from the matter management system, other information from the document management system, a piece or two from the corporate secretarial package, some from email, and perhaps something from other electronic sources. Another use might be to gather input about a particular lawyer’s work during the year. The composite would offer much more understanding than any one system alone.

Only the largest law departments will find the investment in a portal defensible, it seems to me. I am a strong believer in the value of information, but the effort to design and implement such a system is not likely to be rewarded by sufficiently valuable information.

If a portal had some kind of ranking system or analysis capabilities (See my post of Aug. 14, 2006 on software that summarizes.), that might narrow the gap between cost and value returned, but I have significant doubts that we will see portals make in-roads in law departments in the next five to 10 years.

Lawyers and paralegals who work in-house might find helpful a new genre of software – document summarizers – if they have to make sense out of large agreements, slews of letters, lengthy reports, or other documents that need to be boiled down. According to the Fin. Times, June 23, 2006 at 8 (Paul Taylor), at least four of these programs can be licensed for less than $100 each. He mentions Sinope Summarizer (Carp Technologies), Pertinence Summarizer (Pertinence Mining), Copernic Summarizer (Mamma.com), and Summarize! (Corpora Software).

The packages combine advanced statistical and linguistic algorithms to pick out the key concepts of a text and to extract the most relevant sentences for a condensed version of a document. I have not looked at any of these programs, and did not even know they existed, but they sound like they might help in some areas of corporate practice.