Fifteen significant management developments over 150 years relating to law departments and their use of outside counsel

A fascinating categorization by Steven Johnson puts 200 of the most important innovations and scientific breakthroughs from the past 600 years into four categories. In his book, Where Good Ideas Come From – The Natural History of Innovation (Riverhead 2010) at 218 et seq., he breaks them into market-driven and non-market, then into individual efforts or network efforts by a group of people. The result is a two-by-two table.

Inspired, I resurrected twenty seminal innovations and managerial breakthroughs regarding internal legal departments and the law firms they use. My list, very roughly in chronological order, is absolutely a work in process. Some are too minor, I note, and few have a date of origination. At some point I may try to array them as arising within law departments or within law firms and perhaps at the same time place on second dimension of cost affecting or quality affecting, as I define those terms.

1. Creation of an internal legal function, perhaps in the United States for the earliest railroads, banks or insurance companies of the 1860’s (See my post of Oct. 24, 2008: historical references to management of legal departments with 7 references.).

2. Appearance of law firms that specialized in an area of corporate law as compared to generalist firms that served as a company’s “outside general counsel”

3. Practicing law firm partners on the Board of Directors of client corporations

4. Law firms retained and instructed at a distance; coordinating counsel

5. General counsel reports to CEO or President with a functional organization; later, multiple offices

6. General counsel hired from law firm that had served as outside general counsel

7. Monthly invoices per matter with some detail, thus bill review by the client

8. Financial controls such as budgets, benchmarks, reports to executive team, accruals; law department administrators

9. Regional counsel (See my post of Oct. 24, 2008: Eli Lilly and first regional counsel.).

10. Time recording by internal lawyers as well as outside counsel; paralegals hired by law departments

11. Relationship partners at law firms and counterparts in law departments

12. Outside counsel guidelines, engagement letters, evaluation forms, conferences

13. Matter management systems (See my post of April 9, 2006: in 1982-3 Equitable teamed up with CompInfo to develop LawPack on Wang but before that was an IBM 1430 group.).

14. Unbundling and the variegated cottage industry that supports law departments

15. Offshoring, outsourcing and multi-shoring

A slew of developments within law firms might be included if they influence services provided to law departments sufficiently: practice groups, practice support staff, multi-disciplinary partnerships, business intelligence, and marketing by law firms could be among them.