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If lawyers take the time, they can record the lessons they learn from their practice. Among the many forms recordation takes, this blog has recognized guidelines, checklists, and annotations. Here, to make explicit my tacit posts, I have collected them.

As to checklists (See my post of Jan. 26, 2010: checklists with 9 references.).

Guidelines differ from checklists in that the former discuss what to do, the latter just list steps to take (See my post of July 2, 2007: when a law department lawyer should or may retain a firm; Feb. 16, 2008: when to retain a law firm; Aug. 26, 2008: pro bono involvements; April 22, 2009: Cisco’s guidelines for patent preparation and prosecution; March 4, 2010: Law Society guidelines as the services of management consultants; March 9, 2010 #2: Council on Litigation Management’s travel rules; and Aug. 25, 2010: protocols for trademark usage.).

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Brad Blickstein, David Cambria and all the others on the Law Department Operations Survey Board have done a good job over the past three years to collect and analyze data from US heads of law department operations. Having once again extracted interesting findings from their latest survey report, now in its third annual incarnation, I looked back on my previous coverage.

First Annual (See my post of Dec. 21, 2008: three out of four of the 50 respondents report to the general counsel; Dec. 23, 2008: ranking of 10 most important attributes; Dec. 23, 2008: three primary sources of administrators; Dec. 23, 2008: about half manage own budget; Dec. 26, 2008: document management software and its frequency; and Dec. 26, 2008: style of ranking questions.).

Second Annual (See my post of Jan. 25, 2010: chiding LDO over self-serving estimates of dollars saved; Jan. 28, 2010: some limits of influence of administrators on change; Jan. 28, 2010: ranking of 16 ways to save costs; Jan. 29: five more ways to save costs; and March 31, 2010: 31 titles amassed for administrators.).

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“[T]heory is a statement of concepts and their interrelationships that shows how and/or why a phenomenon occurs.” That definition from the Acad. Mgt. Rev., Jan. 2011 at 12, pushed me to contemplate the enormous amount of work that needs to be done for someone to even propose a theory of law department management.

In truth, we have barely begun. A large crowd of concepts jostle and contend, so far are we from a proposal to sort them, organize them, or unify them. Interloper theories borrowed from other disciplines have widely varying applicability. Metaphors intrigue but don’t enlighten.

All the social sciences fawn over the verifiability and reach of physical science’s theories. As examples, quantum theory and general relativity are, shall we say, light years ahead. The complexities of people interacting even within a small department, let alone with clients and law firms, make provable causal relations impossible to specify. According to Albert-László Barabási, Bursts: The Hidden Pattern Behind Everything We Do (Dutton 2010) at 65, the renowned philosopher Karl Popper, concurred. “If humans are involved, prediction is impossible, so don’t even bother.” Scientific laws permit, in fact depend on, prediction, but we will never be able to predict that a given management effort for a legal team will lead to a specified result. At best the probabilities of the result will increase as the effort takes hold, but deterministic cause and effect will remain far out of reach.

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In the 50 law departments of companies with the most revenue that have responded to the 2011 General Counsel Metrics benchmark survey, 36 of them report a matter management system. It dismays me that 14 of them (28%) did not report a system, but that may be because the person who completed the survey did not know it, did not care enough to find out, rushed by the question, or did not want to disclose something they consider a proprietary advantage.

Of the same group of 50, the smallest being $4.7 billion of revenue last year, three reported that they have a customized system developed in-house. I am surprised that those legacy efforts survive from back in the day when internal IT shops said they could write a better system and keep it up.

This early sample may not be representative of the universe of large law departments. Stay tuned for findings from hundreds more law departments. Even so, this modest finding does make one wonder about a market where perhaps a third of the potential licensees of matter management software have not done so (or not reported they have done so).

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Several times I have ventured that total legal spending correlates positively with the profitability of a business sector. When margins are generous, it seems quite likely they justify legal investments to create intellectual property, build corporate infrastructure (new initiatives, evolving law, global spread), and consummate corporate transactions (M&A, equity and debt offerings, joint ventures). Counsel costs match profitability.

Drilling down a level, it may be that litigation happens more commonly when companies spar over their respective slices of the profit pie. In a burgeoning industrial niche, companies may not sue each other as much. With plenty to go around, why fight?

On the other hand, when the standards and operating procedures of a segment are in flux, when competitive juices run high, the duels might break out more. Or when fundamental platforms shift, such as the struggle between online search and online networks, the legal gladiators trot out. Since I view corporate litigation as business by other means, I suspect that fast-moving, exploding sectors see more of it.

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It is inexcusable for general counsel in this decade of cost scrutiny not to know and understand what their lawyers cost the company on an hourly basis, including but far from limited to their compensation. In-house legal talent comes at a cost that derives from pay and benefits, certainly and largely, but also from leverage, outside counsel usage, specialization, seniority, and infrastructure.

Twice before I have assembled metaposts on fully-loaded internal costs (See my post of Aug. 27, 2008: fully-loaded cost per lawyer hour with 31 references; and March 9, 2009: fully-loaded with 7 more posts.).

Since then the topic has remained very much alive (See my post of April 8, 2009: ratio of support staff; April 15, 2009: possibility that inside and outside costs will converge; Aug. 11, 2009: relationship with outside counsel payments; Sept. 5, 2009 #1: credit union expenses; Oct. 11, 2009: law firms bear technology and HR costs that law departments might not; Feb. 21, 2011: three unusual costs; April 13, 2010: fully-loaded costs are more accurate with time tracking; July 1, 2010: Hildebrandt benchmark survey gives $214 an hour in the US; and March 6, 2011: 5% annual increases for German law departments.).

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I wonder about the ratio of spend on software for matter management to spend on external counsel. Call that MMS-spend-to-total legal spend, such as $100,000 per year for the software and $10 million on average paid outside vendors, a ratio of 0.1 percent.

Similarly, what is the ratio between what law departments pay for maintenance and upkeep of intellectual property databases (See my post of Jan. 23, 2011: metapost on patent software.) and what they pay for annual IP expenditures of patent preparation and prosecution, annuities, patent agents and filing fees? Call that IP-database-to-IP spend.

Commonly, maintenance for such specialized software runs 15-18 percent of the initial license fee. Costs of customization, training, report creation, upgrades, and other expenses of the software add some more, but for both matter management and IP management the ongoing costs should be but a fraction of the actual expenses tracked. Nowhere have I seen any data on either of the ratios.

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My benchmark survey, General Counsel Metrics’ second year, through yesterday had obtained 190 participants. It is well on its way to breach the 1,000 participant milestone. Interestingly, of the law departments in so far, just under half did not participate last year. If most of last year’s 805 participants re-enlist, and 90 have so far, the prospects for fertile and comprehensive analyses are exciting.

These law departments and all others in April will get their first report in early May. So far it covers a total of 4,993 lawyers and $4.5 billion in total legal spending. About 55 percent are US companies and the other half come from 20 countries, led by Canada, the UK, and Brazil.

This benchmark data will be a useful resource for every law department that participates, and it costs nothing. Submit your basic staffing and spending data for your law department today. Click here to go to the confidential, short, online survey.

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A law department I recently read about boasted this strategy explicitly, which set me to wondering about its advisability. My conclusion: a bad idea.

Extended very far this logic would push a general counsel to in-source as much as possible and therefore balloon the headcount. Some lawyers would not have a full plate because the servings are too small or too infrequent. How many bankruptcy preference claims come along? Mixing both metaphor and cliché, we all recognize that to staff up to handle peaks of work plunges into the valley of the shadow of inefficiency.

It’s a bad idea to try to max out what inside counsel and staff do because they can’t see as many variations of a problem as can a partner at a firm who handles many like issues for several clients. My final attack stems from client self-service. Most people read “in-house” to mean within the legal department. Many legal-related tasks, however, can be left to clients, with a modicum of training and tools and an escape valve to check with the law department on exceptions.

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One of the questions asked by the Third Annual Law Department Operations Survey was for respondents to “rank the top three challenges of managing law department operations.” Coming in near the bottom, 7th out of 10, was “Stay abreast of law department technology.” With only 15 total points, very few of the respondents placed that challenge in their first three (where 3 points went to the top challenge, 2 points to a second, and 1 to third.).

It might be that for most administrators, investments in technology happen only now and then so between those active periods why bother to keep pace with new developments. Or it could be that the restrictive adjective “law department” leaves other, broader technologies to stay on top of. For example, social networks, clouds, search methods, and Internet calls are not limited to law departments. Then, finally, among the tough tasks that heads of law department operations face, technology awareness simply rates low on the list.