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A pair of professors at Boston University’s School of Law have calculated a price tag for the direct costs stemming from patent troll activity: about $29 billion. The $29 billion figure excludes a host of indirect costs to the defendants’ business, “such as diversion of resources, delays in new products, and loss of market share,” the study states.

James Bessen co-authored the study with Michael Meurer, “The Direct Costs from NPE Disputes.”. In 2011, companies defended 5,842 suits initiated by NPEs, up from 4,445 in 2010, and 1,401 in 2005.

The professors analyzed a database of NPE-related lawsuits developed by RPX Corporation, which specializes in patent risk solutions, as well as a survey of defendant companies about their costs.

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KIE Square, a consulting firm that specializes in advanced business analytics, has developed a business intelligence application. According to KMWorld, July/Aug. 2012 at 15, the software helps identify shipments likely to violate import regulations on the basis of the importer’s declarations and other paperwork (See my post of Jan. 24, 2011: Jim Bartlett of Northrop Grumman and his compilation.).

 

The article mentions that the text analytics capabilities of the software can spot the likelihood of wrongdoing far better than high-level structured data. This appears to be a good example of software that could supplement the expertise of an in-house lawyer (See my post of April 4, 2011: guidelines, checklists and annotations with 13 references and 1 metapost.).

 

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The International Association of Outsourcing Professionals ranks what it defines as the global outsourcing 100 leaders.  Listed in Fortune, July 23, 2012 at 55, a few of them have some involvement with legal outsourcing.  I noted on a quick glance Donnelley Global Outsourcing and SPI Global.

 

More interesting was the “rising star” LegalBase www.legalbaselaw.  Its website explains that in 2008, Ali Tyebkhan co-founded the Sri Lankan company.   Many countries house legal offshoring facilities, but this was only the second time I have mentioned Sri Lanka (See my post of Dec. 28, 2010: lists 11 countries.).  LegalBase unabashedly holds itself out as a law firm, providing legal services through its model of on-the-ground lawyers admitted to practice in various jurisdictions supported by offshore employees.

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Tax policies, employment laws, and cultural predispositions discourage companies in some major countries from growing much.  In Spain, according to Fortune, July 23, 2012 at 16, and as holds in Italy I believe, very small firms are disproportionately represented as compared to the United States.  It is much easier for reasonably-sized companies to sustain a legal department.

 

Thus, some of my elaborate estimates of the number of law departments around the world – based on population or GDP, for example – may be seriously flawed if business conditions or cultural styles limit the number of companies that reach law department size.

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“Over the past two decades Spanish companies in sectors where products and services can be traded internationally raised their productivity five times more than their counterparts in purely domestic sectors.”  That finding in Fortune, July 23, 2012 at 16, suggests another reason why larger companies enjoy falling levels of total legal spend normalized for revenue.

 

The rigors of matching yourself against international business competitors keep you fitter, as evidenced by legal expenses per unit of revenue, than less-international companies that don’t face that test. If you are big enough to sell overseas, your revenue rises but your total legal costs do not rise as much.  There are many reasons for this correlation (See my post of Dec. 11, 2010: five reasons why globally dispersed US law departments might have lower total legal spending; April 30, 2011: globaloney; and May 6, 2011: tradable and non-tradable sectors with the difference that makes on law departments.).

 

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“[W]hile 50 percent feel that self-service drafting [of contracts and agreements] is important, 76 percent reported that their law departments do not have any kind of self-service drafting tools or protocols in place.”  That summary of a glaring gap between efficiency and reality, the gap between clients being able to take care of some kinds of contracts without burdens on the law department, comes from an article in Met. Corp. Counsel, July/Aug. 2012 at 37.  The article is by Tim Allen, the President of Business Integrity, a leading provider of software optimized for contract management.  Tim.allen@business-integrity.com

In late 2011 Business Integrity conducted a survey and obtained responses from more than 400 in-house lawyers.   Taken at face value, this finding suggests that many in-house lawyers wish they could offer their clients aids to help them prepare at least first drafts of common agreements.  The dearth of such productivity tools makes more work for the legal team because it must spend time to draft and review agreements that are routine, do not require negotiation, or need any custom terms and writing.  As the article puts it, this “manual contracting dilemma” drags down output and morale.  Click here to see the article.  http://www.metrocorpcounsel.com/articles/19657/survey-house-counsel-reveals-potential-law-department-innovation

Contracts are one opportunity for self-service.  Here is an update on client self-service, starting from the first metapost (See my post of May 18, 2008: self service with 7 references; Dec. 23, 2009: Carillion plc and its self-service capabilities; Jan. 7, 2010: Catholic Healthcare West and its use of ContractExpress; March 31, 2010: suggestion to boost self-service by clients; April 14, 2011: Cisco tries to have clients take on contracting services; and Oct. 19, 2011: eight reasons to consider contract automation.).

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As if 25 benchmarks by industry, revenue, and number of lawyers from nearly 500 law departments were not enough, Release 2.0 sent last week offered more.  It included an invitation to a free webinar to ask questions about the benchmarks, five trade groups with industry reports, an analysis of matter management and contract management software, and 49 pages of organized blog posts on statistics.

Release 3.0 will publish in early October and there may well be more than 700 participating law departments from 25 industries in it.  I hope your department takes part.

If you would like to learn from the General Counsel Metrics survey and get Release 3.0 in early October, absolutely free, provide six figures on your 2011 staffing and spending by clicking on this link.
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This blog produces an unending stream of posts.  Periodically I harvest those on a topic.  Metaposts, as I call these collections, include most recently the following.

Arbitration II (See my post of May 30, 2012: arbitrations with 9 references.).

Brazil (See my post of July 9, 2012: Brazil and 11 references.).

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A third of VF’s revenue comes from international sales, according to Corp. Counsel, July 2012 at 38, and five members of its 18-person legal department are stationed outside the United States.”  VF Corp. is the world’s largest apparel and footwear company.  It makes sense that a company that does business and sells shoes everywhere should have the same proportion of its lawyers serving internationally (really, “boots on the ground”).

 

This blog refers often to the geographic scattering of law department offices and the likely trend in this direction (See my post of Jan. 16, 2009: physically decentralized law departments with 13 references.).  The term “footprint” figures notably in these references (See my post of June 20, 2008: geographically dispersed lawyers and a tool to help them reach each other; Jan. 8, 2009: location of in-house counsel will eventually match the global footprint of a company; Dec. 13, 2009: InBev lawyers where the business is; March 2, 2010: 3M and dispersion of its lawyers; Aug. 9, 2011: international footprint of Cargill lawyers; Oct. 19, 2011: management tools needed as law departments disperse; and April 16, 2012: John Deere and its Asian presence.).

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Several posts on this blog have laid out criticisms of various well-known management tools.  This first post of two starts with a half dozen.  For each of the six tools listed below I begin with one or more references to previous posts that give drawbacks of the tool.  I continue with citations to any recent posts regarding the tool published after earlier metaposts.

Brainstorming (See my post of Dec. 31, 2008: criticisms and suggestions; and Jan. 28, 2011: brainstorming replaced by techniques based on neuroscience.).

Delphi process (See my post of Aug. 25, 2009 #3: criticisms of the technique; June 27, 2012: peer pressures as another criticism of the Delphi technique; Dec. 9, 2005: Delphi method (nominal group technique); Feb. 1, 2006 #1: origins of the method; and June 16, 2011: conclusions derived through the Delphi technique.).

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