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The 2012 General Counsel Metrics benchmark survey has staffing and spending data so far from more than 80 law departments at hospital and health systems.  A friend of mine told me that the “Joint Commission” that accredits U.S. hospitals recognized 5,754 of them in early 2012.  Their total expenses were $750 billion, and he explained that generally speaking the revenue of a hospital equals its expenses.  If so, those accredited hospitals averaged about $130 million in revenue.

 

Release 1.0 of this year’s GC Metrics survey (sent in June to participants) shows that the median for 68 health systems was 5.0 lawyers for every billion dollars of revenue.  If that ratio holds for the total revenue of the accredited hospital systems, that would mean 3,750 in-house counsel (750*5).   And, one more speculation: if we assume on average 3 lawyers per department, that suggests on the order of 1,250 health system law departments in the United States.

 

If you would like to participate, absolutely free, in the GC Metrics law department benchmark survey and get Release 2.0 in early August, provide the six data figures on staffing and spending by clicking on this secure survey link.

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At the recent InsideCounsel SuperConference, the legal search firm of McCormack Schreiber distributed its In-House Counsel Salary Survey.  The firm had gathered self-reported salaries for 2010 through 2012 from 163 in-house attorneys.  Based on the scattergram they created and a linear regression equation, they produced a formula.

 

What the report refers to as “Total Compensation” means salary plus bonus, but excludes the value of any equity awards. Total Compensation equals $140,000 plus 7.23 times the number of years since the lawyer graduated from law school (“Y=140 + 7.23x”).  If you have been out of law school ten years, that would add about $72,000 to the base of $140,000, as an example.  The executive search firm is based in Chicago and its compensation data may have come mostly from lawyers in that region, so I suppose you could adjust this formula’s base amount for your city’s relative cost of living.

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Posted in: Talent
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Kraig Washburn, the General Counsel of Flexera, spoke at the recent InsideCounsel SuperConference about his department’s use of Salesforce software.  His department has about four lawyers and four other staff.  In 2011, they handled about 4,000 requests for assistance, among which were about 700 negotiated software agreements.

 

Currently, with Salesforce, reps in the field fill in the key terms for a prospective contract and the software routes that information to the law department.  In so doing, it serves as a request for legal services, the start of a document assembly process, and a contract management repository.  Washburn also characterized the software as a knowledge management tool.  For example they can generate NDA’s very quickly and are putting in a capability for licensing agreements.  The Salesforce software thus overlaps with some of the functions of a matter management system and some of the functions of a contract management system.

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A point made at the InsideCounsel SuperConference by Kraig Washburn, the General Counsel of Flexera, is sound.  He includes in his corporate headcount one or two contract lawyers who have been working for him for a long time.  They do not get benefits, it is true, but it gives a more accurate picture of the law department to count them as employed lawyers.

 

Otherwise, benchmark ratios such as lawyers per unit of revenue or outside counsel spend per lawyer, or paralegals per lawyer will be distorted.  Even more, the legal function mis-represents itself within the company.

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Continuing my series on the pitfalls of popular management tools, I offer some for process maps (See my post of Aug. 28, 2005: some criticisms; Aug. 6, 2010: components of process improvement; Sept. 22, 2010: compared to procedure guides; Nov. 19, 2010: contrary to a Romantic view of management; March 14, 2011: can lead observers to feel legal practice is too rote; May 31, 2011: EBay and process maps by procurement; and June 9, 2011: one Six Sigma tools.).

Pick trivial processes that no one really cares about or will make no material difference to the effectiveness of the law department.

Ladle on lots of description, but no prescription.  Spend hours saying what happens but not even minutes suggesting what should happen differently and better.

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Posted in: Tools
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Intriguing and intuitively attractive, scenario planning has a buzz about it.  This blog has several posts that refer to it, but as yet I have not challenged the technique (See my post of Aug. 25, 2009: uses of scenarios in legal departments with 18 references; March 1, 2010: elaborate scenarios at Microsoft; Aug. 15, 2011: scenarios as training tools; and Dec. 1, 2011: base rate neglect when we think about scenarios.).  Here are some of my doubts.

  1. Little empirical evidence exists that compares the vaunted method to other methods of strategic planning.  We always read about Royal Dutch Shell, but not much else.
  2. Participants may not be able to think creatively, out of the box.  They are much more likely to extrapolate from the present but in a world full of unanticipated interactions, straight-line projections often go awry.
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Posted in: Tools
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A speaker at the recent InsideCounsel SuperConference offered a good suggestion for general counsel – indeed, for all lawyers who manage others – who want to develop and energize the lawyers beneath them.  Ed Ryan, the veteran general counsel of Marriott International, urged people to let someone else in the law department deliver good news.

 

The general counsel or senior lawyer in the reporting chain can deliver bad news, and wear more armor to take the flak.  Junior lawyers should be given the opportunity to tell the executive team about a successful case or transaction. It creates exposure both ways, it shows the depth of the law department’s talent pool, it spreads glory away from the general counsel, and it is great for morale.

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Posted in: Talent
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In my consulting projects, I am not a fan of focus groups.  Here are some of my concerns about them.

  1. They waste many people’s time.  Members sit for stretches of time and have little to contribute.  The moments of value to others sometimes represent a small portion of their blocks of time.
  2. They do not make candid, full comments.  People do not want to bring up sensitive topics or appear critical of others.  Subordinates lapse into silence.  Members may not say what they think nearly as openly as when they are in a confidential, one-on-one interview or on an anonymous survey.
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Posted in: Tools
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It’s a cliché: delegate as much as you can.  The prerequisites for effective delegation, often unstated, are that there is someone to whom you can delegate and who is competent, less expensive, and has time to do the work well.

Stated in the negative, at least five reservations hold delegators back: control, risk, job security and ego, quality of the delegee, and severability of the work

  1. We all feel more in control of a task or responsibility if we do it.  Entrusting someone else when any blame will come back to you is fretful step.
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A speaker at the recent InsideCounsel SuperConference made a point about budgets from law firms. He said that if the expense for that law firm is charged back to a business unit, it is even more important to get the budget right. If the law department pays for law firm’s services and it goes over, the department can make some adjustments and “take the hit.”

 

I favor chargebacks to clients but this dynamic could lead from both sides to higher budgets submitted by the law firms.  If neither the law department counsel who review bills and stand behind budget estimates nor the outside counsel want irate business clients, they will slip toward building in some padding.