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In the 2012 supplement to Bob Haig’s massive compilation on law departments, Successful Partnering between Inside and Outside Counsel (West 2012) at 42:18, the authors of a piece on project management mention an idea. An unnamed law firm “combined a timely ‘workload report’ sent by e-mail or fax early each month with a progress report sent two weeks later.”  The workload report describes recent activities, total hours spent on the matter during the prior month, and the staff breakdown of those hours. It also includes a trend line of hours worked and a forecast of the key activities upcoming.

 

The progress report follows by the 20th of each month, and it adds new developments and revises the forecasts. The law firm provides these previews for its insurance company client in addition to normal, monthly invoices.  For massive, long-running engagements, something like these early-warnings can help a law department ride the tiger.

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A lawyer from Littler Mendelson, speaking at the InsideCounsel SuperConference, described the firm’s software to handle administrative agency charges.  The firm developed the system to coordinate EEOC complaints on behalf of a huge employer who wanted to bring down its outside counsel spend.  Built on Contract Express, the innovative system had handled about 4,000 matters.

 

A law department can have the firm handle take over its administrative charges for a flat fee per charge.  Armed with the system, Littler can offer this unit-costing.  From what I heard, this investment in knowledge assembled, software written, and processes streamlined points the way law departments should push their primary firms.

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The larger the business the more global it and its legal department become and thus the greater its need for local in-house counsel.  A commenter on my article about benchmarks and matter-management software wrote, as if it were self-evident, that “global law is more expensive than domestic for a ton of reasons.”  This globalization surcharge, he proposed, explains the larger spend numbers at the high-end companies where matter management is more prevalent, even when those legal costs are normalized against higher global revenue.

But even if lawyers’ hourly rates are high, the total cost of local legal services may be less expensive than in chronically legislated, litigious and lawyered countries.  Internally and externally, the additional revenue may come at a lower legal expense.

Within the department, salaries may be lower for those lawyers based in the country.  As to external costs, one can well suppose that local in-house counsel, familiar with the next-door firms, choose more cost effectively than distant U.S. lawyers.  No high-cost U.S. lawyers who are “international” specialists would have the touch and feel.  They fall back on a familiar U.S. firm with a branch office in the country, and pay the price.  A recent article in Asian Lawyer, Summer 2012, backs this point: in Korea, “international firms are charging 30-50% more than domestic firms.”

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An article in Fortune, May 21, 2012 at 90, describes one application of what it calls the popular “gamification” trend.  This form of software brings in videogame storytelling and interactivity to mundane tasks such as compliance training. Not only are forms of games more interesting to employees, they also allow the employer to collect sophisticated analytics about how often the training is taken and to what effect. The article mentions a company called True Office which has developed a compliance application as “a fast-paced game (usually a painless 20 minutes).”

 

This sounds like a useful area to explore for law departments that need to educate clients about how best to avoid legal problems.  Games could be the spoonful of sugar that helps the medicine go down.

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doeLEGAL supports not only its ASCENT matter management product for legal departments but also its discovery-document processing capabilities.  As to the latter, the company announced late last year that it had passed a Standards for Attestation Engagements 16 (SSAE 16) Type II audit completed during the first nine months of 2011.  According to the press release, SSAE 16 “is the most widely recognized audit of its kind ensuring doeLEGAL’s controls, processes and procedures adhere to industry best practices. The SSAE 16 replaced the SAS70 as the new standard.”  The website for the AICPA explains that the SSAE 16 audit examines “a service organization’s controls and processes.”

Also commendable and noteworthy to this blogger, who tries to keep up with matter management software and installations in law departments, is that doeLEGAL announced last year that it had installed ASCENT at Angelo Gordon, BASF, and Constellation Energy.  If every provider of law department software announced new clients, the law departments of the land would understand better which packages are being selected by which kinds of departments.

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The General Counsel of Kaplan Inc., Janice Block, spoke on a panel at the InsideCounsel SuperConference.  She described a quick-step process by which her legal team selects law firms to handle certain matters.  When an appropriate new matter comes in, they pick six law firms and send them an e-mail with the basic information about the matter.  Kaplan gives the firms 48 hours to respond with their strategic approach, their proposed staffing, and the key tasks they foresee.  She did not mention a budget, but that might also be part of the response.   She also did not say how much the Kaplan legal team knew about the firms beforehand, but I presume they knew enough to entrust any of them with the work.

 

Block added that often they narrow the group down to three and invite those finalists to come in for an interview.  This selection with alacrity makes sense.

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In 2007 Australia’s federal court called into question whether e-mails and documents prepared by in-house lawyers were subject to attorney-client privilege. In response to that threat, Telstra Corporation took a number of actions.  For example, it amended the employment contracts of each of its 150 lawyers “to make it crystal clear that each lawyer’s ethical obligations and duties to court prevailed over our duties to our employer.”  These are the words of Sue Laver, Telstra’s General Counsel, in Canadian Corporate Counsel Association Magazine (Autumn 2010) at 36. They promulgated a corporate policy to spell out that lawyers must give independent advice and prohibited internal clients from requesting a particular legal opinion. Further, Telstra created new compensation arrangements for its lawyers that were no longer tied to the stock performance of the company.

 

Telstra revised its organizational charts to reflect that lawyers act as lawyers – not commercial managers. They changed the titles of lawyers from “managing counsel” to “supervising counsel” to make a clear distinction between legal responsibilities and management responsibilities. All this because of the possibility that attorney-client privilege might not protect activities of internal lawyers.

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A paper written by Jeff Hodge for Bridgeway, Legal Spend Management: An International Perspective, states at page 13 “since invoices in the EU are considered tax documents, the invoice reviewor cannot adjust them. Any adjustment to an invoice must be made using credit (or debit) notes which are then tied to the original invoice.” This adds some considerable complexity for matter management systems as well as for in-house lawyers who review bills.

 

It also imposes a layer of value-less document generation and communication back and forth.

 

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All law departments interview applicants, often devoting hours to them and more time for internal deliberations.  It dismays me, then, to read that “decades of research have suggested that, despite their widespread use, interviews are not very predictive of applicants’ future performance.”  We think we can size people up, ask penetrating questions, and judge their abilities objectively.  We can’t.  Other tools serve us better, but they are less used by law departments: work samples, cognitive ability tests, behavioral interviews, and tests of conscientiousness, for example.

 

This background comes from an article in the Acad. Mgt.  J., April 2012 at 63, which focuses on the frequency with which applicants are not forthright about themselves during interviews.  This blog has offered ideas before on interviewing job seekers (See my post of May 22, 2009: hiring interviews for lawyers with 6 references.).

 

After my initial metapost, I continued commenting on interviews (See my post of Dec. 22, 2009: GC and local management should combine to recruit a local lawyer; Jan. 12, 2010: recruitment costs presumed to include trip for interviews; May 24, 2010: benefits of checking references before interviews; Jan. 17, 2011: six questions you should ask during an interview; and March 6, 2012: superficiality of the interview process.).

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A fascinating article concerns an analysis of causes of action in some 2,500 civil cases filed in Federal courts filed between 2000 and 2008.  The research was by Christina Boyd, et al, in “Building a Taxonomy of Litigation: Clusters of Causes of Action in Federal Complaints”, which is available electronically.  The four authors used a quantitative procedure known as cluster analysis, specifically spectral clustering, to determine from 11,439 causes of action eight primary clusters.    The article nicely explains all the research and draws solid conclusions.

 

From the standpoint of those who manage corporate litigation, this research has much potential.  If there were data for these cases on costs paid by the defendants as well as for durations of the cases, it would help predict case outcomes, case lengths, costs, and forms of resolution.  A law department could analyze its portfolio of pending litigation by cause of action and perhaps determine where proactive research makes sense, knowledge management have more payoff, form documents make a contribution, and choice of law firm.  The authors take mostly a scholarly approach to their work, but they do write (at 26), “the more systematic information that case actors have about their case and how it compares to others, the more able they should be to make strategically wise decisions.”   This is another example of the deep potential for evidence-based management.