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The veteran consultant Richard Stock wrote a column for the Canadian Corporate Counsel Association’s quarterly, Leading Corporate Counsel, Fall 2010. Summarizing some of the action tips put forth in a metrics study, the ACLA-CLANZ Legal Department Benchmarking Report, Stock cited one on alignment.

“Rotate lawyers’ alignment away from half of their business units every three years for coverage and effectiveness.” I think this means that lawyers who support a commercial group should do so for three years, no more, and then be reassigned to support a different group. The logic might be to deepen the experience of commercial lawyers and to avoid their “going native” (See my post of Feb. 19, 2006: in-house lawyers risk “going native” compared to “independent” outside counsel.).

Others, quite possibly, would disagree with this advice. They want their commercial lawyers to immerse themselves in the legal issues of the business units they support and they would not want to arbitrarily yank them out of that accumulated trust, familiarity, and strategic knowledge.

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Almost 900 in-house counsel from 10 countries responded to a survey published as Deloitte’s Global Corporate Counsel Report 2011. Five years ago, a similar survey found that the top three choices for ways the legal team demonstrates value were “timely resolution of legal problems,” “achieving best legal outcomes,” and “reducing legal risk.” In last year’s survey, the top three ways were timely resolution, reducing legal risk, and “achieving cost-effective resolution of legal problems.” The remaining two were “reducing external legal expenditure” and “building internal legal expertise of organization.”

Note that the respondents were choosing from a list and were voicing how they felt they were adding value. What clients might feel about the value proposition was not addressed. The question could have been “How do you think your clients would rank the following choices.”

The choices given on the survey did not include something like “helping the business achieve its goals.” The orientation toward “problem resolution suggests litigation presents the optimal role for law departments, but in my view it is commercial support that creates the most value.

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Deloitte’s Global Corporate Counsel Report 2011 presents data from almost 900 in-house counsel in 10 countries. Only 49 were from the United States. Of that subset, 86% are a member of the company’s senior management team (at 6). Evidently a much lower percentage holds for counsel outside the U.S., since the figure for the entire survey population – increased some by the U.S. figures – was 62%. Hence, the top lawyers of non-U.S. companies for the most part don’t occupy the rank of their American counterparts.

That said, 13% of the total respondents are members of their company’s board of directors, whereas only one of the U.S. corporate counsel is (2%). An earlier survey, drawing mostly on general counsel in Europe, found otherwise (See my post of May 14, 2006 #4: in Canada, one fourth of general counsel sit on Board; Nov. 9, 2006: percentage of Board member GCs was dropping in Europe; Dec. 12, 2007: more than half of UK general counsel want to be a board member; and Aug. 6, 2008: non-US general counsel often do not attend any Board of Directors meetings.). Every now and then this blog has mentioned general counsel in relation to Boards of Directors (See my post of Feb. 7, 2006: “general counsel should report to the board of directors”; March 25, 2009: general counsel of McDonald’s sits on the board of directors of Aon Corporation; May 11, 2011: doubts about general counsel serving on another company’s Board; Sept. 5, 2011: four benefits when a general counsel serves on the board of another company; and Nov. 3, 2011: reporting line to the board gives the general counsel more independence.).

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Matter management and e-billing systems come with built-in reports, sometimes called “canned reports.” They and the more sophisticated capabilities of report writers can tell users quite a bit. For example, they can show the law firms paid the most during a specific period of time.

A dashboard advances data analysis to another level because it collects on one screen key metrics that a user wants to track. As an example of a legal spend dashboard, doeLEGAL provides one on their website. Like it, a dashboard might report total fees paid year to date, plus the number of new matters opened, plus the average elapsed open time of certain cases.

Data analysis goes further than reports and dashboards. It strives to correlate more than two metrics with each other. An example might be the size of law firms and their effective billing rates. Another might link numbers of timekeepers to monthly burn rates or settlements paid to external fees.

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Three Canadian firms that provide lawyers to law departments for project work when needed are noted in the Canadian Corporate Counsel Association’s magazine (Autumn 2010) at 36. They are Cognition LLP, Delegatus Legal Services, and LexLocom. Cognition, the article notes, is five years old and has 24 lawyers. Delegatus, also five years old, has 15 lawyers.

It makes sense for general counsel to plug in a qualified lawyer for short or long stints if they can thereby put off a permanent hire and yet reduce outside counsel fees (See my post of Dec. 9, 2008: refers to GCA Law Partners (Mountain View, CA), FSB Corporate Counsel (Atlanta), Axiom (NY), Phillips & Reiter (Houston), and Paragon Legal (San Francisco); April 20, 2009: Yahoo’s shift from law firms to temp lawyers; and July 12, 2011: Paragon Legal with 60 lawyers available.).

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The New York Times, May 1, 2012 at B3, ran a piece on litigation financing. It mentions BlackRobe Capital, Fulbrook Management, and Bentham Capital, all of which investment funds started in 2011. BlackRobe’s founder is John Coffey, formerly a litigation partner at Bernstein Litowitz. Further, the litigation finance team at Credit Suisse, one of the pioneers in the field, split off to form Parabellum Capital. As a side note from an online site, “parabellum” means “a type of semiautomatic pistol or machine-gun; also called Luger”.

The funds under management by two of the largest players, Burford Capital and Juridica Capital Management, have reached nearly a half billion dollars ($300 million and about $200 million, respectively.). The article rehearses the arguments against investments by third parties in litigation and the arguments in favor: it lets companies invest in an asset, a legal claim.

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Five years ago a large-scale survey of in-house attorneys tracked how those attorneys said they received legal advice from outside lawyers. They had five choices and were asked to select the two most common methods. Recently, Deloitte revisited that question in a similarly large survey and found a marked swing.

The first time, “legal and other advice was most often set out in formal written reports” 66% of the time. In today’s faster paced world, formal reports plummeted to 20%. Almost reversing those figures is “advice set out in an email” where the method was chosen five years ago by 23% of the respondents but soared last year to 76%. “Verbal advice over the phone” stayed constant (48% five years ago and 51% last year).

To round out the picture, Deloitte’s Global Corporate Counsel Report 2011 at 22, found that “verbal advice in a conference” slumped from 30% selected to 22% and “presentation style advice” held steady at 17% and 15%. In short, law firm lawyers shouldn’t write memos unless asked to specifically. Rather, make the default a concise e-mail.

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Private equity firms invest in the legal cottage industry. This is a good thing for general counsel, because those firm inject capital and management experience, but it’s bad if potential acquires take their eye off the ball, if investments lead to turmoil, or if private equity acquirers fail to maintain experienced employees and quality service. On balance, it seems to me, new ownership and capital leads to improvement.

I have collected a few examples of investments by private-equity firms in law department services. Beacon Equity Partners owns Exari after an investment in 2008. The same website mentions its investment in Anaqua, a patent management company, and a press release from 2010 describes Anaqua merging with SGA2.

Another example is the recent purchase of Mitratech (See my post of Nov. 1, 2011: Vista Equity Partners acquires matter management firm.). A bit later Cinven bought into CPA Global, a company in the IP and offshoring space (See my post of Feb. 9, 2012: Cinven acquired CPA Global.). Project Leadership Associates (PLA) was also acquired by an investment group (See my post of Feb. 9, 2012 #2: two private equity investments mentioned.).

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If Rand Corporation says something about data, you have to give it much due. They are careful and they understand the difference between bits and pieces of numbers and reliable data. So, attend to this caveat: “Descriptive data on the use of contract attorneys and outsourced legal talent are even scarcer than data on alternative fee arrangements,” Rand’s researchers conclude in “An Early Assessment of the Civil Justice System after the Financial Crisis” (Rand 2012) at 35.

Benchmark surveys ask about numbers of legal staff, by all means, but they include contract workers only as a cost in the internal budget. Even if they are long-term and integral to the legal department’s capabilities, those workers aren’t separately numbered.

Absent reliable data, people who proclaim a “trend” toward more temps and contract attorneys base their claims on anecdotes or on what they believe should be happening, or wish were happening.

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Most law departments are asked to review a steady stream of marketing material such as ads, packaging, catalogues, press releases, and web sites – anything making an assertion to the public in theory deserves a legal look over: “Can we say it” and “Do we have sufficient support?”

To cope and to maintain some consistent standards, some legal departments work with their marketing counterparts to develop and agree to a “claims matrix” of approved wording for the range of claims and outlets.

Software can help track claims as well as what information goes toward regulatory compliance (agency markings like those of Underwriters Lab, power ratings, and requirements of agencies or quasi-agencies like environmental groups), marketing, consumer care, etc. One law department uses software called Windchill to help with management of market-oriented claims.