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One of my blog posts drew on data from Portugal, USA, UK, and Belgium to estimate very roughly legal departments per billion dollars of GDP at 0.6, 0.7, 0.5, and 1.2 (See my post of May 10, 2010: four countries and GDP.). If we take as the lodestar the low end of 0.5, that says for every two billion dollars of Gross Domestic Product we might expect one law department. That touchstone seems very low, in that in several developed countries, figures like one internal lawyer for every $250 to $400 million (2-4 lawyers per billion of revenue) is typical, but GDP doesn’t arise only from corporations. In fact, about two out of every three GDP dollars comes from consumers (See my post of July 19, 2011: article on legal industry.).

Anyway, in Joseph Mazur, What’s Luck Got to Do with It? – The history, mathematics, and psychology of the gambler’s illusion (Princeton 2010) at 70, Mazur write that “the estimated value of the GDP of the whole world in 2008 was $54.3 trillion.” If we take 55 thousand billions as an updated estimate, and apply half a law department per billion, that suggests 25,000 law departments worldwide. It is quite certain there are two or three times more, so this string of conjectures has run out.

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An article in Compliance, Winter 2012 at 14, explains some of the amendments to the 2010 Organizational Guidelines by the U.S. Sentencing Commission. According to the authors, “compliance programs should include a reporting line between the corporate compliance officer and the board of directors or subcommittee, as well as reports from the compliance officer to the board or a board committee at least annually.” Publicly traded companies must publish their codes of conduct and the authors found that about 10 percent of the Fortune 500 companies say something about the reporting line of compliance.

The article left me with the impression that the authors favor compliance reporting to the general counsel. “To avoid the dreaded silo mentality and build from the legal department’s expertise and resources, some companies have adopted a structure in which the compliance officer reports to the general counsel and is part of the legal department.” They close by saying that regardless of reporting lines, the chief compliance officer should communicate directly with the board at least annually.

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To the extent lawyers are based outside the country of a law department’s main group of lawyers, an awkward circumlocution for “internationally-based” lawyers, general counsel have a harder time knowing what to pay them. Data from local markets is much harder to find.

Several posts in the past few years have brought to the fore scattered data about compensation of in-house lawyers outside the United States. These posts might help in the quest (See my post of Jan. 5, 2011: salaries of Brazilian and Latin American senior lawyers of multinationals; July 11, 2011: compensation data for Canadian in-house lawyers; July 12, 2011: ranges of salaries for Canadian in-house lawyers; July 18, 2011: pay of Canadian general counsel by level; July 8, 2010 #2: benchmark data from Rees Morrison and Laurence Simons study; Feb. 5, 2009 #2: low salaries for Indian law graduates; June 13, 2009: in-house salaries in Japan; July 19, 2009 #3: high salaries of ex-pats; Jan. 7, 2009: US and UK compensation differentials for top in-house lawyer; and Jan. 8, 2009: UK in-house counsel stay put so their salaries stagnate.).

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What are some of the beliefs most lawyers in the United States take for granted, rarely consider or even notice, regarding corporate law departments? We are all blind to our own habituated views that we do not observe, to say nothing of articulating or even less questioning, what is “the way it is” or question the formative assumptions that guide our actions and thoughts. Some of those views missing in plain sight might be the following:

  1. Litigation in court is the highest embodiment of legal representation.

  2. Partners in law firms stand at the top of the law practice ladder, not in-house lawyers.

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My supposition, before I began General Counsel Metrics and its global benchmark survey, was that most general counsel would want comparative metrics on staffing and spending in the months just before their budget was due. I thought of that as August and September, mostly. In fact, I have come to learn, participation was highest in the spring.

One reason for the lack of seasonality is that corporate fiscal years are not all calendar nor are budgeting cycles so synchronized. The impetus to find benchmark metrics might be a question from the Board of Directors. It might be the invasion of consultants group hired to slash G&A overhead or perhaps the trigger is an objective a general counsel agreed to with the CEO. Sometimes general counsel want benchmarks to support a management or structure change. A few like to set a context at an all-lawyer’s conference or a planning session. For all these reasons, benchmark metrics are in fashion all year long.

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If a general counsel or other manager in a law department sets out to accomplish a specific goal in a set period of time, that is an initiative, also referred to as a project (See my post of Jan. 7, 2010: examples include to license a new software system, change the mentoring program, set up a pro bono program.). It is a formal, recognized and perhaps even named management effort with boundaries of resources and objectives.

A process, by contrast, is a set of activities that goes on, often unannounced, unnoted and unnamed, like tracking time or distributing board books. People do it over and over and often don’t consciously think about the steps, let alone how to improve them. There is a process to make reservations in the conference room and a process to call the help desk when your monitor goes blank. Processes in law departments are everywhere, perhaps hundreds of them. Processes have component steps and they do have some variability, but unlike projects, mostly ad hoc and novel with a team designated for each, a process is to varying degrees standardized and familiar and no one may be really in charge or accountable.

Just as processes have associated tools, a body of knowledge, such as process maps and guidelins, so too do management projects. Books are written about project management, classes and consultants stand at ready, and there are tools galore, such as GANTT charts.

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At 3M, the law department of 92 lawyers has a mentoring program for newcomers. “All new legal employees are assigned a mentor to provide specific advice on work and networking, as well as encouragement to help ensure retention.” This quote comes from Diversity & The Bar, Nov./Dec. 2011 at 37.

Typically mentoring programs aim at minority counsel (See my post of Aug. 12, 2008: General Motors and pairing of in-house lawyers with minority lawyers outside; Dec. 11, 2008: Pfizer and its diversity team include mentoring; March 11, 2009: US Postal Service and its mentoring program; May 13, 2009: Exelon’s mentoring committee and use of Mentium by Ford Motor Credit; July 19, 2010: strive for transparency regarding the mentoring program; Oct. 18, 2010: GCs can mentor; Nov. 27, 2010: diverse lawyers at your department “mentor” a minority lawyer at a law firm; Jan. 24, 2011: Morgan Stanley provides mentors for diverse attorneys; and May 25, 2011: general counsel should seek out a mentor outside the company.). Still, as demonstrated by 3M, they have broader reach beyond support for diversity lawyers.

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An ad in Diversity & The Bar promotes a highly specialized database that can tell a general counsel how much the law department pays in fees to diverse lawyers. I took a look at the website and could not find out more than the ad explains. The ad mentions that TrakItPro “imports data from existing billing systems.” This is an interesting idea, with application beyond diversity: siphon off some data from a department’s matter management system, combine it with other data, and produce specialized reports and insights of more value.

The company that offers TrakItPro, FHGmedia Enterprises, appears to be a very principled, small and new organization intent on advancing the prospects of minority lawyers.

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Wherever there are metrics for managers of law departments, there will be discontent. Someone looks bad if performances or results are compared to others’ and the natural reaction is to discredit the unfavorable numbers.

My column for InsideCounsel, Morrison on Metrics, earlier this month draws on my consulting experience where at times I have to explain and defend and justify unflattering metrics. Click here for my column on six questions to answer if the numbers leave you looking bad.

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  1. Collective action (See my post of Dec. 19, 2011: collective actions by law departments with 6 references and 1 meta.).

  2. Compliance reports to legal (See my post of Dec. 31, 2011: compliance reporting to GC with 5 references and 2.).

  3. Contract complexity (See my post of Dec. 22, 2011: complexity of contracts with 6 references.).

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