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As companies do business in increasing numbers of countries, it follows that they will need to hire law firms in some of them. Convergence of firms – the deliberate use of dramatically fewer law firms – must then give way to de-convergence – a larger roster of firms retained. Likewise, if legal complexity has increased, which presents another consequence of globalization, it likely brings with it a need for more specialties and thus firms – another blow to convergence.

The shift upwards in absolute numbers of law firms retained does not necessarily entail a reduction in concentration of spend. A law department might well spend three out of every four of its dollars on outside counsel with the handful of firms it pays the most. It could retain dozens of additional firms and not shift that proportion. In the jargon of statistics, the tail grows longer as you de-converge, but the focus on a few key firms can stay just as strong (See my post of Nov. 20, 2006: linear relationship between number of firms retained and size of law department.).

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In 1998, while a partner at Altman & Weil consulting to law departments as I have done for the years since, I wrote an article about ten 1999 resolutions for general counsel. Now, 14 years later, have those resolutions been acted on and come to pass?

No, since the first four still apply to many general counsel and their law departments.

  1. Experiment with Non-Hourly Billing.
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The NY Times, Jan. 1, 2012 at BU7, gave unemployment rates by level of academic achievement. The rate started at 13.2 percent for those with no high school diploma, dropped to 8.8 percent for those with only a high school diploma, and dropped almost a further half to 4.4 percent for those with a college degree. If you take those three jobless rates, you could extrapolate to 2 percent or less for graduates of law school and perhaps even slightly lower for those who passed the bar and at some time held an in-house position. Perhaps.

Economists refer to a base rate of unemployment that is ever present simply because of job changes due to spousal moves, mergers, and other reasons. Could the unemployment rate of lawyers who have practiced in a company be as low as one or two percent?

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Posted in: Talent
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Last year around this time, Dec. 14th to be exact, I published post number 6,000. This post is the one-thousandth post after that one.

After 7,000 of these little critters, as always I fret the well will run dry; so far, however, the aquifer of law department management topics remains high. The blogable ideas just keep on flowing, like the Biblical widow’s cruse. Nor has the pace of metaposts slowed. It does seem, however, that I am not getting more blogs or websites referring readers here. Twitter accounts for an increasing number of my visitors.

I did a few new things during the last thousand posts. My series on Cottage Industrialists began and has had six segments. My first QR (Quick Response) code appeared and for the first time I offered readers a chance to download a file after they had registered through ShareFile. Also new was not the annual summary of the ten best posts per month but a comparison of them to those of the year before.

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Writing in the ACC Docket, Nov. 2011 at 72, an author stresses the conflicts of interest a general counsel might have to face as she balances attorney-client privilege (in her lawyer role) against disclosure and full cooperation with government authorities (in her compliance role). She also argues that lawyers intimidate employees, usually unintentionally, and that discourages compliance reporting. Nor are attorneys throughout the company, visible and accessible, as seasoned compliance professionals circulate. Compliance is a “program” that needs management over a period of time, not what most lawyers want to be involved with or have the skills to carry out. For these reasons, the author argues for separate positions and against the chief compliance officer reporting to (or being) the chief legal officer.

Whether a general counsel can also function effectively as a company’s chief compliance officer has kept the heat on the contentious debate (See my post of Jan. 20, 2009: reporting lines of compliance function with 11 references; and July 23, 2010: compliance and ethics with 24 references and 2 metaposts.).

Since my last metapost, there have been more contributions to the debate (See my post of Jan. 12, 2011: Harrah’s GC combines the roles; Jan. 14, 2011: Ben Heineman view and rejoinder; Feb. 2, 2011: survey data on joint reporting lines; May 16, 2011: survey data on GCs as head of compliance; and Oct. 3, 2011: arguments for and against the dual report.).

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Don’t worry if you don’t understand the header, I’ll translate. When I notice a potential accumulation, I collect six or more posts on a topic into what I call “metaposts,” of which there are now more than 500. Every now and then at least six metaposts cluster around a topic and when assembled I call them hyper-posts.

Reflexively, as loyal readers would appreciate, I decided to see how many hyper-posts this blog has generated since the first one in the fall of 2008. Astonishingly, there have been at least 19 hyperposts.

Billing (See my post of Jan. 2, 2009: 8 metaposts.).

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At a recent conference run by ALM, the general counsel of Rockwell Collins spoke about Six Sigma principles applied in his department. One of his slides addressed processes to determine alternative fee arrangements, and it mentioned “design decision-trees for process.”

Whenever a law department does some set of steps repeatedly – a process – it can take the time to look at who has to make decisions regarding what happens during the process and when. Once those points are identified it is not much more to create a decision-tree that embodies what has been learned. The diligent law department can even annotate the decision-tree with its accumulated experience (See my post of June 17, 2009: decision tree software with 6 references.)

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Posted in: Thinking
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These are the eight metaposts I have compiled since my last hyper-post on intellectual property (See my post of Aug. 19, 2009 #3: six metaposts on intellectual property.). The latest topics include:

Patent trolls (See my post of March 22, 2010: non-practicing entities with 6 references.).

Patent license agreements (See my post of April 29, 2011: licensing patents with 9 references.).

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Lee Cheng, the general counsel of Newegg, spoke at the most recent Consero Corporate Counsel Forum. His portion of a panel covered relations with external counsel, including cost management. One bullet on his slides advised that “an excellent reason to terminate a relationship [is] when cost of outside counsel is the primary settlement driver.” Cheng’s sub-points were two: (1) “Very common if using large law firm in any dispute with settlement value <$500K, which a big firm can easily run up in 1-2 months. and (2) “Excessive legal cost should not be the primary reason to settle.”

Not having heard Cheng’s remarks, I can still see the wisdom of his slide material. It is a backhanded swipe at large law firms, whose costs mount very quickly even when defending a lawsuit that could be settled for an amount less than their fees. As to Cheng’s second point, settlement should be decided on in terms of possible damages (to be obtained or paid) or effects on ongoing business relations or publicity or factors other than the fees of legal professionals.

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LawDepartmentManagementBlog is pleased to publish the submission of Phil Homburger, the founder and CEO of Synaptec Software, creator of the law department matter management system, LawBase. phil@lawbase.com

“We started programming LawBase in 1979. It became an actual product in 1981. We began before the IBM PC was announced and before any of the current tools were available. There was no affordable commercial database so we created our own. The first system LawBase ran on had a 23MB (yes, megabyte) hard drive that was 8 inches in diameter, weighed 40 pounds and was definitely bigger than a breadbox.”

“LawBase has over 1,000 users in law departments in companies as varied as hospitals, multi-national banks, restaurant holding companies, media companies and mortgage banks.”

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