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Results from the tenth annual ACC/Serengeti survey on managing outside counsel give some insight into the incidence of three kinds of software that helps collect spend data about outside counsel. According to the ACC Docket summary, Sept. 2011 at 18, of the responding “hundreds of ACC member law departments,” 64.6 percent work with internal spreadsheets and databases, 41.6 percent use web-based systems for matter management and electronic billing, and 15.2 percent use internal matter management system software.

The percentages add up to more than 100 perhaps because some respondents employ more than one system. Remember, also, that many ACC member departments are one- or two-lawyer shops, so a spreadsheet or Access database (or nothing at all) may suffice. What would be more useful would be a breakdown among these three solutions according to size of law department.

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Andrea Bonime-Blanc oversees internal audit, enterprise risk management, ethics, corporate responsibility and compliance for Verint Systems, a global software company. She reports to the Chairman of the Audit Committee and indirectly to the Chief Legal Officer. In a recent BNA Insights article (Corporate Governance Reports) she gives four reasons why such a role should report to legal. This topic stretches far beyond the meager confines of a blog post, so I will simply annotate a comment or two.

  1. “The complexity of modern compliance legislation and regulation requires legal expertise and therefore belongs in the legal department.” True as far as it goes, but what percentage of compliance depends on interpretation of laws and regulations?

  2. “The GC is in a better position to coordinate disclosure and regulatory contact.” This ought to depend on whether the information provide and interaction requires legal background or administrative, process skills.

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Less than four years ago, Pernod Ricard created six dedicated hubs of intellectual property lawyers and paralegals specialized by different categories of alcoholic beverages. About 30 of them work in these hubs, which are usually located near the production facilities. All this is spelled out in the Leaders League 2010 Intelligence Report at 72.

This arrangement is analogous to a business unit orientation for a law department but carried out for specialty area of law and expressed geographically. It will confront the inevitable issues of silos, consistency, and competition for resources, but no structure is perfect.

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Selection of a matter management system seems daunting; configuring or customizing the one you chose, installing it, converting historical data to it, and then training staff on its functions and the changes it requires in processes seems even more intimidating. Even then you have to keep it running and bringing value. This raises operational issues (See my post of June 28, 2009: four applications for tracking and managing matters in one law department; Sept. 22, 2009: Belgian Post’s litigation management program; March 29, 2010: four technology observations based on speaker’s bio; Sept. 12, 2010: my plan to blog about sales to named legal departments; and April 12, 2011: Rockwell Automation’s matter management experience.).

It never ends, the care and feeding of a matter management system (See my post of March 19, 2008: metrics presume effective policies and disciplined procedures; July 5, 2010: programming burdens and multiplicity of packages; Oct. 22, 2010: percentage of law firm fees billed other than on an hourly basis; April 3, 2011: ratios of legal spend to the costs of two kinds of software that track it; June 1, 2010: difficulties with replacement of a matter management system; July 28, 2010: four levels of support for users of software in a legal department; April 22, 2011: security and access by law firms to matter management systems; and June 2, 2011: tune-up your system rather than replace it.).

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An item in Bloomberg Bus. Week, Sept. 26, 2011 at 81, points out that there are two aspects of concentrating. “One is to get rid of extraneous thoughts, the other is to focus on the task at hand.” Fine, but how do you clear your mind of distractions? Recent research suggests two ways: dwell on the undesired thoughts for a short, fixed time and then buckle down or postpone the unwanted thoughts until a specific time. Both seem to mollify the tug for some people. For me, quiet is the key as well as sitting in a familiar spot for thinking – my desk.

You can improve your focus by keeping glucose levels normal and not making decision after decision (which depletes mental energy). Adequate sleep, health and food create the best conditions for concentration. Also, you can practice keeping your mind on a topic such as by mental exercises. My trick when writing and trying to think of one more argument or point is to stop, then say to myself: “Rees, think of one more thing.” It works (usually).

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During late 2009 and much of 2010, U.K. heads of legal showed significant appetite to use more “mid-tier firms” in that country as well as more “international firms.” This shift in reliance for outsourced legal work appears graphically in a Winmark survey of CLO Programme membership (at 13). It is based on data obtained in the Autumn of 2010 from 124 UK general counsel. You can request the report from John Jeffcock.

Thirty percent of the respondents indicated they had increased their use of “UK Mid-Tier Firms” and 25 percent had done so with International Firms. The greater use of those two tranches of firms came at the expense of Silver Circle and Magic Circle firms. (I learned from the omniscient Wikipedia that the six Silver Circle firms are deemed to be Ashurst, Berwin Leighton Paisner, Herbert Smith, Macfarlanes, SJ Berwin and Travers Smith.) This data supports my point that if you really want to change your costs, change your firms.

A final note, 12 percent of the respondents stated that they had increased the amount of work outsourced to LPO providers. This movement will likely continue.

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A recent survey asked general counsel of UK companies how well their law department is valued by their company. One choice, the most favorable, was “The legal department is recognised as a valuable part of the organization.” Of the 124 respondents, 29 percent strongly agreed and 60 percent agreed; only 8 percent disagreed and 3 percent strongly disagreed. For three other statements, the percentages were favorable but dropped off. One was about the department as “strategic partner,” one about the department being “as integrated as I would like with other parts of the organization,” and one about prompt engagement of the department by clients.

The point I want to make is that only clients can say whether the legal department is perceived as a valued group. Heads of legal can’t possibly be objective. All of us over-rate our value or our team’s value.

If the question had been “Do you think clients throughout the organization [not just senior executives who get red-carpet service] would recognize the legal department as valuable” you might move a little closer to the truth.

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Winmark, through its CLO Programme members, obtained survey data in the Autumn of 2010 from 124 UK general counsel. The 27-page report can be requested from John Jeffcock.

Here is the report’s summary of what happened to those departments overall in the financial meltdown. “Like in 2009, 2010 saw a continued increase (1% in 2009 to 3% in 2010) in the size of in-house teams whilst budgets remained flat (3.2% fall in 2009 to 0.1% increase in 2010).” This data from the United Kingdom closely tracks what the General Counsel Metrics benchmark survey found for U.S. law departments (See my post of Sept. 28, 2011: sky did not fall on U.S. departments.). U.S. departments increased their staff a bit and saw their budgets hold up, albeit they remained flat.

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Based on longitudinal data from a large group of U.S. law departments, it appears that the economic recession did not have all that much impact on them. My most recent article for the National Law Journal, published on Sept. 12, 2011, discusses the two-year changes and notes the slight increase in headcount and the flat – not at all demolished – budgets of more than 120 departments. Click here to register and download the article.

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Corporate Legal Solutions, Inc. was founded in 1988 by three attorneys to provide matter management software geared toward corporate legal departments. From its history on the company’s website, the first product, Legal Management System, was DOS-based. It shaped the basic principles of design for what became Case&Point.

Case&Point was introduced in 1995 to take advantage of the Windows user interface. Corporate Legal Solutions states that it orients itself around service, not a ‘shrink-wrapped’ product. Accordingly, over half of its users have a custom system designed to fit their individual needs. Supported from its headquarters near the Dallas/Fort Worth airport, the company states that Case&Point is now in use at well over 250 companies worldwide.