We take for granted that fundamental terms in benchmark surveys and reports have clear meanings understood and applied by all. Lord, what fools these mortals be!
Setting aside statistical terms, below are 12 that deserve careful definition by surveyors and scrupulous adherence by respondents so that benchmark metrics may be most useful. A number of posts on this blog have tried to clarify several of these terms.
“82 per cent of respondents [to the survey referenced below] indicated that their organisation’s disputes are resolved by negotiated settlement. Five years ago this figure was 74 percent.” The quote comes from The In-House Perspective, April 2011 at 13, which cites Deloitte & Touche’s “Forensic Corporate Counsel Survey 2010: do today’s corporate counsels hold all the cards?”
How did those who responded have those figures at hand? Presumably Deloitte asked a similar question five years ago rather than asking respondents to guess at the earlier figure. Since fewer than five percent of all lawsuits in the United States go to trial, why is the figure not nearer 95 per cent? Does the term “disputes” cover more than civil litigation? Are there settlements that are not negotiated? What accounts for the increase of 10 percent in the proportion of negotiated disputes? In short, does this quote convince us of anything?
Every now and then I run across another association of law firms eager to help law departments in a region, a specialty area of law, or globally (See my post of Feb. 21, 2008 #2: law-firm networks with 7 references; and April 14, 2010: associations with 7 references.). First Law International (FLI) recently came to my attention. Its website says that “over the course of 10 years, FLI has expanded worldwide at a very robust pace in over 50 countries, and growing (expected 45 by summer 2011).
“FLI NET™ Member firms currently employ more than 4000 lawyers in over 60 of the world’s most thriving economic centers.” Consider yourself informed!
Several times in the past I have pointed out the swarm of vendors and service providers who market to legal departments. They make up the cottage industry.
In the past year or so, several more posts provide information about more denizens of the cottage. Most concern those who license, implement and support specialized software (See my post of Dec. 27, 2010: seventeen applications commonly used by law departments; Jan. 17, 2011: a patent document management system, First to File; Jan. 23, 2011: patent databases, mapping and classification; April 22, 2011: software for corporate governance, corporate secretarial, and publicly-traded functions; June 15, 2011: software to help handle contracts; and July 11, 2011: five specialized packages for law departments.).
Others posts delve into service providers (See my post of April 6, 2011: ranked list of top-ten trademark services providers; Feb. 15, 2011: mostly small vendors in the legal cottage industry, so rewards and risks increase for general counsel; and Feb. 25, 2008: service providers for bill and regulation tracking.).
The 409 companies so far in the General Counsel Metrics (GCM) global survey report that all together they have 9,900 lawyers (median 7) and 8,212 other legal staff (median 6), which includes paralegals. Their combined legal spend totals $10.2 billion (with a median of $5.6 million) and the revenue of the companies they serve comes to $2.4 trillion (a median of $1.5 billion).
Included in the set so far are law departments from 29 countries, with the US and Canada accounting for seven out of ten participants. Representatives from less-numerous countries include Bermuda, Kuwait, Norway and the UAE. Release 3.0 will have at least 22 industries, including special breakouts for medical devices, national labs, banks (which were combined under Financial Services last year), and possibly two or three more if there are at least six companies in the segment. The largest representation falls under Manufacturing, with 62 departments.
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An indicator of your law department’s attachment to a law firm is the number of offices of a firm that you work with. According to Baker & McKenzie, it pulled in $2.1 billion in 2010, “half of it from clients that use the firm in ten or more places.” This quote from the Economist, May 7, 2011, at 75, shows the degree of enmeshment between the firm and many of its clients: they rely on it for international legal advice from multiple locations.
I have suggested that a metric for loyalty and reliance is the number of a law firm’s partners used during a year, but the number of offices used offers a different spin (See my post of Aug. 17, 2010: don’t think firm, think number of partners or practice groups.). Multi-office and multi-partner dealings speak to a widespread network of respect and reliance.
When you rely on someone else’s summary of research, you might be dealing with a bad translation. Even so, this summary statement of a survey finding caught my attention: “82 percent of respondents [to the survey described below] reported an increase in regulatory activity within the past year. The most common form of regulatory activity was the service of subpoenas seeking document production.”
The quote comes from The In-House Perspective, April 2011 at 13, which cites Deloitte & Touche’s “Forensic Corporate Counsel Survey 2010: do today’s corporate counsel hold all the cards?” Investigations by government agencies certainly drive some amount of in-house legal work, but formal requests for documents hardly constitute what most people think of as regulatory burden. Regulatory burdens consist of pages and pages of rules that interpret or apply statutes – themselves already jungle-like – or that set forth requirements of government agencies. Document requests might be common, but regulatory activity for a law department ranges much wider.
When we measure something, such as the time it takes to review advertising brochures, what takes place? As the author David Deutsch writes, “One can claim to have measured a quantity only when one has an explanatory theory of how and why the measurement procedure should reveal its value, and with what accuracy.” (at 317). This blog presents 10 ripples from a decision to count and track something.
We evidence authority, in that someone says, “do it” and others follow. Even if the same person who conceives the measurement does it herself, she shows authority over herself: self-discipline.
We introduce a time period for measurement, even if we don’t decide an end point explicitly at the start (“Let’s keep track until we see a pattern.”).
Some legal problems left in baskets on the doorstep of a law department come from the corporate compliance line. Hotlines, as they are called, generate some wheat for lawyers but mostly chaff. This post offers some snippets I have gathered about help lines.
From a small sample of experience, it seems that many calls are trivial. For example, a large chunk allege favoritism. Relatively small numbers of calls come; at one company they averaged 3-7 per month. Most of the services that handle calls use a template to gather the facts and allegations. One company added a step for themselves, to code each item afterward: “was this a valid complaint?”, and estimated that only half were valid.
Callers can remain anonymous at all companies and some 90 percent or so choose anonymity. If anonymous they get a call back number and call within a week or two to hear what was done. While on the call the person will tell you what to call and when. Some companies create a website to let someone fill in the same information they would have been asked for by a person
The Harvard Bus. Rev., Sept. 2011 at 75, discusses a way to deal with complexity through what the authors call triangulation – “using different methodologies, making different assumptions, collecting different data, or looking at the same data different ways.” To understand a complex situation it helps to triangulate from multiple angles and sources.
The corresponding term for social scientists is cross-sectional analysis, which means that if a researcher were to investigate outside counsel expenses, a wide variety of cross sections (triangulations from different perspectives) could inform that study. Which firms are or have been used, interviews with law firms, analyses of matter management data, maps of the invoice process, RFPs, fired firms, fee arrangements, scores from evaluations, historical documents like old guidelines– the list of vantage points and sources extends a long way.
In short, anything about management oozes complexity and allows a multitude of views – perhaps an infinite number of them.
