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Deloitte & Touche’s “Forensic Corporate Counsel Survey 2010: do today’s corporate counsel hold all the cards?” asked a question of its respondents about the number of “non-legal” roles the top lawyer holds.

They found that during the past five years, “the number of non-legal roles held by a GC in an organisation has increased from approximately 2.4 roles to 3.7 roles, the most common non-legal roles being company secretary and those associated with risk, compliance and regulatory responsibilities.”

We might wonder what constitutes a ‘legal role” according to those who conducted this survey? Handling litigation, reviewing contracts, preparing corporate governance documents, I suppose. It feels to be an artificial line, however, to exclude corporate secretarial work. Company secretary may have a different meaning in the UK, which seems to have produced the bulk of the respondents.

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Leaders League 2010 Intelligence Report at 73 tells about the efforts by Pernod Ricard’s law department to discipline the company’s use of domain names and enforce their rights as to others. In 2008 they conducted a global audit of their domain names. “We wrote our own rules designed to correct past errors by consolidating a consistent global portfolio.” They assigned an in-house specialist to ride herd on the group of names. That included filing for new registrations, abandoning unnecessary names, and recovering names that had been wrongfully or misleadingly registered by third parties.

With more than 26,000 brands all over the world, Pernod-Ricard must vigilantly keep an eye on the proliferating tumult of domain names. Whether the law department should do so is a different question (See my post of Sept. 27, 2005 #2: tracking domain names should not be a responsibility of the legal department; and April 13, 2010: relative numbers of domain names, patents, and trademarks held by companies.).

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General counsel, especially, as well as other managers should never use the parental put-down: “Because I told you so.” David Deutsch, The Beginning of Infinity: Explanations that Transform the World (Viking 2011) attacks throughout what he calls bad philosophy, bad explanations. One form is the peremptory end-of-discussion just quoted (at 311).

That final word fails because it can be used to “explain” anything. Second, it addresses only the form of the question, not the substance. Third, “it reinterprets a request for true explanation (why should something–or-other be as it is?) as a request for justification (what entitles you to assert that it is so?).” That end-of-the-discussion answer “confuses the nonexistent authority for ideas with human authority (power).” Fifth, and finally, “it claims by this means to stand outside the jurisdiction of normal criticism.” The employee must take the assertion on faith.

Because I tell you not to, don’t use it!

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I thought it would be interesting to ask senior leaders in the cottage industry(thus, Cottage Industrialists) that serves legal departments – other than law firms – to describe the early history of their company, offer some metrics about it today, and give a specific example from a client about some management practice. Frank Orzo, the co-founder and long-time leader of LTOnline, prepared the first post.

The Lawtrac product was first introduced in 1984. Since its inception, we focused on in-house law departments, and to be candid, this was by accident, and it probably helped that I was not an attorney. My background was in software development. I worked for a national software development company in New York.

When hard drives were first introduced to personal computers, a colleague and I decided that this device could be a useful computing device. We approached several of our existing customers, and one – a large insurance company – said we could help them in their law department. At the time, the only product that offered the functionality that they required was developed for a Wang VS. Since they were an “IBM” shop, this was a non-starter. We agreed to build the product to their specifications for a nominal fee, provided we would retain intellectual property rights. The result: Lawtrac 1.0, based on the DOS operating system. Our customer was thrilled when we delivered a working product, only to then ask us how multiple users could share the information simultaneously. We said, “Oh, you want to share this information? Let us get back to you.” And that is how we developed the first PC-based, networked matter management system for law departments in January, 1985.

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This past Spring, BottomLine Technologies acquired Allegient Systems for about $48 million. The purchase significantly increased Bottomline’s position as a leader in the legal invoice automation market, particularly for insurance and other corporate claims functions. BottomLine, a publicly traded company, says on its website that it handles invoices for well more than 100 P&C claims departments.

Claims management often falls under the legal department and its high volume and distinctive characteristics make specialized database software appropriate (See my post of June 14, 2011: management of claims with 11 references.).

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General Counsel Metrics asked on its benchmark survey “What matter management system do you use?” Of the 190 other law departments so far that indicated either “none” or “n/a,” it seems that a “none” means what it says, however, “n/a” could mean there is a package but the person does not know the name or does not want to disclose it. In any event, that group has a median of four lawyers, so it is dominated by very small departments. Specifically, 32 of them have a single lawyer; 26 have two lawyers; and 21 have three. What most surprised me, however, and makes me suspect that “n/a” does not mean “no system” is that six companies reported more than 100 lawyers.

As a final note for this update on matter management systems, there were a dozen departments that reported a “custom” system. I assume that means they rolled their own, not that they licensed a package and modified it significantly for their own use. Now step back. Having reported on 125 departments in the group that have licensed a matter management package, it may be that for every ten doing that, one creates a bespoke system. Some of these, we should consider, have legacy systems from years ago; today, few if any law departments have IT or consultants write a system from scratch (See my post of April 3, 2011: early data on no-system departments.).

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This blog has cited at least four German law departments, and refered elsewhere to Germany several times. A huge amount of managerial creativity and practicality in that economic powerhouse has gone uncovered, therefore, which I wish were not the case.

Send me news about German law departments (See my post of Jan. 27, 2006: Siemens CEO rose from general counsel position; Jan. 14, 2007: Daimler-Chrysler and staff reductions; Jan. 12, 2009 #3: Germany’s loser-pays rules; Feb. 18, 2009: Robert Bosch’s century of a law department; Feb. 18, 2009: Bosch’s IP department; March 15, 2009 #3: ISDA documentation by Deutsche Bank; May 11, 2008: Deutsche Bank’s Walker came from the SEC; Sept. 21, 2009: DeutscheBank and outsourcing; May 31, 2010: comparisons of total legal spend among French, German, Italian, and UK participants; and Feb. 9, 2010: 20% discounts but a clawback bonus expected for successful projects.).

I now add Germany to my list of country accumulations (See my post of April 14, 2011: departments in Canada with 28 references; and May 24, 2010: departments in China with 10 references.).

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Ironic, isn’t it, that this blogger, who tries hard to write clearly, admits to the impossibility of writing completely clearly. “[W]e habitually underestimate the difficulty of communication,” writes David Deutsch in The Beginning of Infinity: Explanations that Transform the World (Viking 2011) at 254. “It is impossible to speak in such a way that you cannot be misunderstood,” wrote the philopher Karl Popper (at 404). Eight pages later Deutsch repeats that: “no idea can be represented entirely explicitly.”

This intractable problem consists of more than an inability to choose the right words or sentence structure. Indeed, its source is deeper than the fuzziness that surrounds every word. The difficulty also stems from the cognitive distortions our brains are subject to and the physical impediments of hearing. Deeper still are the tacit assumptions, pieces of background knowledge that the speaker and listener do not share and do not realize they don’t share.

At the epistemological level, we don’t know what we know, so how can we convey a bit of it accurately, let alone receive it faithfully. All cognition is creation, so when someone says something, the other person creates the message. No brand or stamp reproduces the idea exactly. Repetition helps communicators converge on the bones of what is being said; a form of error correction.

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Two of the in-house lawyers profiled in the Columbia L. School Mag., Summer 2011 at 28, singled out the explosion of intellectual property issues. You could say that being a lawyer for Warner Music Group and the Jacksonville Jaguars football team would obviously entail extensive intellectual property rights. True, but they both stressed the spiraling amount, prominence, and complexity of those issues. They and many other in-house lawyers want to maximize the value of the intellectual capital and property owned by their companies and that campaign has taken on more prominence.

Global commerce and the internet, cited frequently as forces that have compounded legal needs and complexity, both link closely to IP rights. As trade spreads you have to be more protective in more areas; as technology untethers physical products to online domains (and abuses), IP advice takes on ever more importance. IP as a strategic tool looks set to soak up increasing amounts of law department time.

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An article packed with sound advice gracefully written cautions in-house lawyers to call meetings with their clients judiciously. Writing in ACC Docket, Nov. 2010 at 82, the authors urge you to have a clear purpose “and not be overly long (you should generally not schedule a meeting longer than 30 minutes.). Meetings tend to expand to fill the available time, so this is good advice.

This reminds me of analogous advice about brevity. Keep memos short; stop loquacity in e-mails, prune PowerPoint decks; and give clear, crisp answers. Smaller is better.

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