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“Scientific explanations are theories, assertions about what is out there and how it behaves.” Thus does David Deutsch, in The Beginning of Infinity: Explanations that Transform the World (Viking 2011) at 3, introduce the key concept of his magisterial book. Explanations come about because people conjecture them regarding objective reality. “Discovering a new explanation is inherently an act of creativity” (at 7). Then, they and others criticize and test the creative conjecture. All valid knowledge begins, expands, and improves by those steps.

Knowledge acquisition done properly Deutsch terms fallibilism, which recognizes “no authoritative sources of knowledge, nor any reliable means of justifying ideas as being true or probable”. Fallibilists believe all knowledge might be shown to be wrong, fallacious. Progress in thinking exposes misconceptions and improves them, in turn to have those sounder explanations challenged and improved on. For example, best practices for law departments ought to be viewed as the best current thinking, but not to be taken on faith or forever or because of the endorsement of a guru general counsel.

Everything we observe about a law department rests on an implicit or explicit set of beliefs about what matters – theories (See my post of Feb. 21, 2007: the theory-ladeness of all observations.). Illustratively, to pay attention to the law school where a potential hire graduated rests on a set of theories. The categories for posts on this blog evidence theories of what counts in law department operations.

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In response to my post last week about Kenneth Arrow’s impossibility theorem (See my post of Sept. 5, 2011: no fair way to decide by voting.), my friend Michael Mills, head of the legal software firm Neota Logic, offered some additional comments.

“True, there is no approach to decision-making that assures fairness. But the analytic hierarchy process (AHP) is a much-tested and analyzed process for making better (though not necessarily best) decisions. Wikipedia has a quite good article. And these companies have built AHP into easy-to-use software.” Thank you, Mike.

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As an aficionado of metrics and empirical data, I encourage you to take this survey. Mitratech, a leading provider of software for legal departments, is surveying legal departments to get their feedback on technology spending – which technologies are they investing in? How much are they spending? Which technologies provide the best ROI? A few moments of your time and you could learn a lot.

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Doggedly, I compile these monthly summaries of the elite, but does anyone care?

Most firms in survey say that law departments ask for UTBMS code billing but give no guidance based on codes (July 5, 2011)

Three-quarters of the respondents said clients remained mute regarding any conclusions they might have drawn from coded bills.

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Previously, I collected my posts that have lists of 6, 7, and 8 items (See my post of Aug. 8, 2011: 44 posts with lists of six; Aug. 11, 2011: 34 posts with lists of seven; Aug. 19, 2011: 25 posts with lists of eight.).

Those posts with nine items number 19 in all, starting with the 5 my first three years of blogging (See my post of July 14, 2005: 9 roles of in-house lawyers; Oct. 30, 2005: 9 low-cost morale boosters; May 7, 2006: 9 diversity tools from GE’s legal departments; June 27, 2006: 9 obstacles for a technology project; and March 23, 2007: 9 arguments against offshoring.).

The following three years saw quite a few more niners (See my post of Feb. 6, 2008: 9 ways to improve outside counsel guidelines; Sept. 28, 2008: 9 insights a general counsel might share if invited to speak at a law firm’s partner retreat; Oct. 10, 2008: 9 reasons to ask firms to compete for your assignments; Nov. 21, 2008: 9 tips for dealing with change; Dec. 14, 2008: 9 technologies that enable remote work; Feb. 1, 2009: 9 applications of Web 2.0 for law departments; March 27, 2009: 9 myths held by inside lawyers; March 31, 2009: 9 more manifestations of bad behavior by managers; Oct. 12, 2008: 9 energy-saving ideas; Oct. 22, 2009: 9 reasons why law firms agree to volume discounts; March 16, 2010: 9 good-writing rules for good contract drafting; May 3, 2010: 9 advantages in-house lawyers see in their jobs; Nov. 29, 2010: 9 limits on your ability to change what is negotiated in a contract; and May 19, 2011: 9 propositions about value.).

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Having just put up two posts – yesterday and today – with 29 costs that some legal departments bear (or might bear), I wanted to compile my most recent writings on internal legal department budgets. Internal budgets figure in other posts, but not necessarily specific expenses (See my post of Jan. 2, 2009: advantages of zero-based budgets; Jan. 4, 2009: multiple cost centers for some departments; Jan. 21, 2009: JDS Uniphase elaborate operating plan; March 29, 2009: five steps toward realistic internal budgets; May 6, 2009: “budget” compared to “forecast”; Aug. 10, 2009: operating costs of law departments compared to law firms; Aug. 11, 2009: four methods of budgeting; Feb. 19, 2010: DuPont’s double budgets; and Sept. 30, 2010: interplay between benchmarks and budgets.).

Many posts address unusual expenditures and I listed them in the two previous posts (See my post of Oct. 11, 2008: legal budgets should not include purchases of fakes; Dec. 7, 2008: perhaps for reimbursement of flights on the corporate jet; Dec. 26, 2008 #2: charitable gift matches not included in law department budgets; Jan. 23, 2009: personal concierge and childcare at reduced rates; Jan. 15, 2009: local units provide support; Oct. 11, 2009: some tasks and costs handled by HR and not charged to legal; April 20, 2011: metapost on capitalized expenses; Jan. 12, 2011: Arizona to Nevada weekly commute; Sept. 12, 2010: what budget should include compliance expenditures; May 8, 2011: frustration of responsibility for costs but no control over internal investigations; Jan. 18, 2011: GlaxoSmithkline lawyer’s defense paid for; Dec. 23, 2008: administrators lack budgets, except some for facilities; Jan. 29, 2009: rental costs imputed; and Feb. 25, 2009: data of $17,000 per year per lawyer for facilities costs; Jan. 20, 2009: lawyers supervise staff outside the legal department; Sept. 12, 2010: speculations on SEC filing costs; May 4, 2009 #3: BEA termination packages; May 12, 2009: HP arrangements for those let go; and June 7, 2010: departing Schering-Plough GC got $12 million.).

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The first 15 items of expense I covered in my post yesterday (See my post of Sept. 6, 2011: unusual expenses sometimes in legal department budgets.). Here are the final 14.

  1. Independent investigations (See my post of May 8, 2011: frustration of responsibility for costs but no control.).

  2. Insured costs or premiums for insurance (See my post of Oct. 31, 2007: various kinds of litigation insurance.).

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Courtesy of Aspen, publisher of the two-volume directory of more than 30,000 in-house lawyers at some 8,000 corporations and nonprofit organizations, your law department can get the 2010 directory on CD-ROM. This year’s edition (2011) has more than 2,800 pages and retails for $1,495. For questions about the directory, write Kate Brady.

The CD-ROM will be sent to you at no cost if your law department completes the General Counsel Metrics benchmark survey for the first time during the next 10 days.

To benefit from this special offer, good through September 17th, click on this Aspen GCM link and submit your 6 elements of 2010 staffing and spending data. You will receive both Release 3.0 of the GCM benchmark report (with 500+ participants) and the CD-ROM by early October. Please state at the end of the survey where it asks how you learned about the opportunity that you would like the Aspen Directory of Corporate Counsel or send me an email.

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First 15 of various expenditures irregularly (or rarely) included in legal department budgets

Budgets of legal departments include many costs as a matter of course, such as salaries, cash bonuses, retreats and conferences, Continuing Legal Education, subscriptions, and a range of other common out-of-pocket disbursements. Even with that broad commonality, many expenses hit the budget of general counsel only irregularly, if at all. This post covers 15 of them; a later post will complete the list of 29.

  1. Aircraft fees (See my post of Dec. 7, 2008: perhaps for reimbursement of flights on the corporate jet.).
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A piece in the Harvard Business Review, Sept. 2011 at 32, describes a makeover of office space at the pharmaceutical company Lilly. The facts I extracted from the sidebar may not be representative at all, but they triggered some thoughts.

One point was that employees typically spend only 35 percent of their time at their desks. On account of that, some architects think it logical to reduce individual office space and increase the amount of shared and temporary, unassigned space. I have written about cubicles and movable office spaces (See my post March 21, 2006: hoteling at Sun Micro; June 5, 2007: office layout; Feb. 20, 2005: open cubicles; Nov. 19, 2005: open space at non-US law departments; May 7, 2006: office layout; May 4, 2007: shrinking office space; May 24, 2007 #3: a general counsel in a cubicle; April 23, 2008: physical office arrangements; and Dec. 4, 2010: open office arrangements.).

Another point was that the total square footage per employee was 212 (See my post of Nov. 8, 2005: lawyers at 100 per square foot at SEI Investment; Jan. 29, 2009: rental cost in the US for a law department’s space – about $25 a square foot; and Feb. 25, 2009: square foot per lawyer estimated at 700.).

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