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“On average, in France, approximately 350 new patent cases are initiated every year in first instance [trial courts] and 110 appeals are lodged.” I knew from that sentence in FocusEurope, Summer 2011 at 54, that good metrics lay ahead in an ad by Véron & Associés. C’est vrai. Based on the firm’s research, that volume makes France fourth in world for patent litigation, trailing the United States, China, and Germany.

Interesting to me also was the firm’s analysis of 1,820 patent cases during 2000-2009 before the Tribunal de grande instance in Paris. Infringement claims made up 81 percent of those cases followed by five percent “employee invention” cases. I think that litigation by employees against their employers over an invention is rare in the United States (See my post of Dec. 13, 2010: some countries’ laws require compensation for employee inventors.). The article explained a liberalization of awards of legal costs since 2007: “Nowadays, several winning parties have been awarded sums ranging from €200,000 to €300,000, which covered a significant part of their litigation costs.”

I mention these metrics not merely to gratify the thousands of French lawyers who hang on my every post, but to stress that empirical data – numbers of lawsuits, types of issues litigated, and costs – helps managers of law departments. To have a handle on the volume and expense of legal issues helps greatly in planning and implementation.

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IMF (Australia) Ltd. Is a publicly-traded investor in litigation. A long profile from The Asian Lawyer, Summer 2011 at 17, explains how its founder, Hug McLernon started funding cases in 1989 and took his company public in 2001. It currently has around $1.7 billion in active claims under management (See my post of May 21, 2009: lawsuit financing with 8 references; and April 11, 2011: hedge funds and investors in litigation with 9 references.).

The Australian legal system differs significantly from the U.S. legal system in several respects that matter to third-party funders of litigation. Contingency fees are restricted, class actions have less formality and scope, there are no punitive or exemplary damages, discovery has less burden, and losers may have to pay the winner’s legal fees. Even so, IMF has thrived, in part by being very picky. McLernon estimates IMF funds less than five percent of the 350 cases it studies each year. Once it puts in money, IMF gains, and exercises, a considerable amount of control over the litigation.

Although much smaller than IMF, other Australian firms invest in litigation. The article mentions Quantum Litigation Funding and Litigation Lending Services Limited. It also mentions Harbor Litigation Funding, active in Europe.

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The point of this post is the increasing availability at low cost of legal guidance and work product on the Internet. The trend toward even more cloud law is inexorable. Bloomberg Bus. Week, July 11 at 41, describes LawPivot as a Q&A website that allows cash-strapped entrepreneurs to ask questions of lawyers. “LawPivot’s algorithms funnel the questions to its roster of lawyers based on expertise and quality of past responses.” Currently free for up to three questions per month, LawPivot plans to charge a subscription fee of $80 per month. The article says that more than 800 lawyers and 1,200 startups have used the site.

This site doesn’t offer form agreements, but that would be a logical extension (See my post of Jan. 21, 2009: YourFreeLegalForms.com; Jan. 22, 2009: free online forms and their quality; Jan. 23, 2009: US Legal Forms; April 19, 2011: Fenwick & West offers standard corporate forms; April 25, 2011: Goodwin Proctor offers forms; and June 19, 2011: Standardforms.org.).

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That hurts, that view really hurts.

That business managers resent laws and kick the dog of the department that reminds them about its costs and constraints can’t be denied. That it takes time for a lawyer to look at an agreement or an advertisement or a potential patent or a lease is absolutely true. Legal review takes longer than a handshake or just plunging ahead. That clients sometimes skirt the edge of the law, race toward the volcanic center, or go over the precipice – yes, lawyers may stop that and sense the resentment of clients who view them as perpetual obstacles.

In a New Jersey L.J, July 8, 2011 profile, the general counsel of Mercedes-Benz USA remarks, without cavil “I want them [his nine-lawyer department] to feel like they’re part of the solution and not part of the problem because legal departments are always viewed as roadblocks.” Ironic, the car manufacture and the metaphor of roadblock and speed bumps.

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Canadian Lawyer gathered salary data from 12 Canadian general counsel. The findings broke them into “director level” and “executive level.” The salary differential was large, as the median for the directors was $155,000 (Canadian dollars) versus $207,000 for the executives (30% higher).

The sample is very small, but the point might still be credible that Executive Vice Presidents – assuming that is partly what the “executives” correspond to – are paid much more than lower-ranking corporate officers who head a legal group.

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The second release has 317 participants from 23 countries grouped into 21 industries. Somewhat more than half of them are headquartered in the United States. One quarter of the participants reported revenue below $500 million. One quarter reported revenue greater than $5.8 billion. The median revenue was $1.5 billion.

The participants reported $8.5 billion in total legal spending in support of $3.1 trillion in revenue. At the end of 2010, they had 8,154 lawyers and 6,783 other legal staff (medians of 8 and 6 respectively). In the smallest fourth, departments reported from 1 to 3 lawyers. The next fourth reported more than 3 lawyers but fewer than 8. Twenty-two departments have more than 100 lawyers.

The report provides medians, quartiles and trimmed means on 25 different metrics related to staffing and spending.

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An article on requests for proposal in the ACC Docket, June 2011 at 74, claims that “More and more companies are using requests for proposal (RFPs) to get a glimpse of what tailored ‘solutions’ outside counsel may offer and on what basis.”

To glimpse tailored solutions may be legitimate and innocent: ask law firms to describe how they would handle a matter or cluster of matters. Or it could be exploitative and guilty: deliberately luring in work product, strategies, tactics and legal analysis without offering a reasonable chance of being retained or protection for the hard-earned experience, valuable time, and useful work product they invest (See my post of Oct. 1, 2005: the ethics of using good ideas in RFP responses.).

One particular question posed by a law department in an RFP puts law firms in a bind: “How would you handle this matter?” It may be the most important question to ask of a law department, but should a firm spill its innermost secrets and legal analysis? Will those thoughts devolve to another firm’s benefit? Consultants face a similar quandary: do you roll out your best thoughts, methods and experience, even with examples and case studies, and risk leaks of all that intellectual capital to a competitor? Or do you withhold and thereby perhaps lose the competition?

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If you would like to receive my no-cost newsletters, click on the notice to the right and enter your name and e-mail address. This issue went to 367 subscribers.

As with my previous newsletters, I looked to my readers to decide what to write about. The spoke through Feedburner, which identified the ten posts published in the thirty days between June 5th and July 4th that had the most views and clicks. During that time, there were 18,421 total views of 389 posts as well as 11,905 click-backs to read 1,184 posts.

My newsletter republishes the top-ten posts in declining order of the total views plus clicks. Additionally, I offer two comments about each post. The newsletter comes to nine pages of material.

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As described in the ACC Docket article (June 2011 at 154), the legal department at Rosetta Stone has grown in five years from three to 19 – including currently seven lawyers and a dozen non-lawyers. Among the latter are some who combat piracy of the company’s software.

My basic belief is that counterfeiting and anti-piracy work should fall mostly to the business units, who should seek legal guidance as needed. It is an operational function not well-suited or appropriate for a legal department. In smaller companies, however, perhaps law is the best niche (See my post of March 16, 2010: counterfeit and piracy of goods with 6 references.).

The Rosetta Stone department also has contract administrators. My view is the same as with anti-piracy staff and functions (See my post of March 2, 2010: contract administrators and managers with 9 references.).

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According to an ACC Docket article (June 2011 at 78), partners in some law firms are gatekeepers “acting as channels through which communications and legal advice must be directed.” Such an arrangement, by my lights, obstructs, slows, and costs. It obstructs because if someone in a law department has a question, why filter it through a partner who can’t answer it? It delays because of the baton-handoff as well as transmission errors and it costs money any time someone in a law firm touches anything. Assuming you know, go straight to the lawyer in the firm who can best provide the service or answer the question.

The same philosophy ought to govern within the corporation. If an internal client knows the right lawyer in your department for something, they should be encouraged to go straight to that lawyer. They shouldn’t need to clear the question or pass it through the Associate General Counsel who supervises that lawyer.

All granted, this straight-to-the lawyer approach breaks down when law departments want to intermediate requests from internal clients to law firms. Only sometimes do departments allow senior executives to pick up the phone directly.