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Many people may have heard about Ben Franklin’s T: to help reach a decision, list pros and cons and then cross off those that balance each other out (See my post of April 2, 2006 – Franklin T’s and other decision aids.). Some variations on it appear in Len Fisher, The Perfect Swarm: The science of complexity in everyday life (Basic Books 2009) at 143-145.

Fisher says that sometimes a simple tally of how many arguments you have listed for an action compared to how many against will suffice. If you do not know enough to weight the various arguments, just count and decide for the larger number. With what Fisher calls “level-wise tallying” you underline the factors in the pro and con columns that you think are particularly important. Then tally those decisive factors and go.

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A heuristic is a simple rule or set of rules for making acceptable decisions from partial information or in a limited time span. People use heuristics all the time (See my post of Sept. 9, 2008: economics of information explains why we rely on heuristics; March 15, 2009: the affect heuristic, where preconceived value-judgments interfere with our assessment of costs and benefits.).

A rule of thumb means to many people the same thing as a heuristic – a rough guide to behavior or a decision. Many benchmark norms evolve into general decision criteria, such as one lawyer for each non-lawyer being about right. When I searched my accumulated 6,700 posts, I found many instances where I used “rule of thumb” (See my post of Sept. 13, 2005: 5% of external spend goes to vendors other than law firms; Aug. 24, 2005: three-quarters of law firms bill monthly for each matter; March 28, 2005: one lawyer and one paralegal at a firm per matter; July 16, 2005: 1-2 major firms per billion of revenue; Dec. 22, 2005: a billion dollar M&A deal requires a full-time lawyer; Feb. 9, 2006: one specialist for every two generalist lawyers; March 10, 2006: perhaps five hours inside for every 20 outside on a matter; Feb. 11, 2007: three primary firms per in-house lawyer; Nov. 20, 2007: global law department if it has 10+ locations outside HQ country; June 22, 2008: work 60 hours to charge clients 40; Feb. 7, 2009: e-discovery costs; Aug. 18, 2009: questionable rule of thumb on make-buy: the inside cost should be one-third of the outside cost; Sept. 22, 2009 #2: for panel selections approach no more firms than twice the number you expect to end up with; Jan. 20, 2010: for presentations by law firms – 1/3rd talk, 2/3rd answer questions; March 24, 2010: fees paid to law firms that might justify an internal hire; April 20, 2010: number of people needed to train for process improvements; May 12, 2010: reduction in supervisory time as experience grows; and Jan. 11, 2011: inside counsel are far too costly in relation to outside counsel.).

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This blog tries not to market particular offerings of services or products, but this post cites one to describe an approach that law departments ought to know about. A glossy of Pillsbury Winthrop Shaw Pittman describes PEARL™ — Pillsbury’s E-Discovery Alliance of Resource Leaders. The firm has strategic alliances with ACT Litigation Services, Discovery Services LLC, Integreon, Ji2, Protiviti and TransPerfect Legal Solutions. PEARL combines these firms’ capabilities with Pillsbury’s and offers clients what it calls integrated, unit-pricing on electronic discoverey.

I have no knowledge of how effectively this ensemble plays together, how qualified any of them are, or whether indeed this is a novel offering. I do suspect that law department litigators might like to sign on for a single-source, single-price package. In the complicated world of e-discovery, where finger pointing and jostling and coordination among vendors creates nightmares, this approach might be attractive. It might inspire law departments to push their favored litigation firm to assemble complementary talent in a similar fashion.

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Expensive litigation and a cost-oriented arrangement led me to make several points. As described in Litigation 2011 at 40, Medela, a Swiss-based company that is the world’s leading maker of breast pumps, hired Dechert to defend it in a 2006 class action. Three years later, “with Dechert’s fees piling up and no end to the litigation in sight, Medela president Carr Lane Quackenbush persuaded [the Dechert partner in charge] to switch to an alternative fee arrangement.”

For each of the half-dozen key tasks remaining, the partner created a budget. Under the fee arrangement, if the firm’s costs exceeded the budget for a task, Medela paid 35 percent and withheld the rest in a hold-back pool, “to be paid out later if the firm met various success metrics in the litigation.”

Of note, the client negotiated this fee arrangement three years into the case. The article does not indicate whether the client threatened to shift the remaining work to another firm or what leverage it exerted, but the fact remains that clients do have the ability to alter terms mid-course. Clients are not locked in.

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When an industry standard is established for some technology, as for example smartphones rely on several industry standards, those patents that are deemed “essential” for the standard become subject to different rules. The company that owns an essential patent may be required to license it on a fair and reasonable basis to all comers.

Your company benefits from being crucial to an industry standard, but your patent lawyers may face increased work to meet the demands of licensees. With so-called non-essential patents, by contrast, you can decide whether you want to license them and to whom and on what terms (See my post of April 29, 2011: licensing patents with 9 references.).

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A “Found Money” initiative. One of the law departments that took part in a recent survey recognizes its ”In-house attorneys who have saved or delivered money to the company by going beyond their ‘day jobs’ and leveraged their legal skills sets and knowledge of the company to ‘find’ money that outside lawyers could not.” I find that quote bizarre.

Don’t start your day by checking your emails! A piece in the Harvard Business Review, May 2011 at 85, claims that “Ninety percent of people check their e-mail as soon as they get to work. That turns their agenda over to someone else.” They peek first at e-mail because it seems easy and effective to shoot off some replies and it makes them feel wanted, part of the collective, in the loop. Don’t do it. Decide what you need to do and later check email (See my post of Nov. 6, 2006: e-mail with 6 references; Aug. 26, 2009: 30 e-mail effectiveness tips with 9 references; and Nov. 27, 2010: productivity given huge amount of time on e-mail with 14 references.).

Contract terms and posts on them. Having assembled metaposts of various kinds related to contracts, I had some posts left over. Each of them pertains to the contract terms themselves (See my post of Jan. 21, 2010: 30 contract terms most frequently negotiated; March 16, 2010: nine rules for contract drafting; Sept. 4, 2010: three priority levels for contracts handled by law departments; Nov. 10, 2010: measurement of contract complexity; March 20, 2011: exhaustive contracts and their risks; and March 21, 2011: revenue leakage from contracts.).

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A corporate lawyer at Brown Brothers Harriman, Florian Feder, has created a legal wiki,Standardforms.org. It provides a free depository of sophisticated legal documents. According to Robert Ambrogi, who wrote about this resource on June 3, 2011, “Notably, the site is not intended to serve as a cache of ready-to-use legal forms. Instead, its founder hopes that the wiki feature — which allows anyone to add and edit forms — will provide a vehicle for lawyers to improve the forms and lead to a consensus of what they should say.

The wiki has fewer than 10 forms posted so far, including some often-used agreements. Feder describes himself as “interested in the art (science?) of contract drafting and in ways of making this process more efficient with the help of new technologies.” I am grateful to Vince Polley and KnowConnect PLLC for bringing Ambrogi’s post to my attention.

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I doubt that the Board of Directors of companies care one whit about how the law department runs. To them, it’s a black box. Unless there is a problem such as an anti-trust investigation or a gargantuan lawsuit, where for a bit they may wonder about how the problem is being handled, all they care is whether the advice they get seems sound, useful, and timely (See my post of March 24, 2011: too much of an assumption of involvement by Board.).

When the total cost of the legal services hovers around a half percent, even if that fruit were thought to be low hanging, it is tiny fruit. Moreover, if you cut either inside or outside, the other will likely rise and wipe out some of the savings. Beyond cost, the knottiest risks and unknowns a company faces are not in the lawyers’ purview. The company-crushing risks of poor products, expensive manufacturing or distribution, lousy marketing and other quintessential business concerns matter far, far more than legal stumbles. When legal swords flash, only extremely rarely do they cut to the company bone or need to come to the attention of the Board, and never do the operations, structure, and costs of the legal team.

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The ubiquitous David Cambria said this during a SuperConference panel and I got to thinking what he means. Partly he means that if you look back at numbers, that is more limiting than when you project numbers forward. But projection (modeling) does rely on historical numbers. The distinction blurs to the degree your past metrics were necessary to enable you to calculate the formulas and identify the future trends that the model does (See my post of Jan. 19, 2011: clarify patterns and formulas from data with the spreadsheet function of trend lines.). The assumptions the modeler builds in makes all the difference in the accuracy of a model, so to that extent you are swapping one form of uncertainty (future data) for another (premises of the model).

Some models used by law departments include Monte Carlo simulations (See my post of May 15, 2005: Monte Carlo simulations as computational models; and June 26, 2009: simulations and models.) and litigation risk analysis (See my post of June 17, 2009: decision tree software with 6 references.).

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Without attorney-client privilege, law departments can’t compete equally with outside counsel. Retrograde jurisdictions fail to provide that powerful shield (See my post of April 25, 2011 #1: narrow rejection of privilege in Europe.).

By law, salaried lawyers of an Indian company are barred from representing their client in court. That would be a minor wound. But here is the killer: “It has been suggested in some cases that communications or legal advice generated by ‘qualified legal professionals’ (in other words, someone with a current practicing certificate) from the internal law department of a company should be protected under Indian Evidence Law.” Does that mean obiter dictum “suggests” the privilege holds? This equivocal summary of the privilege, from Amarchand & Mangaldas in Practical Law Global, Spring 2011 at 52, ends clearly on a note of absolute uncertainty: “That said, the position concerning communications of in-house lawyers is still unclear.”

In Japan, by contrast (Herbert Smith at 55), in-house lawyers enjoy the same privileges as external counsel so long as they are a Bengoshi or a Gaikokuho Jimu Bengoshi. The commentary notes intriguingly that “In Japan, there are many legal department in Japanese companies with in-house lawyers who are not qualified lawyers.”