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In-house attorneys may fume when told they cannot hire any longer the trusted, familiar counsel they used to, that they must transition work to the large and unfamiliar winners of a preferred counsel contest. Ruptured are the long-standing relationships, gone are the modest bills from dedicated partners cast-away are the institutional histories,

Internal clients of the law department likewise feel pain. They too had broken in the new shoes long ago and were comfortable with the advice and style of the familiar partner. They too suffer disruption and unfamiliarity with the replacements at an unknown (and probably far away) firm. As a final indignity, clients might have to foot higher bills. The angst of lopping off familiar firms spreads from the law department to its clients.

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Even if a company does not enter into a fixed-fee arrangement for all-you-can-eat from a law firm in a specialized area, it might look into an arrangement where short calls are not billed. Alternatively, short calls are only billed a set amount such as $100 for a call of less than 20 minutes. The basic idea, permuted into a myriad variations, encourages the law firm to be able to weigh in on questions but not have to create new matters or bill every dime (See my post of Dec. 2, 2009: Telstra retainer agreement).

Every area of law is a possibility for such a retainer. At the SuperConference, a speaker from Home Depot described such an arrangement for bankruptcy preference issues. Club Med created such an outlet for questions on Mexican law. A law department I know supports a retainer arrangement for environmental health and safety questions.

It is important with these deals to define who can call the law firm and where the line is that allows the firm to shift from the all-in covered to hourly billing. The arrangements have the benefit of predictability for both sides and they might encourage the firm to keep track of questions and store answers.

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In the Fall of 2010 ALM Legal Intelligence collected surveys from 176 US in-house lawyers. LexisNexis CounselLink published the findings. A part of the report draws on a theoretical distinction of the Association of Corporate Counsel between what it has defined as “traditional” and “proactive” law departments. The archetypal operating styles diverge significantly on several of their nine characteristics.

One characteristic, “Style and Culture,” posits a traditional department as one that “Functions as a ‘law firm’ within the company” while a proactive department “Integrates closely with the business team.” In the LexisNexis survey, 18 percent described themselves as “like a law firm” while 82 percent chose the other description.

On the characteristic of “Work Orientation,” traditionals were described as focused on “project management” while proactives focus on “process management.” In the survey, the split was almost even (53% vs. 47%) among the respondents, but I must confess the distinction eludes me.

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The General Counsel of Polycom, Sayed Darwish, spoke at Consero’s conference last month. One of his charts gave the number of pages in various historic statutes regarding financial services. The Federal Reserve Act of 1913 took a mere 31 pages; Glass-Steagall of 1933 had 37 pages; the Interstate Banking Efficiency Act of 1994 weighed in at 61 pages while Sarbanes-Oxley was only slightly longer at 66; Gramm-Leach-Bliley in 1995 doubled to 145 pages. But then came the table-crusher, the blue whale of financial legislation: Dodd-Frank dropped on lawyers last year a Leviathan of 2,319 pages.

One statute, seven times as long as the total of the preceding five historic statutes. And wait ‘til you see the school of regulations that will swim along behind! Legal department attorneys throughout the land groan as they labor to make sense out of the massive legislation. What strategic plan of a law department could have allowed for that?

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The January issue of Historically Speaking has several essays on narrative. As historians use the term, it means the larger “story” told by them in their articles, monographs, and books. Different from factual accumulation, causal relation, or measured argument, the narrative power of good historical writing rests on an over-arching image it creates – a compelling tale of good against evil, steady progress or tragic teleology, noble heroes or downtrodden peasants.

The prevailing narrative in writings about law department seem to me to be two, and they conflict. One weaves and assumes a feel-good panorama of progress: spunky law departments rose up in the 1980’s, gained power and prestige through the ‘90s, and have flowered lately into bastions of skill and respected professionalism. Onward and upward!

A second narrative darkens, as it revolves around struggle and tension. Notably the give-and-take of leverage over outside counsel shows up, especially with fractious billing arrangements, or even competition. That is not all; to secure respect from clients and prove the law department’s worth has become an endless effort, one with little prospect of final victory. A narrative of Sisyphean struggle, it stretches ahead.

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Danette Galletin, the law department administrator at The Williams Companies, sketched at Mitratech’s Interact some things that department has done to accumulate and disseminate knowledge. One is to start a law department blog, which they use mostly to post communications to the group of 70 lawyers and 31 support staff. Another is the template library which contains best-practice forms that a group picked. Lawyers are not required to use the forms but they are a resource.

As a third tool Galletin added that the Williams law department hosts a wiki. The way she described it made it seem like an intranet site that anyone can add to fairly easily. It has all sorts of pages that have accumulated knowledge. Some are links to law firms the company uses; others to useful blogs; some have annotated agreements; a portion is devoted to Legal Aid; and others house all manner of nuts and bolts about how to do something.

Each page (subject) has a moderator and they use garden gnomes as a motif: everyone has to tend it for the knowledge garden to flourish. They thank solid contributors with a “Gnome of the Month” award. There’s no place like gnome!

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The ideal general counsel, as a selfless developer of people, mentors the lawyers below and helps them maximize their potential. We wish. In the rough-and-tumble real world, cautions Jeffrey Pfeffer, strong performance may harm you if your powerful general counsel refuses to play that nurturing game. “Power holders prefer to keep the most competent performers in their current roles. By keeping these standouts down, those with power not only look better but also are less likely to lose the stellar employees …”

The quote comes from a review of Pfeffer’s book Power: Why some people have it – and others don’t in Talent & Leadership, Q2 2011 at 79. Optimists hope that Pfeffer has picked on a rare perversion of power – bury talent to raise your own stock – but a sneaking suspicion remains that such misapplications of might do happen (See my post of April 23, 2008: bad behavior by managers with 10 references; and March 31, 2009: nine more posts on poor behavior.).

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An E-Bay procurement person who supports law department, speaking at Mitratech’s Interact Conference, explained her company’s use of a Tier 1 list of about a dozen law firms, each of which gets annual reviews and quarterly budget reviews. She mentioned that the company used more than 400 law firms five years ago, but has reduced that number to 250 and would like to converge it more.

Having covered the background facts, she mentioned that the law firms that represent e-Bay, and other law firms that would like to, have search systems that let them know quickly about lawsuits filed against the company. Often, they call to seek to be retained before the company itself has received the summons through its registered agent or however.

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Impressive that a number two in a law department jumps to the Court of Appeals. Corporate Counsel online on May 18, 2011, said that the US Senate confirmed Yale University’s number-two GC, Susan Carney, to the U.S. 2nd Circuit Court of Appeals (See my post of May 3, 2007: Chubb lawyer left to clerk for 10 months.).

An inappropriate role for a law department. The general counsel of a textile manufacturing company stated on a survey responded to last Fall by 176 US in-house lawyers that “Our department acts as an audit team constantly reviewing deals for return on investment to maximize EBITA.” A purer example of a law department far off the range, outside its remit and over its head I haven’t read!

15,800 in-house counsel in Spain? This was the message I read on LinkedIn. My translation is in the subject. ¿Somos realmente más de 15.800 abogados de empresa en España? La Abogacía parece ser una profesión solitaria según el artículo públicado en la pag 42 de la revista ABOGADOS, editada por el CGAEdado que el 71% trabaja de forma independiente pero en dicho artículo se menciona que LinkedIn discussion (See my post of Dec. 31, 2010: compiles posts on the number of law departments worldwide.).

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