Rees Morrison, Esq., is an expert consultant to general counsel on management issues. Visit his website,, write Rees@ReesMorrison(dot)com, or call him at 973.568.9110.
Related Posts with Thumbnails

Past Posts by Category

  • Benchmarks
  • Clients
  • Knowledge Mgt.
  • Non-Law Firm Costs
  • Outside Counsel
  • Productivity
  • Showing Value
  • Structure
  • Talent
  • Technology
  • Thinking
  • This Blog
  • Thoughts/Observations
  • Tools

  • Past Posts by Month

  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • March 2006
  • February 2006
  • January 2006
  • December 2005
  • November 2005
  • October 2005
  • September 2005
  • August 2005
  • July 2005
  • June 2005
  • May 2005
  • April 2005
  • March 2005
  • February 2005

  • Technorati Profile Creative Commons License This blog is licensed under a Creative Commons Attribution 3.0 United States License.

    Rees Morrison’s Morsels #168: the long and the short of it (in brevia veritas)

    Functions, linear and otherwise. A function of some variable is linear if the plot of the function creates a straight line when you plug in different values for the variable. Think of X=3Y. If you plug in different numbers for the variable Y, the function of that equate creates a straight line. Function is another way to refer to the equation that summarizes the relationships between numbers. As an example, the larger the law department, the lower its total legal spending as a percentage of its company’s revenue – that is a function. The variable would be the revenue and the output graphed would be a line with different spending benchmarks (See my post of July 25, 2010: linear descriptions of data with 11 references.).

    Another criticism of the Delphi technique. A 1991 study “showed that the Delphi was no more accurate than other decision-making methods, because ‘consensus is achieved mainly by group pressure to conformity.’” This debunking comes from David Orrell, Apollo’s Arrow: the Science of Prediction and the Future of Everything (Harper 2007) at 240 (See my post of Dec. 9, 2005: Delphi technique -- nominal group technique; Feb. 1, 2006 #1: introduced in 1964 by Rand researchers; Aug. 25, 2009 #2: criticism of Delphi technique based on same research; and June 16, 2011: two descriptions of the technique.).

    An app from TyMetrix for rate information. LTN Law Tech. News, June 2012 at 54, mentions that TyMetrix offers a free app for mobile devices that uses data from its Real Rate Report to provide average hourly rates of law firms (See my post of May 31, 2012 #2: first law department app.).

    State taxes on legal services. Other than in five states, law departments do not have to pay state taxes on legal services billed to them. The exceptions are Delaware, Hawaii, New Mexico, South Dakota, and Washington according to Legal Spend Management: An International Perspective, a white paper produced by Jeff Hodge and Bridgeway at 3 (See my post of July 17, 2005: currency complications and VAT; and Dec. 1, 2006 #4: US state taxes on law firm services.).

    A metaphor to visualize why companies spend lower percentages on legal services as they grow larger. Thinking about why increasing revenue correlates with decreasing legal spend as a percentage of revenue, a metaphor captures such economies of scale. Visualize the demand for legal services by a company as multiple pipes that at different times and volumes flow into balloons of varying sizes. Each balloon stands for a lawyer (let’s simplify away all the other staff). Some balloon lawyers are too big for the pipe that fills them, so there is “untapped capacity”; some balloon lawyers are too small to catch all their flow. As law departments grow and add balloons or adjust existing balloons, they better match them to the flows. The larger the department – the meta-balloon – the more efficiently it matches the demand for legal services (See my post of Nov. 7, 2010: metaphors cited explicitly on this blog with 25 references.).

    A clever and funny send-up of law departments and their reviews of marketing material

    On the last page of NJBiz’s special issue, General Counsel of the Year Awards (2012), Heartland Payment Systems placed an ad honoring Charles Kallenbach, its General Counsel. At the top, the full-page ad says “Congratulations to Charles Kallenbach for receiving the highest honor ever bestowed upon a human being by the nation’s top business magazine.” [I can't do strike-throughs on this blog platform, so imagine the bold words marked out]

    That touch of hyperbole is struck through and this follows: “Congratulations to Charles Kallenbach for receiving the highest honor ever.” It too is crossed out.

    Finally, in the middle of the page, there remains “Congratulations” and under it, in much smaller type is “(Sorry Charles, our legal department had to approve this.)”

    My congratulations to those in the legal department of Heartland, or to whomever, with the sense of humor and style to come up with the funniest law department ad ever published. Strike that!

    The impressive activities in Asia of the In-House Community

    The In-House Community comprises over 18,000 in-house lawyers and those with a responsibility for legal and compliance issues within organizations along the “New Silk Road.” The New Silk Road is their clever term for a broad swath of the world from Asia through the Middle East. The activities of the Community include the annual In-House Congress circuit of events, Asian-MENA Counsel magazine and Weekly Briefing, and the In-House Community online forum.

    One notable feature of Asian-MENA Counsel is the plethora of recruiters who focus on the in-house market. The placement scene must be frothing and bubbling over there! In the latest issue I noted full-page advertisements for seven of them: ALS Recruit, cml, Hughes-Castell, Legal Labs Recruitment, Lewis Sanders, Pure, and Taylor Root.

    Rees Morrison’s Morsels #167: the long and the short of it (in brevia veritas)

    In-house counsel app. Thomson Reuters has released what it believes is the first iPad app delivering corporate counsel specific information. Called GC Advisor, the app offers information, technology and legal research tips, as well as articles and CLE classes. There is also an RSS feed to CLE-accredited webcasts from the West LegalEdcenter and to Twitter feeds. The app is available from iTunes, according to Charles Christian’s American Legal Technology Insider, May 2012 at 5 (See my post of Feb. 1, 2011: app industry for matter management functions; and April 15, 2011: information delivered in-house by mobile apps.).

    How many in-house lawyers practice full-time in New York State. Under a rule promulgated in 2011, Part 522, “All in-house counsel employed full-time in New York as of Part 522’s effective date, April 20, 2011, were required to apply for registration within 90 days of the effective date.” This update comes from NYSBA Inside, Spring/Summer 2012 at 16, which is devoted mostly to the attorney-client privilege. Here is a way, perhaps, to find out how many in-house lawyers are in one of our largest states, and perhaps even how many law departments! To learn more about the New York requirement, write one of the co-authors, Vincent Syracuse (See my post of May 23, 2012: in-house attorneys in the United States.).

    Extravagant number of lawsuits in Brazil would skew metrics. It seems innocuous to ask on a survey for “your number of pending lawsuits.” Then I read in Alternatives, the newsletter of the International Institute for Conflict Prevention & Resolution, May, 2012 at 120, about Brazil, “with 70 million court cases now pending.” A Brazilian litigator observed that “It’s very cheap to litigate in Brazil” and that cases routinely drag on for 10-15 years. It would totally distort a world-wide count of cases, such as for a benchmark study, if a company doing business in Brazil has more there than everywhere else combined.

    Scale analysis. John Brockman, Ed., This Will Make You Smarter (Harper Collins 2012) at 185, offers a discussion by Giulio Boccaletti on scale analysis. The author claims that scale analysis is “one of the most robust bridges between the linear and the nonlinear, the simple and the complex” (See my post of Aug. 25, 2009 #4: law departments as complex non-linear adaptive systems; and Nov. 26, 2011: chaos theory and legal departments.).

    Gender difference in raises expected for joining another company’s law department. From the ACC Docket, May 2012 at 18, which draws on a study done by a recruiter, comes a troubling finding. “Men, who said they would require, on average, a 19.2 percent rise to move, expected more than women, who expected only 13 percent." The recruiter suggests that women take more into account that just salary, but it could be that women need to have more confidence in their abilities and the compensation they deserve.

    Part LXIX in my series of collected metaposts embedded in other posts
    1. Attorney-client privilege II (See my post of Feb. 28, 2012: attorney-client privilege with 13 references.).

    2. Boards and GCs (See my post of May 13, 2012: general counsel and boards of directors with 9 references and 1 meta.).

    3. Budgets, quarterly (See my post of May 30, 2012: seek quarterly budgets from firms with 8 references.).

    4. Co-location of lawyers with revenue (See my post of May 25, 2012: quantify lawyers by location near revenue with 9 references.)

    5. Concept visualization (See my post of March 7, 2012: concepts visualized with 8 references.).

    6. Logical reasoning (See my post of April 26, 2012: fallacies with 6 references.).

    7. Government agency law departments (See my post of May 13, 2012: law departments of government agencies with 19 references.).

    8. Math concepts (See my post of April 17, 2012: seven sophisticated math concepts with 8 metas.).

    9. Number of in-house US lawyers (See my post of May 23, 2012: in-house law departments in the U.S. with 10 references.).

    10. Tools (See my post of April 17, 2007: “tools” defined and in this blog, by category, with 73 references.).

    Six observations gleaned from patent activity by a company that rarely seeks patents

    An article about how an actuary at Towers Watson obtained a patent for a statistical algorithm, in the NY Times, May 13, 2012 at BU7, raises several points about law department management.

    Initially, the employee cleared with his boss that it would be worthwhile to obtain a patent, and then “worked with an outside patent firm to translate technical information into layman’s terms for the application.” The Towers Watson law department probably lacked patent experience and had to find and retain a specialty firm.

    Later, the lawyer who started the patent application left the firm and someone at Towers Watson had to decide whether to stick with the firm or move the project with that lawyer (See my post of Aug. 14, 2005: transitioning matters; July 21, 2006: moving matters; and June 13, 2006: the decision to hire the firm or the partner.).

    Third, during the firm’s review of prior art – patents already granted that might deny the idea’s patentability – the actuary had to check a dozen of them for similarity. Stated differently, even though the law department handles a matter, clients have significant input.

    Finally, to decide whether to file a second application for accelerated review required a cost-benefit analysis, including competitive positioning (See my post of Feb. 19, 2009: invention review committees with 7 references.).

    The first application took more than two-and-one-half years from filing to approval, and the second (the accelerated application) took a bit more than a year. This exemplifies how law departments need to explain to clients such delays and keep them abreast of developments.

    Finally, the inventor was given a plaque and $2,000 when the patent actually issued. Such a corporate practice increases the work load of the legal department and increases its spending (See my post of Dec. 13, 2010: awards to compensation for inventors with 6 references.).

    General counsel who leave and take up consulting to law departments, other in-house lawyers, and even non-lawyers

    Almost seven years ago I listed 12 general counsel who had turned to management consulting after their stint as a top lawyer (See my post of July 31, 2005: from Bob Banks to Peter Zeughauser.). It seems so natural, but successful career shifts from practicing to preaching are difficult. I made the point back then, understatedly, that “some have succeeded.”

    To the list from long ago I can add Kevin Blodgett (formerly of Dynegy), Jim Boeckman (from Toppan Photomasks), Ron Pol (Acting GC at several New Zealand entities), John Wallbillich (from a Midwestern energy company) as well as Scott Ewart, a former general counsel of two Canadian companies. Some in-house lawyers come to mind who were not general counsel but later tried their hand at consulting (Suzanne Hawkins, Duncan Smith) and at least two others that I know of are doing so now.

    In the vintage days of consulting to legal departments, the field counted quite a few who had no law degree, let alone had practiced law in-house. Those included Bob Berkow, Jon Bellis, Dan DiLucchio, and a raft of others. Even now several non-lawyers dispense management advice to general counsel, including Richard Stock and Helene Trink.

    References to law departments of government agencies and a surmise on their size

    When I have written about the law departments of government agencies, mostly I have marveled at the size of them (See my post of Sept. 10, 2005: New York City’s Corporate Counsel Office, more than 650 lawyers; Nov. 6, 2005: US Department of Homeland Securities, roughly 1,500 lawyers; Pennsylvania’s Office of the General Counsel, 700 lawyers several years ago; May 10, 2006: legal advisors to the U.S. Department of State, 165; Aug. 2, 2006: State of Massachusetts, something like 650; Dec. 3, 2006: New Jersey Attorney General’s Division of Law, 580 lawyers; Feb. 16, 2009: FBI, 180 lawyers; March 11, 2009: United States Postal Service, 220 attorneys; and Dec. 14, 2011: U.S. Air Force with 1,500 lawyers.).

    Just the references in the last paragraph, stumbled upon by happenstance, support surmises that (1) the largest law departments in the country support government agencies and (2) thousands of governmental legal departments exist in the United States (See my post of Dec. 20, 2011: government lawyers outnumber private sector two to one; and Dec. 31, 2008: 9% of lawyers in large U.S. survey identified themselves as government lawyers.).

    Also regarding governmental legal teams, one post here referred to several that had faced internal audits of their teams and processes (See my post of May 31, 2005: Austin, Texas; Dec. 23, 2005: Pierce County (Washington) Prosecuting Attorney’s Office; March 26, 2007: Hernando County, Florida; May 19, 2006: LA’s Office of the City Attorney; Jan. 20, 2006: California Department of Transportation’s Legal Division; and Dec. 18, 2006: Amtrak.).

    Other citations on this blog don’t pertain to the size of the governmental legal department (See my post of Oct. 29, 2006: city of Chicopee, MA and interns in its legal function; April 17, 2007: Federal Gov. Printing Office and pro bono; July 8, 2010: FDIC posts online guidelines; and Dec. 13, 2011: Trenton, NJ’s law department under strict controls.). There may be other posts that should be in this metapost, but it is hard to know what to search for to find them.

    Rees Morrison’s Morsels #166: the long and the short of it

    Distinctions among law departments by market value? ISS, the rating agency, has announced that it will judge companies against a peer group of 14 to 24 companies, based on industry, revenue and market value. It is unclear to me how the market value of a company has an effect on anything about how a law department operates or vice versa (See my post of Aug. 8, 2011: collects four posts on lawyers per billion dollars of market value.).

    Surveys that may get more than one respondent from a department. An invitation to a survey was distributed by ACC and MCCA to approximately 10,000 in-house lawyers. Although data was collected from December 2010 through April 2011, only one response per law department was accepted. If multiple responses came from the same law department, which one did they pick? Did they choose by title, first in, fullest data set (See my post of July 21, 2008: survey methodology with 40 references, 25 internal references.)?

    The nominal fallacy. We succumb to error when we think that if we name something the name carries explanatory meaning. This error is called the nominal fallacy and is referenced in John Brockman, Ed., This Will Make You Smarter (Harper Collins 2012) at 62. If you talk glibly about a “discount” you may feel that once you have named the arrangement with a law firm with that term you understand it better. You think the term “discount” itself carries explanatory meaning, but that is wrong thinking. This blog has correctly pointed out other fallacies (See my post of March 23, 2006: sunk-cost fallacy; Aug. 22, 2006: fallacy of induction; Jan. 18, 2008: fallacy of misplaced concreteness; March 15, 2009: fallacy of conjunction; April 2, 2009 #4: special pleading as logical fallacy; and Aug. 18, 2011: teleological fallacy.).

    The economics of SaaS compared to installation on a company’s servers. I was recently told that many law departments take a five-year useful life for depreciating software they have bought. The total cost of ownership over that period could be more when you “rent” the software. It is also cheaper to rent than to buy if you are going to swap out the software relatively soon. Another consideration is that if each year you make the decision whether to renew or not (unlikely with matter management software, I agree), it keeps vendors on their toes. Finally, acquiring a license is treated as a capital expense vs an operating expense for ASP software (See my post of April 20, 2011: capitalized expenses with 7 references.).

    Rees Morrison’s Morsels #165: the long and the short of it

    Legal hold software and a cost metric for law departments. Consider an item from KMWorld, Feb. 2012 at S12. “BIA’s legal hold compliance SaaS solution costs less than $2 per user per month.” Does that mean per employee or only per employees who are “custodians.” If that metric can serve as a lodestone for evaluating the cost of other solutions, it will help general counsel make decisions on which solution to license (See my post of Feb. 9, 2012: an award for litigation hold software.).

    Another sip of coffee wisdom. According to Bloomberg Bus.Week, Feb. 27, 2012 at 84, pacing and timing are key to the most effective ingestion of coffee: “The first coffee of the day should be the biggest, and drunk the fastest for a big bump. The rest of the day’s doses should be smaller and ingested more slowly.” Chuck the first venti, then tipple (See my post of March 3, 2011 #4: coffee and collaboration.)

    Mapping the interconnected features of the brain. The Economist World in 2012 at 153, introduces readers to the Human Connectome Project. The Project has set itself the task of mapping neural features down to around a cubic millimeter of brain tissue, each of which contains hundreds of thousands of nerve cells. “In the cerebral cortex there are about 50 areas for which good maps already exist, but they cover only about a third of the cortex.” Over the next two decades, neurology will be able to contribute to how general counsel hire, evaluate, train and motivate legal staff (See my post of Feb. 28, 2012: Brodmann 10 area.).

    Involved in e-discovery? A judge can find you liable for mis-handling it. “Courts are increasingly holding in-house counsel responsible to ensure that the e-discovery process is done properly Swofford v. Eslinger, (Sept. 28, 2009); Phoenix Four, Inc. v. Strategic Res. Corp. (Aug. 1, 2006).” This quote comes from a Feb. 2012 issue of a magazine, at S13, in a piece by James D. Shook of EMC’s e-discovery and compliance practice. This opens the lid on malpractice insurance, indemnification, and other unpleasant topics. The cases referred to are Swofford v. Eslinger, 671 F. Supp. 2d 1274 (MD Fla., 2009); and Phoenix Four, Inc. v. Strategic Res. Corp, 2006 U.S. Dist. LEXIS 32211 (S.D.N.Y. May 23, 2006). Have there not been any cases in the past three years?

    The steady march toward internet databases of knowledge. The George Mason Law and Economics website has a post by Josh Wright on February 22, 2012 about an interview with Google’s Senior VP Amit Singhal on where search technology is headed. In 2010, Google purchased Freebase, a community-built knowledge base packed with some 12 million “canonical entities.” Google has invested dramatically to “build a huge knowledge graph of interconnected entities and their attributes.” Google now has “north of 200 million entities” Over the coming years, massive online accumulations of information will help in-house counsel (See my post of May 21, 2009: Wolfram Alpha.).