Articles Posted in Management Disciplines

Yesterday a prestigious global law firm showcased the baffling combination of brilliant legal expertise and management dysfunction that drives business clients to distraction:  

A “2018 Innovation Hours program, which recognizes up to 50 innovation hours toward billable-hour targets for fee earners”.

This announcement expressly recognized that the attorneys involved in this program — “fee earners” it called them — work for clients under “billable-hour targets” imposed on them by the law firm.

And announced — without irony — its use of “billable-hours targets” in aid of “innovation”.

That it’s common for law firms to impose hourly quotas on lawyers who do the firm’s work — on pain of career jeopardy if they don’t meet that expectation — isn’t news.

Such quotas are Exhibit A for the proposition that when the legal industry values a lawyer’s work by how long that lawyer takes to do his or her job — the legal industry has pitted the attorney’s interests against those of the client.

Did the attorneys working to an hourly quota really think that their client company’s needs required X hours to perform that task — rather than (say) half that time?

Or were individual lawyers motivated by their respective quotas?

Quotas imposed on them by their law firm?

Continue reading

In Part IV of this series I offer the next of my guiding observations as you consider consultations with legal counsel:

3. Be aware of which legal systems might be used to seek access to information that you want protected. Application of the attorney-client privilege — or its non-U.S. counterparts — can vary in a big way from jurisdiction to jurisdiction.

Consider this hypothetical:

  • A U.S.-headquartered corporation has a subsidiary in the Netherlands — and in-house legal counsel at both places.
  • During an investigation of alleged anti-competitive conduct the EU Competition Commissioner seizes e-mail messages between in-house counsel of the Dutch subsidiary and non-legal, business personnel.
  • The U.S. parent and its Dutch subsidiary assert a “legal privilege” to preclude use of those e-mails against them.

Where you have employed in-house legal counsel who communicates with client company employees on a matter of legal concern, the rules governing the attorney-client privilege (or a foreign law counterpart) might well be different in — for instance — the European Union’s legal system as compared with the U.S.

Continue reading

In Part III of this series I offer the next of my guiding observations as you consider consultations with legal counsel:

2. Once you’ve got the attorney-client privilege, take care to avoid losing it through “waiver”.

While in Part II I stated that applying this privilege to a specific situation can be extremely complexlosing this privilege can be really easy. It’s called “waiver”.

How waiver works: Client discloses (all or some) contents of a client-lawyer consultation to a party whose participation is not within the scope of lawyer-client communications otherwise protected by the privilege.

Simple example: Client engages attorney for legal advice and lawyer gives legal advice. In other words, lawyer learns facts from client, client seeks legal advice, and lawyer advises client, in “confidence”.

So far so good. Other things being equal (again, this privilege is extremely complex in its terms and application) — the privilege may apply.

Then … there’s communication about all or some of contents of that client-lawyer consultation with someone who happens to be outside the scope of lawyer-client communications protected by the privilege:

Continue reading

In Part I of this five-part series I wrote that business owners and executives need to take the lead in protecting their companies’ proprietary information — and their own as individuals — from the legal system.

And that opposing litigants, criminal prosecutors, and government agencies are all too ready to access information that may place you in civil, criminal, or regulatory jeopardy.

So you need to be proactive in reaching out to your lawyers on this. And don’t even think about DIY lawyering because application of this privilege to a specific situation can be extremely complex

In Parts II through V I offer guiding observations as you consider consultations with legal counsel:

  1. Make sure that you know who the client is: Is it a business entity that you own or work for? Or are you — as an individual — the client?
  2. Once you’ve got the attorney-client privilege, take care to avoid losing it through “waiver”.
  3. Be aware of which countries’ legal systems might be used to seek access to your proprietary information. Application of the attorney-client privilege — or its non-U.S. counterparts — can vary in a big way.
  4. In some circumstances here in the U.S. you may be better off consulting a lawyer in outside, independent, private practice rather than in-house counsel — because of the way that the courts respond to those two types of attorneys in their application of the attorney-client privilege.

Continue reading

This five-part series is an extended plea to business owners and executives: Protect your company’s proprietary information — and your own as an individual — from the legal system.  

Two key points:

1. It’s your job to initiate the conversations with the right lawyers that will secure the protections of the attorney-client privilege. Be proactive here. 

2. The only legal “rules” governing this privilege consist of broad generalizations. Their application to a specific situation is up to an individual judge’s “discretion” based on the unique set of facts before the court.

You need skilled legal advice on how a judge might exercise that discretion in your situation. So protecting confidential information is no place for do-it-yourself lawyering.

Let the attorneys do their job. In fact: make the attorneys do their job.  

Continue reading

Last week — when I read that its General Counsel Jeffrey Carr was calling the shots for the law function in targeting 50% savings in Univar’s legal spend — I took notice.

I believe that the single most important success factor in the ElevateNext / Elevate Services / Univar collaboration is that the client’s law function is being led by a business guy — not someone whose perspective is confined to practicing law.

I write Part III of this series from a strong personal viewpoint. My  comments here are based on observations over the years about how companies are well served — or badly served — by their lawyers.

Besides reading what’s in the media and press releases, I have no special knowledge about this particular venture (though I have met and spoken with some of the participants in the past — long before this announcement was made).

Following my own experiences as a practicing lawyer and later as an executive (see more here), I’ve concluded that attorneys are good at deploying technical legal expertise, but that they are unskilled in managing people, poor at cost control, and are either uninterested or undisciplined about proactive liability prevention.

This was not always my view. As a practicing lawyer I never questioned the way that lawyers in law firms and in-house conduct companies’ legal affairs.

Then I accepted a corporate client’s invitation to run one of its divisions.

Continue reading

The bold collaboration I described in Part I of this series among Univar’s General Counsel Jeffrey Carr, the law firm ElevateNext, and law company Elevate Services is just the latest chapter in legal innovation for each of them.

Their respective lengthy and successful records of accomplishment in legal innovation are important.

As with most other things in life, it’s more instructive to watch what folks have actually done than listen to what they say.

The law firm:

Nicole Auerbach and Patrick Lamb are founders of the new law firm announced in connection with this collaboration: ElevateNext.

Auerbach and Lamb co-founded Valorem Law Group, LLP, a litigation boutique which since 2008 has pioneered something that lots of law firms tout but that few actually implement: Alternative legal fees — they don’t bill their clients by the hour.

Lawyers’ ability to tell clients in advance what they can expect from those lawyers — and then stand behind their commitments commercially — is an underdeveloped skill in the legal industry.

Continue reading

In this blog I describe how to use effective management and liability prevention to control corporate legal costs. This calls for a certain amount of detail.

But in providing that detail I want to be sure not to lose sight of what this blog and my law practice are all about. Simply this:

When a company’s management is unhappy with the job their lawyers are doing, I help its owners or executives to put something better in place to achieve their business goals.

Half a decade ago Harvard Law School’s Professor David Wilkins announced that the legal industry had entered “the Global Age of More for Less” (see this speech, and this journal article).

The response from all but a few attorneys: Crickets.

Seen in the light of their cost-plus business model, “more for less” just sounded to them like “less” money to pay for “more” time. With a “management” technique that consists of assigning bodies-to-tasks, the legal industry is blind to process efficiencies, competitive pricing, and other skills that anyone who works to a P&L has already mastered.

As a result, law firms and in-house counsel won’t acknowledge that the collision between the legal system’s skyrocketing demands and company budgets (that have more constructive uses than to pay attorneys) is unsustainable. Instead, the legal industry tells business clients that the best they can hope for is to minimize (what they tell us are) the inevitable increases in their legal and regulatory line items.

Casey Flaherty, an insightful lawyer who advises corporate law departments, describes attorneys’ prevailing mindset:

Continue reading

In Part I of this two-part series I contended that the vast majority of law firms and in-house departments haven’t adopted Six Sigma, Toyota “Lean” protocols, or other process improvement standards because the legal industry’s cost-plus business model undercuts any incentive for operational efficiency.

Undercuts how?

Law firms and in-house departments “organize” their work by simply assigning bodies (of admittedly smart people) to tasks. 

So the adoption of systematic, measurable processes of the kind long since developed everywhere else in your company would reduce lawyer-bodies-assigned (and hours worked). That’s not what legal industry — its business model — is designed for. 

This Part II addresses a rare exception: The“Electronic Discovery Reference Model” — EDRM — a collaboration between lawyers, companies, technology providers and legal process outsourcers to create business process and technology standards for cheaper and more accurate “e-discovery”. 

“E-discovery” stands apart from most legal industry tasks. Because here the incentives favor — in fact they require — operational efficiency.

Continue reading