A recent discussion on LinkedIn’s In The House Group raised two interesting objections to using systematic processes, knowledge management, and data tracking to improve corporate counsel and maximize the value of the legal spend. First, some in-house lawyers contended these kinds of productivity focused improvements miss the importance of relationship-making through the contract negotiation process. This is indisputably a compelling point. I have found, particularly in Asia, that you can completely alienate the other side by pushing for a quick, straightforward business negotiation. In Japan, for instance, negotiations require a great deal of time and resources, and it is very hard to pin down a particular position finalized as to a concrete issue. If you try to demand greater momentum in negotiations, unless you have tremendous bargaining power, your insistence will be mostly ignored. I also found in Japan that whenever I ask for a particular provision to be included in an agreement and receive a response like, “That is very interesting,” that means “No!”
Second, several lawyers argued that a productivity focus fails to accurately gauge the return on investment issue. I suppose that these critics are concerned that data collection means low quality, quickly accomplished work will be favored over high quality, thoughtful legal performance. But, ultimately, methods such as process improvement, knowledge management and associated data collection, are nothing but tools. Tools can be used well, and they can be used poorly. If they are used to justify lower quality legal work, then I hope everyone would agree that is a tremendously misguided approach.
In the end, there are two main reasons to have an in-house corporate department where everyone is paid on salary. The first is the hope that, by having an intimate familiarity with the company, you can better tailor legal solutions to best assist the company in its core business goals. The second is the idea that you are paying less for the same legal services than you would if you hired an outside law firm. In my experience, these two reasons are often assumed without any serious analysis as to whether they are true or not. The goal of systematically measuring and improving legal performance is to get an actual grasp of what you do on a daily basis, how well you do it, and whether or not you can do it better. Very few managing attorneys use systematic data illuminating who their top performers are, who are the laggards, and how to consistently provide outstanding service. As a result, the expense of corporate counsel, and, frankly, the deployment of the outside law firm budget, is usually a legal spend gamble with an unclear outcome.