Jim Collins on BigLaw?
May 19, 2009 | Filed Under Law Firm Trends, Managing
Best-selling author Jim Collins releases a new book today: “How the Mighty Fall.” Here’s an overview, in his own words, courtesy of BusinessWeek Video (4 mins; click on the arrow at the lower left to start, then the “||” to stop):
Here are the stages of failure:
Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death
I have the book on order; I’ll resist connecting the dots with the legal industry until I’ve read it. Mr. Collins has an uncanny knack for distilling management research into easily comprehended ideas of wide application.
Until then, here was his definition of hubris:
The outrageous arrogance that inflicts suffering upon the innocent.
Hmmmm…
(Update 23 May 09: New York Times has a fascinating profile of Mr. Collins and the process followed in writing his new book here.)
Business Schools Get a B-
March 16, 2009 | Filed Under Managing, Compliance
The New York Times took a close look yesterday at business schools in light of the recent failure of many CEOs and senior executives who sported top-tier MBAs, wondering whether the current curriculum is up to the task.
A welcome bit of candor from one MBA school:
“It is so obvious that something big has failed,” said Ángel Cabrera, dean of the Thunderbird School of Global Management in Glendale, Ariz. “We can look the other way, but come on. The C.E.O.’s of those companies, those are people we used to brag about. We cannot say, ‘Well, it wasn’t our fault’ when there is such a systemic, widespread failure of leadership.”
That’s rather perceptive, since it gets at what the degree is supposed to confer mastery of: administration. Most companies now in the regulatory crosshairs probably needed less administration and more leadership.
You can’t have a debate without traveling down the Charles River:
Jay O. Light, the dean of Harvard Business School, argues that there have been imbalances both on campuses and in the economy. “We lived through an enormous extended period of financial good times, and people became less focused on risks and risk management and more focused on making money,” he said. “We need to move that focus back toward the center.”
I would disagree as most large companies have tremendous resources dedicated to managing risk. But unless the right people are overseeing it, and being hired to run it, all the theoretical risk models aren’t worth much. In addition, some of the smoking craters left by certain financial companies were from instruments designed to control risk that went sideways.
There could be some reason for optimism, although not for the business schools:
Some employers and recruiters also question the value of an M.B.A., and are telling young people they can get better training on the job than in business school. A growing number are setting up programs to help employees develop skills in-house.
That sounds good; perhaps down the road something similar will have to be done to plug the gap left in the training we received in law school.
Do GCs Want Change? A Rejoinder
June 20, 2008 | Filed Under New Services, Managing
My friend Bruce MacEwen swung for the bleachers this week with a herculean post in his Adam Smith, Esq. weblog.
Bruce takes a discussion from Legal OnRamp and puts it out there for all to see (his mention of Paul here refers to Paul Lippe, Legal OnRamp’s CEO). The subject is whether GCs really want change in the legal industry, and Bruce bravely answers “no”:
But I actually have a more subversive suggestion, which falls under “E. Other” in Paul’s schema: I don’t believe GC’s really want things to change, for all their trashmouth game talk. GC’s want their backsides protected by the imprimatur of the Magic Circle, the New York Elite, or the Skadden/Latham brand name. GC’s don’t want “good enough” quality; they want top-drawer quality.
It sure beats your run-of-the-mill “recent developments in trover and replevin” blog post.
I actually agree with Bruce on one level. GCs don’t want things to change. Who does? Change is hard to face and harder still to make work.
Where we part ways is over the conclusion that many GCs use top-tier New York and London firms on major deals and litigation because they don’t want change. It could just be the right tool for the job. And I really disagree about saying this is an exercise in CYA. GCs I know don’t think that way. (Maybe I’m just a hayseed from the Heartland…)
For most GCs, major deals and litigation are a minor part of their budgets, smoothed out over X number of years. In the rest of the spending, I actually see more signs of change, and a desire to change, than ever before.
Any one general counsel can turn a back on change. It may work for awhile, but over the long run, there’s a name for the person who will force the issue. Your CEO? Perhaps. Your CFO? More likely.
Most likely: Your successor.
You really owe it to yourself to pour a glass of cabernet and read through Bruce’s entire post. It’s excellent.
How general counsel can navigate change is a subject that I have been spending a lot of time on recently. I’ve mentioned two projects it in my Wired GC — Select newsletter in the last few months, and I’ll touch on both here shortly.
One thing we can agree on: for the legal market, change makes glaciers look fast. You better stand back at the right moment, however…
Return on Legal Resources
October 2, 2007 | Filed Under Legal Resources, Managing
The law department as profit center?
Bloomberg reports that this group at DuPont was responsible for $290 million in revenue last year,which included a $92 million asbestos insurance settlement.
According to the article:
The asbestos agreement in December 2006 resulted from a three-year-old DuPont program to find ways to generate revenue by filing lawsuits the company would not otherwise have initiated or by seeking licenses from companies using its patents. The law department has brought in $630 million since 2004, according to DuPont assistant general counsel Thomas Sager.
Dupont is integrating alternative fee arrangements into cost recovery activities:
The firms that handled last year’s insurance settlement, Pittsburgh-based Kirkpatrick & Lockhart Preston Gates Ellis and Beaumont, Texas-based MehaffyWeber, reduced or waived their hourly rates and shared about $15 million of the settlement.
Big settlements can skew results a bit, but it’s an important discipline for a law department. It’s perhaps an even more important signal to send to the CEO and the board.
GE Legal Takes the Lead
April 18, 2007 | Filed Under Technology, Managing
Corporate Counsel magazine has announced the winner in its second annual selection of the best US legal department. Out of 500 legal departments who were invited to participate, 30 responded, with self-nomination materials.
The winner: GE. As the full report notes, GC Brackett Denniston leads an in-house team of 1,225 lawyers (with a budget near $1 billion), who make particularly good use of technology. One example is the Early Case Assessment (ECA) program:
The matter gets logged into the legal department’s tracking system. Within 60 days to 90 days, lawyers assigned to the case identify and interview witnesses; collect, review, and report on relevant documents; and assess the risks. The attorneys can also tap into a system designed by the legal department’s technology team and pull up any legislation or case law that could affect the dispute. Ultimately, the litigation team can decide, early on, whether it’s best to settle or take the case to trial.
ECA and other initiatives allowed GE to reduce litigation costs from $120.5 million in 2002 to $69.3 million in 2005. It’s an interesting and important statistic when a growing company lowers legal costs. Something for law firms scrambling for more business to ponder.
GC Legal also uses a robust IT department to make it work, including:
… ten full-time staff and one attorney. They custom-tailor systems to meet the company’s legal needs, such as virtual deal rooms, work-flow tools, and tracking systems. The group spends $2 million a year developing and supporting those systems — but they estimate the up-front costs save millions in lawyer productivity each year. “I’d love to buy more [software] off the shelf,” says John Brudz, senior counsel of legal tech, “but we get more added value [developing it ourselves] because off the shelf just doesn’t work for our size.”
You can hear a collective sigh from the legal tech community, who would love to get some of that spend allocated to their products.
Like its core businesses, GE Legal leads from a combination of top-shelf talent and a concentration of financial and capital resources. It almost seems like they have reached critical mass, and are generating improvements that come from the network that is GE Legal.
Also recognized by Corporate Counsel are the legal departments of J.C. Penney, Allstate, and Accenture.
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