One of my favorite pastimes(?) is watching the behemoth that is the US economy. I have been fascinated by it since my Intro to Economics class in college way back when (supply and demand baby!). It’s a pretty incredible engine; dynamic and resilient over the course of hundreds of years. But it does have some down periods, big ones on occasion, and I have lived through several of these. And despite clamoring from the left and the right, whether the US economy is good or bad, up or down, really doesn’t depend on who is President. Our economy has a mind of its own – like a four-year-old or a cranky grandparent. Regardless, for the past couple of years, we have all been wondering if the USA will fall into a recession or not. So far, the answer has been “not.” Which is great. Gen Z deserves a break or two. If our economy does go into a recession one thing all in-house lawyers will see is an increase in the number of bankruptcy filings. It’s never a great day when a major customer of a company files for bankruptcy protection.[1] Most in-house lawyers know, intuitively, that getting paid amounts owed by that customer will now be a challenge. But there is so much more that in-house counsel must be aware of when dealing with a debtor in bankruptcy if they expect to properly advise the business on the next steps (or recognize an issue that requires the expertise of outside counsel). On the other hand, while most in-house lawyers will experience bankruptcy from the viewpoint of a creditor of the bankrupt company (my experience), some will have the unenviable task of seeing it up close and personal as counsel to the debtor filing for bankruptcy protection. Albert Einstein said it best when he noted, “That’s a bummer, dude.” He was, as usual, correct (and succinct). Consequently, in-house lawyers also need a basic understanding of the bankruptcy process in case such a filing becomes a realistic possibility, and they are called upon to provide some initial advice to the business or bring in the experts if necessary (which you will do if the company is on the verge of going under). Sound painful? Never fear, I got your back. This edition of “Ten Things” deals with bankruptcy basics for in-house counsel:
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Ten Things: Asking For More Legal Department Resources (How and When to Go Big)
In my last book, Showing the Value of the Legal Department: More Than Just a Cost Center, I tackle one of the fundamental issues facing all in-house legal departments: it sucks to be a cost center. You can check if you want, but I am pretty sure that’s what I said.[1] Why does this matter? Because cost centers are places the business looks to cut when times get tough, or the numbers need “improving.” And, historically, most legal departments have had a ”cut my budget” sign taped to their backs. This is due partly to those evil bastards in finance, and in part because most in-house legal departments have not aggressively marketed themselves to the business. It’s probably more the latter, but who’s keeping score?[2] By aggressively market, I mean taking the steps necessary every day to show the value provided by the legal team, and, more importantly, showing how the department can create even more value if properly nurtured. If you have been a long-time reader of the blog, you know that I have written about how to go about showing value and how to market the department. Now I want to take on yet another task in-house lawyers often suck at (my early self included), i.e., how to ask for more resources (and not get laughed out of the room).[3]
I’ll lead off with it is not easy, but it can be done if you prepare the ground in advance of the ask. And now that most in-house legal departments are heading into “budget season.” It’s the perfect time to rip the “cut my budget” sign off your back and replace it with a “we deserve more budget” sign – or button. That’s right, this edition of “Ten Things” takes you through the process of how to ask for more resources and – on occasion – get them:
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Ten Things: Having Hard Conversations Inside (and Outside) the Legal Department
I have a lot of fun with this blog – and I hope that comes through. But every once in a while, I like to delve into something more challenging, more serious. Today is one of those days. Last year, I wrote about how to deliver “bad news” to the business. A year or so before that, I discussed how to fire someone. Neither is a particularly pleasant topic, but if you are going to succeed in the in-house world, these are conversations you will have and you need to know how to handle. Now it’s time to discuss the last of the trifecta of pain, how to have hard conversations at the office. It’s a close cousin for the first two but, as you will see below, requires a slightly different skill set and mentality. Hard discussions for in-house lawyers usually fall within a handful of categories, i.e., you are acting as a manager (or the subordinate), as a co-worker in the legal department, dealing with a co-worker outside the department, or you are dealing with someone outside the company (like outside counsel). Regardless of who you are dealing with, most of us (including myself, even today) avoid these types of discussions because they are not fun and because no one wants to be the bad guy. For in-house lawyers, it’s an even more arduous chore because – while lawyers are usually great when arguing for a client or for a client’s position – we are the worst at having discussions involving ourselves. No worries though, grab some coffee and stick with me; we’ll get through this because this edition of “Ten Things” discusses how to have hard conversations at the office:
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Ten Things: Alternative Fee Arrangements – What In-House Lawyers Need to Know
I had a different topic in mind for this post and then someone sent me a screenshot from a fee request filing on Pacer (the federal courts’ e-filing system). Here’s just a snippet:
This is not a joke. You are reading this correctly – $775.00 per hour for first-year litigation associate lawyers. $1,205.00 per hour for a third-year! In a world that often feels insane, we’ve reached a new level of rate insanity when it comes to legal fees, especially those demanded by the mega firms. If you are like me, you looked at this chart and then fell out of your chair, unconscious and involuntarily flopping on the floor like a dying fish. Or maybe that’s just me? Unconscious or not, there is a lot wrong with these numbers, but I do not want to spend 3,000 words bashing the business model of the mega law firms. I know you all get it. Hell, even the folks at Big Law get it – they just can’t change the trajectory. But, the bigger questions to me are: (1) is this rate insanity sustainable, and (2) what can in-house legal departments do about it? Personally, I believe that the number of clients who can afford these rates (or have matters justifying these rates) is shrinking, like George Costanza at the beach house coming out of a cold swimming pool.[1] In other words, is a reckoning coming?
I have no idea. These rates may, in fact, be sustainable. The legal services marketplace seems to be immune to pressures other businesses face. So, let’s just set that question to the side. Instead, today I want to talk about – once you stop flopping around and get back into your chair – what in-house legal teams can do in response to rates like this. In particular, I want to discuss alternative fee arrangements as I have been asked about these numerous times over the past month or so and they are likely to be (if done correctly) one of the most promising ways legal departments can get some control over the cost of legal services, especially when economic times appear to be as uncertain as they do here in the first half of 2023. This edition of “Ten Things” will tell you what in-house lawyers need to know about alternative fee arrangements:
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Ten Things: Essential Issues for In-House Counsel (2021 Edition)
Welcome back, everyone! I hope your holidays were joyful and restful (and COVID-free). I was able to make a bit of a dent in the next book, so the ABA goons are leaving me alone… for now. I did have some time to squeeze in the first “Ten Things” blog of 2021. As usual, and like I did when I was general counsel, I like to start the year by sitting back and just thinking about all the crazy shit going on out there in the world and how it might impact my company and the legal team. When I was in-house, I would use this exercise to help me plan out the year, set goals, and – most importantly – set some tripwires for starting to measure and balance risks to the organization. So, I have been reading a lot, talking with in-house lawyers, and generally trying to figure out what’s hot and what’s not. No surprise but it looks like a lot of last year’s list is still pretty relevant (click here to read the 2020 list). But, there are definitely some new players on the field. And, the idea here isn’t to figure out every possible thing that can cause problems or provide opportunity – that’s impossible (See COVID-19 for more details). Rather, it is about doing your best to find a lens to help you anticipate the problems you can anticipate so that the issues that inevitably come out of nowhere are easier to deal with or do not hurt as much. In other words, looking ahead to maximize value creation and minimize value destruction. Also, you should know that my New Year’s resolution for 2021 is to be a bit more pithy with the blog. We’ll see how long that lasts (maybe not even to the end of this one). Anyway, let’s start the car and hit the road! This edition of “Ten Things” takes a look at my predictions of the essential issues for in-house lawyers in 2021:
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Ten Things: Creating a “SWOT” Analysis of the Legal Department
I remember back in law school making fun of our fellow students who had business degrees. We called it the “study of the obvious” and mocked them relentlessly. Of course, I had to run away and hide when they pushed back and asked what my major was – it’s hard to stand tall and claim “political science” as a worthier endeavor. Still, as always, it’s better to be the mocker than the mock-ee! Once I went in-house, however, I began to have a much greater and sincere appreciation for all those business majors. They were paying the bills! They also had a very analytical and numbers-oriented way of looking at things. Something that fit nicely with my approach as a lawyer. Regardless, the first time I heard someone in the business say, “we need to do a SWOT analysis on that,” I thought they were talking about S.W.A.T., a kick-ass police drama from the mid-1970s.[1] Why we needed to do a special weapons and tactics review of a new product launch escaped me, but I was excited to see how they would pull it off. Sadly, no hippies or domestic terrorists needed a beating that warm and muggy afternoon in Texas. Instead, someone started creating a “SWOT” two-by-two box on the whiteboard. Damn (queue-up glorious choir music). I quickly saw the beauty in what they were doing. It was (and is) an elegantly simple way to look at a problem and think through the Strengths, Weaknesses, Opportunities, and Threats – SWOT. I knew immediately that I had to steal this SWOT box thing for the legal department as it could easily apply to many things we were doing there. While some of you likely have experience with SWOT analysis, I am betting that a lot of you have not. It’s a great tool that I used frequently as general counsel, mostly as a way to strategically look at the legal department as a whole and how best to plan to add value to the business. This edition of “Ten Things” takes you through how to use a SWOT analysis to analyze the legal department:
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Ten Things: Using Data Analytics in an In-House Legal Department
If you have ever run an in-house legal department, or just been part of one, you know that one constant question is “How are we doing?” While it appears to be a simple question, it is fraught with multiple meanings. It could mean how are we doing against the budget? How are we doing with turning contracts for the business? How are we doing in the litigation? Or, how are we doing with our compliance efforts? Regardless of the “what” the “how” has troubled legal departments for decades. That’s because historically the legal department lacked the data to measure whatever question was being asked. Consequently, the legal department was often excused from performing or reporting with the same discipline and reliability as other parts of the business. Legal was special. Legal was excused. But, not anymore. Businesses of all sizes increasingly expect their legal departments to work with – and report out – data the same way as the rest of the company. That is why the use of data analytics is now a priority for in-house lawyers. This edition of “Ten Things” will discuss the basics of using data analytics in your legal department:
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Ten Things: Drafting an Enforceable Non-Compete Agreement
For the last several years, non-compete agreements have been under attack in the U.S. by regulators, legislators, and even the courts. For example, in October 2018, Massachusetts joined states like California, North Dakota, Montana, Idaho, Utah, and others by enacting a law regulating non-compete agreements, including providing for “garden leave” and making them inapplicable to “non-exempt” employees. Courts do not favor non-competes and will often look for any reason to limit them or invalidate them completely. But, love them or hate them, non-compete agreements are here to stay, and businesses continue to rely on them as one way to protect customer goodwill along with confidential and proprietary information. See, for example, the recent battle between Google’s Waymo unit and Uber over Anthony Levandowski and the theft of self-driving car technology and know-how. Still, it’s clear that the forces fighting against non-competes are stronger than ever. For example, there is legislation pending in Vermont to ban all non-compete agreements, and at the federal level to ban them for low-wage workers. Which is why it’s important for in-house counsel to take every step possible to ensure the non-compete agreements used by their companies have the best chance of surviving regulatory and judicial scrutiny. This edition of “Ten Things” discusses some tips on how to draft an enforceable non-compete agreement:
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Ten Things: My Boss is a [Censored] – What Do I Do?!
One of the most frequent questions I get from in-house lawyers is how to deal with difficult bosses. I have been very fortunate because – while practicing law for almost 30 years – I can count on a couple of fingers the times I was stuck with a boss who was a real asshole. After talking with a lot of other lawyers (at firms and in-house) I realize how lucky I have been in my career. While rare, I definitely remember how miserable I was the few times I did draw the short straw. Practicing law is tough enough without having to dread coming into the office because of a boss that just makes your life miserable. Still, I survived and got through it. But it wasn’t always easy and some days it really took a toll. I think my revenge was getting to the General Counsel chair a few times and swearing a blood oath to myself that I would never, ever be a jerk boss – something I remind myself of every day. Unfortunately, the problem of crummy bosses in legal departments will never go away. They are out there and they always will be. So, if you want to be a successful in-house lawyer you’re going to need to learn how to deal with them whether they are legal department lawyers or executives in the company (lawyers have no monopoly on being buttheads). This edition of “Ten Things” will set out some of my tips on how to deal with troublesome bosses:
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Ten Things: Increasing Efficiency in the Legal Department Through Technology
One goal set out in my sample legal department goals for 2015 was to increase efficiency (and reduce costs) in the legal department. One of the easiest ways to do this is through the use of technology. This can mean anything from apps for your smartphone to sophisticated software programs running on servers at your company. For some, using technology can be daunting and frustrating. For others, it is as easy as falling off of a log. But, to be a successful in-house lawyer or general counsel you need to embrace technology and make sure your team does as well. So, if you are afraid of technology, you need to get past that.
One issue with using technology is that the choices are almost endless and it can be difficult to distill things down into a useful list. This edition of “Ten Things” takes on the task of listing some key technology that can help you increase your own efficiency as well as the efficiency of your team or the department overall. I am going to assume you know how to use Microsoft Office products (free and pay) and Google products (free), so those tools — certainly very useful — are not included. That said, if someone asked me to list my ten key technology tools for an in-house lawyer, here they are:
Ten Things You Need to Know as In-House Counsel® 