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In this way the great retrenchment of in-house legal began, and for ten years kept pace. Much low-hanging fruit was picked. But eventually, legal spend was collared, and opportunities to eek out cost dried up. | In this way the great retrenchment of in-house legal began, and for ten years kept pace. Much low-hanging fruit was picked. But eventually, legal spend was collared, and opportunities to eek out cost dried up. | ||
===Digression: the dogma of cost control above all else=== | |||
Note the narrative sweep here: industrialisation. ''Scale''. ''Control''. ''Margins''. The approach to the problem of legal comes from a particular viewpoint. ''The accountant’s''. It is quantification, not evaluation, and it is focussed on one dimension alone: ''[[Cost - waste article|reducing cost]]''. The question is never what to do, or why to do it, but how cheaply to do it. The full beam of analytical, reductive rigour is trained on that single question: ''how can we do all this for less and less money''? Focus has become laser-like on the [[delivery of legal services]]. How they should be delivered, with what tools, out of which segments, at which cost. | |||
Now management orthodoxy has understood for decades that it isn’t [[Cost - waste article|cost]], but [[waste]], that is the problem in a distributed manufacturing process: raw materials do cost money. You do have to pay machine operators. At some point you can’t avoid the basic minimum costs of doing something properly. Rather, you rigorously test your processes to check you ''are'' doing it properly — and not ''over''doing it by wasting raw materials, overengineering, having your staff standing idle or engaging them in wasteful activity. The people at Toyota were very analytical about [[Toyota Production System|the types of waste you should eliminate]] in the 1950s and 1960s, and beat the American auto-manufacturers to a pulp. | |||
None of this addresses the difficult questions the credit crisis plainly posed. | But when the costs are so big, it is really hard not to obsess about them, in the abstract, in the round, as a thing in themselves. Especially if you are an accountant, and you don’t understand the manufacturing process that accounts for them anyway. | ||
One last digression before we move on: Toyota’s [[lean production management]] technique works best in “tame” environments where all dependencies are mapped and all possible outcomes known. Where your environment is “[[wicked]]” — imperfect data, non-linear interactions, convex risks — you need three things that are generally designed out of production lines: expertise, flexibility, and redundancy. | |||
In a perfect world, [[legal eagle]]s are at their best in purely wicked environments. You consult them when things go wrong, your normal assumptions don’t work and you don’t know what to do. But in the ''actual'' world, all environments — even factories — are a mix of wicked and tame components in some portion or other. In banking, the trade-off is between product development and tail-risk management on one hand — wicked problems — and scaling and monetising products on the other — tame problems. We can assess the lawyer’s value on the tame axis quite readily, and that is largely by ''how well she can keep out of it'': how can she standardise, simplify and de-complicate business-as-usual legal processes so it requires as little explanation to the muggles as possible and to what extent can she map out predictable legal processes into decision trees and playbooks and [[operationalisation|hand them off to an operations team]] (or, at the limit, automate them) altogether. | |||
The other, [[wicked]] part of the lawyer’s day job — one humbly submits, the ''important'' part — is a ''lot'' harder to evaluate, and is ''impossible'' to evaluate if your only prism is ''cost''. | |||
Which brings us neatly back to the question of legal operations and what is really wrong with the legal department. If you accept these premises, it will be apparent that mea None of this addresses the difficult questions the credit crisis plainly posed. | |||
==What’s ''really'' wrong with in-house legal== | ==What’s ''really'' wrong with in-house legal== | ||
Now acres of ink have been spilled, books written, monographs published, thought-pieces floated, on the problem of ''how to fix in-house legal''. [[LinkedIn]] is awash with them; all in awe of technology’s current gallop; their mundane propositions all clothed in expressions of the richest finery. The operating theory: legal is profoundly broken, always has been, but, since we have some new | Now acres of ink have been spilled, books written, monographs published, thought-pieces floated, on the problem of ''how to fix in-house legal''. [[LinkedIn]] is awash with them; all in awe of technology’s current gallop; their mundane propositions all clothed in expressions of the richest finery. The operating theory: legal is profoundly broken, always has been, but, since we have some new ki t, [[this time is different|''this time is different'']]. We can rebuild it. We have the technology. ''We have the capability to make the world’s first bionic legal department.'' Better than it was before. Better, stronger, faster. | ||
But, friends, the problem is not technological, it isn’t new, and it doesn’t require vision. It is rather dreary and age-old. It is easy to state, if not fix: | But, friends, the problem is not technological, it isn’t new, and it doesn’t require vision. It is rather dreary and age-old. It is easy to state, if not fix: | ||