January 6, 2005

In the Hitchhiker’s Guide to the Galaxy, one theory is now famously established; it is that the answer to “Life the Universe and Everything” is 42.

This, as I am sure you have often deliberated, poses some very interesting issues for the legal profession. Let me explain.

It is probably common ground (although I can think of one or two law firms where this would not apply) that all lawyers on the planet Earth comprise a subset of “Life the Universe and Everything” – a small subset obviously but one of some significance to themselves and to their families – perhaps even to some of their clients and businesses as well.

Leaving aside the possibility that lawyers are not a life form at all and therefore outside of the definition, I think it is also reasonable to propound that as a subset of the Hitchhiker’s Guide theory the answer to “Life the Universe and the Legal Profession” will be less than 42.

(Please keep in your mind that this is just a 1000 word article and therefore I do not have time to get too metaphysical. I appreciate that it is possible for the answer to be greater than 42, even 42 itself. For now I am making the assumption that the answer will be less than 42 and for those of you who want to argue that my assumption is flawed, well please don’t).

So, if the answer is less than 42, what might it be? What is the value of a lawyer?

This next bit gets technical but let me offer a few thoughts.

A top in-house lawyer working for a major company in the UK will, for the most part, be valued by their non-lawyer colleagues on a set of criteria that will obviously include legal expertise but only as one of several indicators of value (and probably not the most important factor either). The other criteria will be:

- Ease of use
- Empathy
- Being part of and not separate from
- Finding workable, cost effective solutions
- Insightfulness
- Knowledge of people and process within the business
- Delivering on time, on budget
- Keeping commitments
- Helpfulness

My personal view is that these factors (which, together with legal expertise make a total of ten different characteristics of excellence) can be used to help develop what is in effect a profile of the ideal in-house lawyer resource.

From this it is possible to develop a hypothesis to calculate what value looks like and to represent this value as a number – A Value Coefficient (VC):

In my proposition the perceived value derived from employing an in-house lawyer is the sum of each of the ten criteria for success (see above), divided by their “competency gap” times an experience multiplier (EM).

As an equation, therefore, it looks like this:

The sum of 10 competencies

VC = _______________________________________

The sum of the 10 competency gaps x EM

Let’s work through an example. A non lawyer colleague in the employer business is asked to score the company’s General Counsel out of one hundred on each of the ten competencies.

The results are as follows:

- Ease of use – 60
- Empathy – 70
- Being part of and not separate from – 70
- Finding workable, cost effective solutions – 80
- Insightfulness – 60
- Knowledge of people and process within the business – 60
- Delivering on time, on budget – 50
- Keeping commitments – 60
- Helpfulness – 70
- Legal knowledge – 80

Therefore a total of 660 out of a possible 1000.

The competency gap is simply the difference between the actual score of the General Counsel and the perfect score of one hundred, thus in our example:

- Ease of use – 40
- Empathy – 30
- Being part of and not separate from – 30
- Finding workable, cost effective solutions – 20
- Insightfulness – 40
- Knowledge of people and process within the business – 40
- Delivering on time, on budget – 50
- Keeping commitments – 40
- Helpfulness – 30
- Legal knowledge – 20

A total competency gap of 340

The experience multiplier in the equation is designed to reflect the fact that the more senior the lawyer the more weight should be given to their competency gap. The EM thus has a low end of 1.1 and a high end of 1.5; an EM of 1.5 would indicate an experienced general counsel while an EM of 1.1 reflects a recently qualified lawyer.

The effect of the EM therefore in the calculation is to exaggerate the competency gap for the more experienced lawyer. This reflects their greater cost but also allows for a fairer comparison between lawyers of greater and lesser experience where a similar competency gap will be more or less concerning.

Based on these numbers we can now calculate the Value of this in-house lawyer:

VC = 660 divided by (340 x 1.5)

Or, put another way VC = 1.294.

This number is the Value Coefficient for the lawyer; but what does it mean?

Four points are worth making:

- The perception of a competency gap is an important and measurable matter that can be tested and retested over time to demonstrate improvement (hopefully) and to target areas for particular personal development. The more interviews that are undertaken with business colleagues, and the more frequently the exercise is repeated, the more credible the data will be. It is obviously based on perception and therefore prone to some emotional skew, but as I keep saying, frankly, who cares what the reality is if the perception is not addressed.
- While the Value Coefficient is clearly somewhat of a crude indicator it is also very easy to understand. It allows one lawyer’s perceived value to be compared to another lawyer’s perceived value; or for a lawyer’s value to be targeted as something to improve year on year.
- It is also a genuine soft skills measure that is capable of being used as a key performance indicator. For many in-house lawyers this will be a most welcome development in the face of all the hard measures that are used and which only ever seem to revolve around cost, headcount and project deliverables.

Finally, as can be seen, the value coefficient is less than 42 – a modest contribution to Life the Universe and Everything and to a well loved Hitchhiker’s theory.

Time now for a long lie down in a dark room.

© 2024 LBC Wise Counsel. All rights reserved