Advices to law firms from a General Counsel

My better half is a lawyer. She practices in a very narrow field of law but she is exceedingly good at it. Trying to inject some objectivity (an impossible task!) – at times, she has so many clients that she has to say “no” to taking on new clients. (Great, more time for me. (smile))

So, it is timely to read from my friend Mike Dillon, General Counsel of Sun, the following in his insightful blog entry (emphasis mine),

Let me begin by asking – what is the function of the law firm? My view is that law firms serve primarily as aggregators of specialized legal expertise. The premise has been that by combining multiple legal disciplines you can provide “one stop shopping” for current and prospective clients. This structure previously made sense. If you were an individual or business with a legal problem, it wasn’t efficient nor effective to try to identify an individual attorney with the technical skills that you required. So, you would turn to a law firm and rely on them to direct you to the appropriate attorney within their firm to solve your issue. The problem is that this model relies on growth (the need to add additional attorneys) to maintain profitability rather than focusing on efficiency gains. In this respect, it is at odds with what I need as a client and General Counsel.

As with so many things, the Internet is changing this business model. It is getting increasingly easier to move the aggregation function in-house. To find an attorney in a specialized area, I don’t need to turn to a large law firm. Instead, I send out an email to my network of other in-house attorneys or within professional associations like the ACC and get referrals. Not only that, but I get true “customer feedback” that is more objective than what I would get from a firm. There is now a proliferation of materials available on the web – judicial opinions, legal commentary and press articles that also provide information about attorneys.

The result is that we are increasingly able to identify and engage specific legal talent directly. Here’s an example. Like all large companies, we have a certain amount of employment litigation. Almost all of the large firms have strong employment law practices. But, we use a very small firm for much of this work. Why? They focus only on employment law, are very good at what they do, understand our business, get excellent results and are very cost effective. They don’t have the overhead of supporting attorneys practicing in other areas.

P.S. Mike, I hope you don’t mind me calling you my friend. You are too insightful for me to not call you my friend. (smile) And you need some dumb but really nice friend to fill out your circle of friends, right? (bigger smile)

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