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Big Business Is Dumping BigLaw
After writing here Monday about Richard Susskind's predictions for the future of legal services and the importance that multisourcing will come to play, I heard from Bloomberg legal reporter Cynthia Cotts, who wrote a story this week that is right in line with what Susskind said.
The story, "Wall Street Lawyers Dumped for Lower-Priced Boutiques," says that greater numbers of U.S. companies are following the lead of DuPont Co. and adding firms with 300 or fewer lawyers to their rosters of outside counsel -- saving as much as half compared with what they would pay larger Wall Street firms. "At a time when general counsel are looking for alternative billing arrangements, the playing field has been leveled, so smaller firms can make pitches to big clients that would have fallen on deaf ears before," DuPont General Counsel Thomas L. Sager told Cotts.
No question, companies still turn to the old standbys for those bet-the-farm cases. More and more, however, they are turning to mid-sized and even small boutique firms to handle their outside work. But interestingly -- and here is the part that fits squarely with Susskind's comments -- work is not being doled out on an all-or-nothing basis. Rather, companies are breaking it up into parts and sending the parts to different firms based on the firms' abilities and fees. Cotts' story refers to it as stratification of work:
Loren Brown, co-head of DLA Piper’s product-liability practice, said clients trying to control costs without sacrificing quality are encouraged to "stratify" the legal work, matching DLA with smaller regional firms that have skilled lawyers and lower costs. An experienced litigation boutique, for example, can help a big firm handle mass-tort cases, Brown said in an interview.
DLA, the 11th highest-grossing U.S. law firm, often works with New Orleans-based boutique Irwin Fritchie Urquhart & Moore LLC, Brown said. The 38-attorney firm handles document review, scientific review, depositions, expert witnesses and trials, said Quentin Urquhart, a partner at Irwin Fritchie.
This sounds very much like Susskind's description of legal work being broken into its component parts and doled out to various providers. Jeff Coburn, a consultant with Coburn Consulting in Boston, told Cotts, "Once these smaller firms have been discovered, there is going to be a bifurcation of the work. The complicated stuff will continue to go to the big boys, and all the other stuff will go elsewhere." The work will be more than bifurcated, I can hear Susskind say. It will be multisourced. What does BigLaw have to say about that? Here is the answer Cotts got: "Representatives of the 10 highest-grossing U.S. law firms ... declined to comment on competition from smaller firms." Silence can say volumes.
Posted by Robert J. Ambrogi on April 8, 2009 at 11:37 AM | Permalink
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