Insights about huge law firms, publicly-traded law firms, their profit margins, and commercial “nous” all appear in one item in the Economist, Aug. 23, 2008 at 55. Vast revenue at huge firms. Baker & McKenzie brought in annual revenues of more than $2 billion (See my post of Feb. 20,…
What if there were qualified purchasers of legal services, something like what I understand to be a qualified purchaser of securities? My vague memory from the hallowed halls of Columbia Law School is that under certain circumstances if you meet legislative requirements of experience, savvy and wealth, some investor protections…
The listings of “who represents corporate America” give a broad-brush sense of which law firms big law departments favor. Much more revealing would be data on proportional amounts spent on those firms. It is fine to list Big Firm A, Mega Firm B, and Prestigious Firm C as your go-to…
For insurance companies, moral hazard means “the tendency of policyholders to change their behavior, such as living on floodplains because their prospective flood losses are lowered due to their flood insurance coverage,” according to Richard B. McKenzie, Why Popcorn Costs so Much at the Movies (Copernicus Books 2008) at 35.…
Yes, it is expensive to have junior lawyers doing your work at $5 a minute and partners clocking at $10 a minute and higher. But have billing rates and the magnitude of legal risks companies face risen proportionately? Any answer to this question founders on our inability to assess legal…
When Pfizer shrank ten law firms to one firm to handle all its employment related work, “all existing employment cases were transferred to the firm [Jackson Lewis] except for one single-plaintiff case and two class actions.” This baton-passing is reported in Corp. Counsel, Vol. 15, Sept. 2008 at 84, and…
The billing rates of lawyers in the gigantic firms of the Rim (the coastal megalopolises, Chicago and Houston) are often much higher than the rates of even very large firms elsewhere. A telling quote in a profile of Anne Chwat, the general counsel for Burger King Holdings, Corp. Counsel, Vol.…
Anne Chwat, the general counsel for Burger King Holdings, explains in a recent profile how her department selects outside counsel. She cites expertise as a crucial factor and then says that “we examine not only the credentials and ethical reputation of the law firm, but also the background and expertise…
While writing my article about alternative fees that recently appeared in the New York Law Journal, I thought about some of the ethical pressures of billing arrangements that are not based on chargeable hours. Both law firms and law departments face these conflicts. Fixed fees permit law firms to enjoy…
In some consulting projects I have spoken with partners at the primary firms of my client law department. The hope has been that they will identify aspects of the law department that can improve. Usually, however, what the partners say disappoints me, because they never take the gloves off. As…