Contingency theory and its applicability to legal departments

The essence of contingency theory is that the value of management practices depend on the contingencies of the situation. What happens in a legal department is not the inevitable working out of predetermined linkages and rules but rather depends on all kinds of factors that are, well, contingent.

The “it all depends” theory may sound simplistic, but assessing the contingencies on which decisions depend and their relative influence can be very complex. Many management academics explain their findings in terms of contingency theory and try to identify and measure the conditions under which things will likely occur. In terms of law departments, one example might be to study which is more important and to what degree, as between otherwise similar departments with many paralegals and those with few.

A contingency is a relationship between two phenomena. If one phenomenon exists, then a conclusion can be drawn about another phenomenon. For example, if a larger number of paralegals allows more delegation so total inside costs decline, then that is a contingency. The outcome of hundreds of practices regarding outside counsel depend on so many variables that the theoretical explanations of contingency thinking will be inevitable.