TaipeiMort wrote:I can't speak to litigation jobs, but I think that OP and other doom and gloomers (may) fail to realize that a significant value-add performed by corporate attorneys is really a CYA function for big business. Large companies have already brought in-house the corporate law functions which may not harm market cap (e.g., licensing, compliance, HR/benefits). However, no corporate manager wants to be blamed for problems sourcing from a botched S1, a missing disclosure, missed asset issue on in M&A diligence, or failed series A round. For example, Walmart recently lost 8 billion market cap in a day because of a recent compliance error that they should have outsourced to outside counsel. None of these services are efficient, or optimally priced. However, corporations are going to continue to pay huge premiums so that the C-level execs can tell the board that they paid DLA, so it isn't their fault. Look at management consulting firms. They really perform a CYA function first and foremost, but no one wants to axe them because this CYA function is worth huge amounts to management. Therefore, big business is really just stuck in a huge prisoners dilemma with the legal industry.
Also, a lot of firms have already self-corrected the fat issues. They have cut excess associates, and are hiring a lot more on the basis of need out of the lateral market instead of expectation in the entry-level market. I was having a discussion with a managing partner of a major vault corporate firm. He stated that they have forecasted the elimination of the billable hour, and are purposely staffing leanly on projects so that the younger corporate attorneys are prepared to be paid on a project basis instead of billable hours.
I agree with all of that, but it is also not just that. There was a recent article on the economist about how the consulting industry has been booming. It is not just about the insurance that having an outside firm look at the problem, it is also that in an increasingly complex world, you need specialized knowledge that you cannot afford to keep us staff. You hire McKinsey because a problem has arisen and your staff is not specialized/has experience in solving that type of problem, whereas McKinsey just did that type of work for your competitor.
In the law setting, a firm that goes to the capital markets once every three years is probably not going to keep as staff people that specialize in capital market transactions, because two out of those three years they will be doing nothing and will not be developing any expertise.
Or a firm that completes a merger once every three years will in a similar manner not keep M&A lawyers for three years on their payroll. GE on the other hand, who has to do their taxes every year, does not mind having a huge tax department. Same to an extent applies to insurance firms.
This is really the reason why corporate firms continue to exist as separate entities.
Ps, the elimination of the billable hour seems naive to me. You want your lawyer to advise you of the risks, and generally contingency projects provide for incentives to try to finish the project so you get paid even if not ideal/not fully risk assessed, particularly in transactional context.