Rising Demands on In-house in a Bad Economy
And suddenly the question to the in-house legal department becomes, whycan't you do the work? Why do you needto hire outside counsel? And then the big law firms that get hit first bycompanies keeping work in house in a time of recession. So we're seeing thatand I'm seeing that on the ground, you know as we speak.
That's one thing and I'll also introduce as you pointed out this phenomenonof biglaw and biglaw salaries is a relatively recent phenomenon at leasthistorically. I think in the 80s as you mentioned when these firms startedmerging together and becoming big and starting to go global, they were doinglarge Wall Street transactions, right?
That's when the M&A mania and you know modern day robber barons, etc., yousee from the Wall Street the movie with Gordon Gekko, etc. Lawyers I think were valued for that andcould charge because the transactions were big and the deals were fast.
And I think that’s when they said, weprobably could get paid a little moreno one would care, but now that's clearly not the case and if you're talkingabout big companies, it kind of doing general business not investment banks. Why do I need to pay all this amount of money and probably the advice I can get from a less expensive firm or the advice I can get just if I keep the work in-house should in a lot of cases may be good enough.
Reinventing the In-house Legal Department
In modern times, the legal expertise we have still resides in a logic spentextend outside the company in certain law firms, which requires a rethink andlooking back to our reason for existence.
Well as an in-house lawyer, am I making myself somewhat redundant orobsolete or making less reason to have lawyers if we're using more technologyand finding permanent fixes to process problems at the company. You're providing more value, you’re building more trust and you're being useful and useful people generally don't put themselves out of a job. They find their management and their partners find other things for them to be useful at and fix.
So this is all to say that fixing problems and finding long-term changesand fixes to problems is a good thing. And if you don't do it, if you don'treinvent yourself constantly, reinventing yourself as a legal department and becoming more strategic, and actually putting yourself in a very risky situation as a general counsel. You need to actually be proactive and this is also a part of what the expectations are of a legal department and that it's not just that lawyers should proactively go out and become more strategically minded and find ways for them to be able to provide more value to the business.
That's what they want. They want lawyers to speak their mind and tell themwhat the risks really are and tell them how to and be involved in transactionsat an earlier stage right rather than being always reactionary.
On Being Proactive
Among people from your most lowly paid employee and your smaller suppliersto the biggest customer or a government agency who was coming after you becauseof your market share you have to deal with all these conflicts of relationships,and guess what? Lawyers have been doing this for thousands of years. We deal with relationship between people andyes, we know how to read and write the law. We know the law inside out we know how to spot issues.
We know how to hopefully marshal the facts but in today's age of big dataand data driven world, I would argue that we need a lot of catchup work becausewe lawyers as a whole as a group are not in touch with data and the facts. We have to argue is really more for us to plug into the business organization to be part of the pipeline to the data source so that we can help our purpose to make these decisions. Otherwise we will always be at the proverbial bottom of the cliff dealing with the aftermath of issues and it's a very negative cycle.
We should arrest that and turn it into a more virtuouscycle when we deal with the issues. Wewould not be out of the job because there will always be problems and mistakesand I think its the notion that the ambulance is never going to be out of a job. But in addition to doing that we can makethat life easier getting a lot of the issues up front and to the point of being a more appreciated part of the organization rather than just a cost center.