Biglaw, In-House Counsel, Litigators, Partner Issues

Inside Straight: Do Clients Insist On One-Stop Shopping?

Is it true that corporate clients are looking for "one-stop shopping" from their outside counsel? In-house columnist Mark Herrmann discusses.

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I was recently asked to write an article about the future of Biglaw. (That’s one of the benefits of writing this column: Writing yields more opportunities to write. Like first prize at the pie-eating contest.)

I naturally asked some Biglaw acquaintances what they saw in their firms’ futures, in an effort to generate some grist for the article’s mill. (Given that I occasionally write in unbelievably awkward, and arguably unintelligible, mixed metaphors — such as “grist for the article’s mill” — it’s a wonder that Lat even permits me to continue writing this column, let alone that others solicit me to write in other fora. But that’s neither here nor there.)

What do my Biglaw lunch dates (and others whom I pester) say about their futures? They say many things, but one common refrain about the future of Biglaw is “consolidation. Big law firms will continue to merge, and only the biggest will thrive.” When I ask why firms will feel compelled to grow, folks often say: “Clients insist on it. Clients want one-stop shopping.”

What clients? Any real ones, or just theoretical ones? I, at least, don’t insist on one-stop shopping. . . .

Let me first wear my litigation hat. When my corporation hires a firm to defend a piece of litigation, do we insist on one-stop shopping?

I’m not even sure what that means. For a big case, we identify a lawyer we trust who’s appropriate for the matter, and then we call the guy (or gal). That’s “retaining the right lawyer in the right case.” It has nothing to do with one-stop shopping.

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For many big law firms, that should end the discussion. Like happy families, all big firms are alike (in at least one respect): They insist that they don’t want to handle “commodity” work, including commodity litigation. Big firms want only to handle the “premium” matters, which will justify the firms’ rates and overhead. If other in-house lawyers retain counsel for “premium” litigation the same way we do, then attracting those cases has nothing to do with a firm’s ability to provide one-stop shopping.

Obviously firms must have the capacity to handle matters for which we retain them. If a particular case will require a small army of lawyers, then the firm must have a small army of lawyers available. Or, alternatively, we must be able to divide the work among different providers — multiple law firms, or document review outfits, or whomever — to do the work. And if we had a set of related cases pending in multiple jurisdictions (which I rarely confront in my in-house life, but frequently saw when I defended mass torts in private practice), then it might be helpful (although hardly essential) if a single firm had offices in several of the cities in which the cases were pending. But it would be extraordinary litigation indeed that caused me to fret about whether a firm had offices in Paris, Hong Kong, and Mexico City, in addition to a bunch of domestic offices. Even if a matter had some overseas tentacles, so long as our main litigator’s firm could play nicely in the sandbox, we could retain local counsel in other jurisdictions where we needed local help.

On the litigation side of the house, one-stop shopping appears to my eye to be relevant to only one thing — extracting wholesale pricing discounts from law firms. If a client wants to rope together a set of cases — all product liability litigation with exposure less than $5 million; all European employment litigation; or the like — then it might be easier to negotiate an alternative fee arrangement with a firm that had offices in, say, the states where your product liability litigation most frequently arose or the European cities in which you had offices. But if big firms were true to their word, big firms wouldn’t want that routine, commodity work sold off for discounted fees; firms want only the premium work, which is unlikely to be aggregated and sold off this way. One-stop shopping shouldn’t attract anything that big firms want to catch.

So much for my litigation hat. What about my transactional hat?

Ha! Just kidding! I don’t wear a transactional hat. (I don’t even think I own a transactional hat, but I’ll root around in my closet.) I’ve never held myself out to the world as a deal lawyer, so I’m flying blind here. (That’s plainly never stopped me before.) My Biglaw acquaintances say that it’s easier to do large international deals if your firm has offices in all of the countries involved. Perhaps that’s true, although I’d instinctively think that creative lawyers could assemble a team of smaller firms located in the relevant cities. And it’s hard to buy the usual line about how “it’s easier to work with my colleagues overseas than it is to work with people at other firms.” First, give me a break: If you’re at a big firm, you don’t even know your colleagues overseas. You met that guy in Taipei by phone last week when you were retained for this deal; he ain’t your bosom buddy. Second, if you worked at a smaller firm that regularly did deals with Taipei tentacles, then you’d know a lawyer at some great, small Taipei firm as well as big firm lawyers know their partners. Third, sophisticated corporations rightfully mistrust law firms’ cross-selling of partners overseas, because sophisticated corporations realize that partners may feel duty-bound to cross-sell their own firm’s services, even when those services aren’t worth buying.

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So where’s the market demand for one-stop shopping? Do Biglaw litigators feel actual (as opposed to vague, theoretical) demand for one-stop shopping? Do transactional lawyers feel a demand that I’ve overlooked in my ruminations? Or does the demand exist in some other area — international tax advice, maybe? — that I’ve simply overlooked?

As always, I’ll be delighted to be educated by my readers — perhaps even readers possessing grist for the article mill.

Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at inhouse@abovethelaw.com.

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