Monday, October 06, 2008

Randy McClanahan on Legal In-sourcing

In my world, there's nothing better than when a client writes something intellectually provocative. Not only does it make my life at Stem easier, but I get completely energized by it.

Case in point this morning, Randy McClanahan over at the Contingent Fee Business Litigation blog used my ACC value challenge post as a jumping off point for his concept of Legal In-sourcing.

The idea, or at least my understanding of it, is that rather than sending legal work off-shore to India or another country, or to outside firms with their 'infrastructure', that companies with in-house legal departments take that work back in-house. Back where legal staff have a substantial and vested interest in both work quality and in the final outcome.

Randy's argument is that companies engaged in large-scale complex litigation often choose their service providers based on getting the right lead or trial lawyer. And that choice, he warns, can come with a heavy price tag -- a pyramid of hourly-billing lawyers and support staff that can skyrocket the cost of litigation.

His alternative is the basis for a new service designed to help General Counsel manage in-house legal departments, and called appropriately litigation in-sourcing.

The idea is that routine tasks such as document production, discovery, investigation, and research should be brought back inside the company. The law firm, in turn, works in an advisory role helping track the case throughout its life-span; and if the file goes to court, the company has a trial lawyer with 30 years experience ready and waiting.

Especially during this tough economy, I think Randy and his partners at McClanahan Myers Espey are in a good position to raise some eyebrows here. Given Randy's background, I'd also say he has the big firm pedigree to garner some attention.

I find this service, and MME for that matter, fascinating on a number of levels. It's a slightly different take on value billing, especially when paired with the firm's heavy use of contingent fees. It's also consistent with the firm's business model to create relationships where they share litigation risk with clients. And a big part of being in that 'risk-partner' role is matter management and minimizing expenditures.

It's also tough to argue that work executed by in-house legal staff isn't a bit empowering. That work which remains closer to clients might receive a higher level of care.

This is not to be critical of hourly or flat-fee billing. As I've said before, billing choices are often situation dependent. I can also see positives to legal outsourcing. Ron Friedmann's recent breakdown on the reasons and economics are persuasive. More that I'm a big advocate of choice and innovation for legal services, and I have to admire that this service seems to expand both elements.

The fact that it comes from a client? Simply makes for a better Monday...

Labels: ,


Post a Comment

<< Home