Chapter § 1.01 Introduction

• Jurisdiction: United States
• Publication year: 2020

§ 1.01 Introduction

The era of law firms automatically counting on continued business from their top clients, even those clients they considered their crown jewels, is over. So too is the era of law firm partners making strategic decisions in litigation without meaningful input from in-house counsel. The economic conditions following the downturn in the late 2000s had a dramatic, and quite possibly permanent, impact on the legal economy. As used here, “legal economy” refers to the relationships between law firms and the institutions that comprise their client base. One of the most significant changes brought on by the economic downturn has been a shift of power from the major AmLaw 200⁴ law firms to their clients. Specifically, control has shifted from law firms to corporate legal departments where the influential views of the executive suite, and their desire to reduce legal spend, are directly reflected.

Legal departments have always regarded their legal expenses as a cost of doing business—sometimes, a quite unmanageable one. Plus, in the past, law firms did not put much effort into managing clients’ legal costs. But firms’ attitudes on managing legal expenses changed with the shrinking demand for legal services during and after the financial crisis of 2007 and 2008. Law firms have become keenly aware that their client base could shrink overnight if they fail to manage legal fees. Consequently, clients’ complaints have gained traction, and law firms are now forced to follow the lead of those who pay their bills. Indeed, in-house lawyers have challenged once standard charges in legal bills, from travel costs to new associates’ billing hours, and law firms have listened.

It is now clear that the old model—in which law firm partners called the shots and clients listened—will never return. Law firm partners must respect the perspective of in-house counsel supervising litigation with the utmost seriousness or risk losing the client.

At a roundtable in 2009,⁵ six in-house litigation attorneys discussed their corporate experience...