When a new general counsel comes from a law firm, how fares the former firm fare?

Sorry, no answer to this. The question came to me as I considered a client of mine where the recently appointed GC had been a partner at a major firm.

I wish someone could study a number of law departments that hired a GC from a firm the department had been using. Then, compare the payments to the former firm for the two years before the GC arrived to the fees paid in the two following years. Wishing for such data, I can nevertheless anticipate some outcomes.

First, fees rise, because the GC trusts that firm, knows the strong partners and associates, and feels a natural affinity for the firm.

Second, fees drop, because the work that partner had been doing no longer has him or her to do it, and therefore the work might come inside – to a small degree – or there is not as capable a replacement at the former firm.

Third, fees drop because other firms rush in to market to the new decision-maker, and they both offer attractive arrangements and the GC wants to bend over backwards not to show unseemly favoritism to the former firm.

Fourth, fees drop because the former partner left the firm out of dissatisfaction with it.

If I were a betting man, I would put my blue chips on fees rising.

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