To drive down law-firm costs, rubber must meet the road (incentives for individual lawyers)

Inside lawyers have very little individual incentive to reduce the amount paid to the law firms with which they work. It is a principal-agent clash (See my post of Jan. 16, 2006 on this concept; but see my post of Aug. 27, 2005 on Waste Management and its lawyers hewing to their budgets.). The threat to lose their job just isn’t credible. Let me overdo some metaphors to drive home the point that general counsel may need to hit budget, but the underlings care little or not at all:

Lawyers at the coal face dislike digging at bills, questioning time and levels, challenging disbursements — ore otherwise. That effort is the seamier side of managing outside counsel; it’s the pits.

Lawyers in the trenches don’t want to fight with the law firms they rely on, especially hand-to-hand about costs. That is going over the top, to put it trenchantly.

Lawyers on the firing line don’t want to shoot the lawyers they like, respect and need. Nit picking guidelines trigger a bad reaction and is no ones targeted task. Tell them to aim elsewhere and they will say “bulls-eye!”

Lawyers who tote that bale hate heavy-duty responsibilities to lighten fees and like to be able to offload to law firms. While the sun shines, make hay not budgets.

Figuratively speaking, if you expect Chris Counsel to be galvanized into cost-cutting effectiveness, that
spark won’t arc the gap.

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