Retrograde effects of institutional knowledge

Law firms that have served a company for a while fulsomely tout their “knowledge of the company.” Law departments that favor a firm always point out how the firm “knows our company and our people.” Indeed, and all to the good, perhaps.

The nagging doubt has to do with whether familiarity breeds contempt, or its less virulent cousins rigiidy and complacency (See my post of Dec. 16, 2005 on partnering and risks of complacency.). The rigidity cloud comes down to whether close familiarity blocks creative thinking: “We can’t imagine doing it differently.” Complacency pillows both sides in a comfortable status quo. Then too, years of embeddedness may blur the lines for a law firm between rendering legal and business advice. I even wonder whether historical ties with a law firm stunt the development of in-house talent: “X partner always handles this work, so why should I bother to learn it.”

Entrenched law firms, in other words, may not be an unmitigated blessing (See my post of Feb. 15, 2005 about incumbent disadvantages.).

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