Compartmentalized legal work raises legal risks

E. Norman Veasey and Christine T. Di Guglielmo, in “The Tensions, Stresses, and Professional Responsibilities of the Lawyer for the Corporation,” Bus. Lawyer, Vol. 62, Nov. 2006 at 1, discuss compartmentalization and decentralization of legal departments (at 33).

The authors introduced a new idea for me: compartmentalization of legal work. The authors look askance at practice:

“The administrative decisions to spread legal work in discrete units over a large group of different lawyers and firms (compartmentalization) should focus on whether or not add to what extent this practice may inhibit the lawyers’ ability to identify issues and solve them will bring them to the attention of the appropriate corporate agents. An individual lawyer or team of lawyers that is assigned a single piece of the complex deal may not know enough about the transaction’s overall structure to recognize problems.”

If legal work on a complicated matter – think of off-the-books financings – is split among too many lawyers, none can see the forest for the trees, and illegal logging can flourish.

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