Three reasons from Brackett Denniston of GE to keep work inside the legal department

The general counsel of General Electric advocates doing more work within the law department than did his predecessor. Setting aside the skeptical inquiry – “How do you measure this statement?” – let’s take on the three advantages he states, very clearly, for doing legal work in the law department.

His three reasons, set out in Met. Corp. Counsel, Vol. 16, Aug. 2008 at 1, are that “you have more control over the quality, more control over the efficiency with which the work is done, and the people who are doing the work are closer to the business and the issues in the business.”

Quality means that you can assign the best person (or persons) to the issue and they can work on it until they are satisfied with the result. Law firms may find that their lawyers who know an area of law are already committed to other clients and can’t help sufficiently. Also, given high billing rates and a smidgeon of concern about costs, law firm partners may not unleash the dogs of law to bill until they are satisfied.

Efficiency means that the time and money devoted to the legal issue more closely corresponds to the importance of the issue to the company than if a law firm handled it. Firms have marketing agenda, training needs, internal politics, revenue goals, malpractice concerns, and other diversions and detours that may encrust their work and drag down its efficiency.

Closer to the business and its issues means that inside counsel can more readily match the legal solution and the effort to reach it to the commercial realities – such as profit and loss or customer retention – of their business manager clients. Outside lawyers can’t as intimately know the ins and outs of people, processes and profits in a company.

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