IBM blurs the line between inside and outside counsel with its “virtual firm” of retirees

Supporting the prolific IP department of IBM is a corps of nearly 100 retired IBM lawyers who practice as freelancers. This arrangement appears in Corp. Counsel, Vol. 16, June 2009 at 77. That army of former in-housers made me wonder whether IBM treats their costs as external counsel or as internal. I assume external, but the line blurs.

IBM’s $103.6 billion in revenue supports a reported 580 lawyers – 5.6 lawyers per billion. If you count two-thirds of the retired IP lawyers who pitch in, on the assumption that many of them work part-time, that would add about 65 lawyers, driving the lawyers per billion up to 6.2.

IBM likes how the arrangement has worked out and wants to expand it to other areas, such as contracts. Other legal departments can emulate the practice: allow retired lawyers to continue working as legal consultants (See my post of Jan. 30, 2006: Purdue hired 18 former employees and trained them to do work that junior lawyers and paralegals normally handle.).

One more point of note: IBM’s legal team created a “back-office hub” of recent law graduates who do lower level work. That initiative sounds almost like they have in-sourced a contract lawyer pool.

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