If globalization were pushing law departments, they would be de-converging law firms

As companies do business in increasing numbers of countries, it follows that they will need to hire law firms in some of them. Convergence of firms – the deliberate use of dramatically fewer law firms – must then give way to de-convergence – a larger roster of firms retained. Likewise, if legal complexity has increased, which presents another consequence of globalization, it likely brings with it a need for more specialties and thus firms – another blow to convergence.

The shift upwards in absolute numbers of law firms retained does not necessarily entail a reduction in concentration of spend. A law department might well spend three out of every four of its dollars on outside counsel with the handful of firms it pays the most. It could retain dozens of additional firms and not shift that proportion. In the jargon of statistics, the tail grows longer as you de-converge, but the focus on a few key firms can stay just as strong (See my post of Nov. 20, 2006: linear relationship between number of firms retained and size of law department.).

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