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4,000 law firms managed by one legal department!

On June 27, 2011, Legal Strategy Rev. of CPA Global published an interview of Helen Gillcrist, Vice President and Manager of Enterprise Legal Services at Liberty Mutual. Gillcrist joined Liberty Mutual in 1981 and soon took a senior role in the law department, becoming perhaps the first law department administrator. Today, Liberty Mutual’s legal department employs more than 700 lawyers spread over 65 offices.

Actually, that is but a part of the insurance company’s legal entourage. “Our panel is slightly fewer than 1,000 law firms strong, but we deal with about 3,000 to 4,000 law firms because many of our customers specify that they want to use a particular firm.” Six years ago Gillcrist became responsible for the department’s policy and strategy for all these legal expenditures – managing its outside-counsel spend. According to the interview, members of her group “find the firms, negotiate the rates, audit the work and deal with any performance issues.”

If non-practicing lawyers do that much, what is the role of the in-house lawyers beyond directing the work of the firms? Given all this, how could there be much resistance to the substantial involvement of procurement?