Law Department Management Blog
If one thing costs more than another, similar thing, that fact alone “turns on the neurons in the medial orbitofrontal cortex, an area of the brain associated with pleasure feelings.” Eduardo Porter, The Price of Everything: Solving the mystery of why we pay what we do (Portfolio/Penguin 2011) at 20, 253. Wine, for example, tastes about the same to average drinkers who are not told costs – they like the more expensive wines, when told, even if “prices” are assigned randomly!
The same attraction may hold with expensive law firms or lawyers (See my post of Feb. 17, 2008: research on wine extrapolated to costly firms; and Oct. 19, 2008: neuroscience predicts we will favor expensive firms.). Moreover, well-known firms, those with prestige cachet, also may excite that pleasure area of the brain. The conjunction of prestige and pleasure does not necessarily mean in-house counsel retain firms irrationally, since prestige often correlates to quality. But it does mean that a purely rational calculation of which firm to hire may be hijacked by primitive neural biases.