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A link between more specialists in larger departments, more innovation, and legal cost control

A piece in the Economist, March 3, 2012 at 16, connects size of companies and creativity: “Size allows specialisation, which fosters innovation.” In my long-running series of discussions on why larger companies have less spending (in proportion to their revenue), I haven’t cited this link.

It makes sense. A specialist, more likely found in a larger law department, will be able to come up with new ideas more frequently than a generalist lawyer. The generalist, more common in smaller departments, struggles just to cover the basic points of an agreement or transaction that is unfamiliar. An expert moves swiftly beyond fundamentals and can devise improvements. All those small or large innovations pay off in lower legal costs as departments grow larger and can sustain specialists.

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