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Are you one of your primary firms’ top 50 percent clients?

Tony Williams, a consultant in Britain, has a view on concentration of clientele by large law firms. Quoted in Legal Week, Vol. 9, Nov. 2007 at 5, he states that “’Most big firms now rely on their top 50 to 100 clients for 50% of their work’”. His point is that the firms “are very jealously guarding these clients” and are concerned about new work that might trigger conflicts of interest. In his view, although general counsel in different industries care in different degrees about conflicts, “clients are being more hardnosed about conflicts.”

As to whether conflicts policies of law departments are tightening, I know of no quantitative research on that point, but I do know from consulting that general counsel are realists who understand the complexities of large firms, they want to retain strong firms, so they need to be pragmatic and flexible.

My other observation is that law departments ought to concentrate their spending on law firms – on the order of 75 percent of their spend going to 20 percent of their firms – and that this effort parallels, for similar reasons, the comparable effort of law firms to concentrate their client revenue list.