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Consider whether the key partners at your major firms sit on Boards of other companies

“Firms with partners who sit on the boards of directors of corporations that are not their clients are able to charge a higher price than firms without these types of ties.” The authors who pointed out this correlation (Brian Uzzi, Ryon Lancaster and Shannon Dunlap) write in Laura Empson, ed., Managing The Modern Law Firm: New Challenges New Perspectives (Oxford Univ. Press 2007) at 92, from the perspective of embeddedness theory. “In contrast to conventional economic approaches to firm behaviour, which argue for efficient markets and faceless one-shot relationships, embeddedness refers to the fact that the players in an economic transaction do not exist in a vacuum, but rather in a system of social relationships” (at 94). One social relationship for a law firm is Board membership.

The authors analyzed data about billing rates and other factors in light of the number of partners who sit on the boards of companies that are not their clients. The benefit they gain, according to the authors, is that they provide unique information about how boards of directors make decisions about hiring outside counsel, giving law firms an advantage in the marketplace with corporations who are their clients.”