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Intervention by law departments in the operations and economics of law firms

Every requirement of a law department to some degree changes how its law firms operate. Monthly billing on each matter, to mention one trivial example, influences a firm’s timekeeping, accounting, and billing.

More significantly, aggressive law departments can demand significant changes in the operations of their law firms. In various postings I have alluded to the topic of how far law departments might go to intervene materially in their firms’ management – to the point of altering professional judgments and even affecting profits.

“Use associates with lower billing rates in lower-cost cities” (See my post of June 15, 2006.);

“Do not charge me for first or second year associates” (See my posts of Feb. 8 and April 30, 2006.);

“Only allow these few lawyers to work on our matters” (See my posts of Nov. 8 and 15, 2005.);

“Raise billing rates only if your lawyers have gained sufficient experience on like matters” (See my posts on March 12 and May 26, 2006 about different rates according to value delivered.);

“Team up with another firm or a vendor” (See my post of Dec. 5, 2005 on virtual firms.); and

“Keep teams to partner, associate and paralegal” (See my post of March 29, 2005.).