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Subservience risk of decentralized in-house lawyers compared to “independence” of outside counsel

The critics of structures where lawyers report to the head of a business unit – decentralized reporting – stress the risk of those lawyers’ loss of independence. The pressure to please your boss, the allegiance the lawyer feels toward their business, the bonus that depends on the business meeting its numbers – all these compromise professional integrity and insidiously cause the lawyer to “go native.”

The retained partner, by contrast, can stand up to legal wrong-doing, ask the tough questions, protest the shredding, and if the client persists in retrograde behavior, resign. Not being on payroll and needing a job, outside counsel stands strong with objectivity and independence.

The critics raise a valid concern, to be sure, but I note countervailing points. The inside lawyer knows the business and its managers much better than can any outside counsel, and being in the next office is at least in a position to spot and re-direct early on an improper decision. As for outside counsel, if Global Corp. is your biggest client and your “$2 million a year in billings,” if it is the client that made you partner the determinant of your year-end distribution, isn’t that realistically the same pressure as the inside lawyer with her job; neither lawyer gives that up without enormous pressure, efforts to rationalize, delay and hope, and huge personal difficulty. When a partner has a concentrated basket of business, the large client compromises that partner’s professional integrity.

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