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The sole-lawyer department as outside counsel conductor

According to top of mind, Vol. 5, 2006 by Kirkpatrick & Lockhart Nicholson Graham at 10, ADVO, a $1.5 billion direct mailer, has only a single in-house lawyer: Vice President, Legal Affairs, David Hennessey.

At revenue approaching two billion dollars, a US company typically houses three-to-eight lawyers. Evidently, management of ADVO has decided that the primary role of its sole corporate lawyer is to filter nearly all legal questions and services and have the sole lawyer in the company direct them to outside law firms. This structural model works, but admits no simple judgment as to its relative efficacy.

The model allows great flexibility in finding the right lawyer for a particular matter and makes legal costs almost completely variable (See my post of Feb. 18, 2006 on fixed and variable costs of legal services.). It keeps outside counsel competing for the favor of your work. It minimizes the complications of employees. It allows internal clients to work directly with law firms, with no mediation by a law department.

On the downside, there is no internal successor to the sole lawyer (See my post of July 31, 2005 about succession planning.). The model also depends hugely on the motivation and abilities of the one conductor-lawyer (See my post of April 16, 2006 on stress and solo lawyers.). Further, per-hour costs and motivations are different for outside lawyers than for inside lawyers. It may also prove hard to build institutional knowledge with outside counsel (See my post of March 15, 2006 about institutional knowledge in law firms.).