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When can you justify hiring another lawyer?

For years, I have said in speeches that if a law department can foresee $400,000 or more a year being spent on outside counsel in an area of law, it should consider hiring a lawyer inside. 

I think that statement is supportable, but there are more nuances.  Cost management is not the only goal.  You need quality lawyers and they need to keep busy at work appropriate for their value.  There may be headcount constraints that moot the qualitative argument.  The person needs to report to somebody and that may cause complexities.  Perhaps the economic terms with the law firm can improve. 

The rule of thumb serves as a trigger for thinking about substituting in-house talent for outside counsel, but it leaves unanswered harder questions underneath.

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