Big-firm lawyers may think they have all the answers, but some of the biggest innovations affecting large firms have originated outside the large-firm world, with in-house counsel and nonlawyers. In the eighties, Earle Yaffa—then a consultant at Arthur Young & Company—signed on as managing director at Skadden, Arps, Slate, Meagher & Flom. In the process, he brought a corporate mindset to firm management and kicked off the "C-suite revolution"—the army of chief marketing officers, chief operating officers, and chief revenue officers that followed. More recently, Cisco Systems, Inc., general counsel Mark Chandler and Pfizer Inc. general counsel Amy Schulman have pushed for abandonment of the billable hour in favor of flat fee arrangements. Looking forward, the future belongs to such innovators as legal process outsourcers Sanjay Kamlani and David Perla, founders of India's Pangea3, and Sir David Clementi, the British accountant whose reform of the United Kingdom's legal regulatory system has led to the first outside equity investment in British law firms.

Pfizer Inc.
New York
Under this GC, Pfizer went all out to embrace flat fees for its outside counsel.

Skadden, Arps, Slate, Meagher & Flom
New York
Skadden's Yaffa set the mold for today's C-suite professionals.

The Clementi Report
The accountant who brought transparency to the U.K. legal system.

Cisco Systems, Inc.
San Jose, California
In Silicon Valley, an early evangelist for fixed fees.

IMF (Australia) Ltd.
Bringing third-party litigation funding to Australia — and the world.
The American Lawyer
New York
In 1985 Brill had an idea: Why not rank U.S. law firms by financial performance, just like public companies on the Fortune 500? Brill's innovation, The Am Law 50 (eventually expanded to 200 firms) rocked the secretive world of large law firms. While some say the rankings corrode firm culture — encouraging lateral movement, overemphasizing partner pay, and discouraging lockstep—there's an upside: increasing the transparency of a powerful, multibillion-dollar industry. "If you take [private] enterprises and report which work most efficiently and productively," Brill told The American Lawyer in May 2012, "you're enhancing the marketplace."
New York
When Mark Harris was an associate at Davis Polk & Wardwell in the 1990s, he decided that the pyramid structure of law firms—a broad base of associates and a small set of partners—was outdated and inefficient. In 2000 Harris, along with Stanford MBA Alec Guettel, cofounded Axiom, an alternative legal services business that allows clients, including such companies as Cisco Systems Inc. and Google Inc., to "insource" Axiom attorneys or "outsource" legal functions to Axiom itself. Axiom's business model has disrupted the industry by allowing clients to pay a fraction for services that had been performed by outside firms.
General Electric Company
Fairfield, Connecticut
Before Ben Heineman Jr. took over as general counsel at General Electric Company in 1987, in-house counsel were seen as "Rolodex lawyers," farming out most of their work to outside counsel. Heineman changed that, peppering GE's legal department with partners from such firms as Baker & McKenzie and Williams & Connolly. Many of them went on to the executive ranks of companies like Home Depot Inc., Pfizer Inc., and Tyco International Ltd, among others. By luring all-stars to GE and assigning them demanding matters, Heineman proved that in-house work was worthy of top-notch talent.


Mumbai and New York

If your document review is being done in Mumbai instead of Minneapolis, that's probably due to the efforts of Sanjay Kamlani (pictured) and David Perla, founders of the legal process outsourcing firm Pangea3. They were pioneers in persuading U.S. law firms and law departments to shift their commodity legal tasks to India. Two years later, Thomson Reuters Corporation bought them out for an undisclosed sum (India's Business Standard newspaper estimated it at $40 million). The size of the Indian LPO market that Pangea3 helped create is expected to grow to $1.1 billion by 2014.

Baxter Healthcare Corporation

Washington, D.C.

For Marla Persky, chief of litigation at Baxter Healthcare Corporation in the early 1990s, the reasoning was simple: Women were suing her company for its allegedly toxic breast implants; female lawyers should be the ones to defend the company. At the time, that strategy—one of the first to put women at the helm of high profile cases—was unorthodox, but Perksy pursued it anyway, decreeing that every trial team must include a woman. "It was a very clever and progressive move," says Zoe Littlepage, who represented plaintiffs in the litigation. Effective too: Baxter went to trial 25 times, winning 18 defense verdicts.

Cocreator of L.A. Law

Los Angeles

Cocreator of television's L.A. Law, Steven Bochco added gloss to lawyers' daily grind, demonstrating that one person's job is another's entertainment. The workplace drama, which aired for eight years starting in 1986, was built around a diverse group of lawyers at a small general practice firm. This depiction—including female rainmakers, cases for junior lawyers to litigate, hours for interoffice romance—is credited with inspiring many Gen Xers to go to law school. "After doing [gritty cop show] Hill Street Blues for five years, I thought that a law firm in Los Angeles would be a wonderful environment: upscale and colorful," Bochco says.

Above the Law

New York

Ever since David Lat, a former New Jersey assistant U.S. attorney, founded Above the Law in 2006, firms have changed the way they operate, forced to assume that every internal memo will become public. Lat's blog publishes a mix of gossip, commentary, and news for a readership of about 900,000 unique visitors a month. Associates at large firms use the site to compare salaries; the blog is also known for breaking news on firm layoffs. Regardless of one's opinion of Above the Law's sometimes-snarky tone, one thing's clear: At firms, what happens behind closed doors may not necessarily stay there.



In the shift of legal research from books to computers, there was no larger force than the first nationwide electronic legal information service, LexisNexis. And in bringing that technology to the desks of lawyers everywhere, there was no bigger champion than Jerome Rubin. The former corporate lawyer started working on what would become LexisNexis as a consultant for the database's creator, Mead Coporation. In the early 1970s, Rubin suggested that Mead market it first to lawyers on Wall Street. Today LexisNexis is a staple of law of­fices, placing 1 billion legal news documents and 36 billion public records at their disposal.

American Corporate Counsel Association
Washington, D.C.

As general counsel of Xerox Corporation in the late 1970s, Robert Banks Sr. moved a big portion of the company's legal work in-house, cutting its outside legal costs by nearly 50 percent and showing GCs elsewhere how to strengthen their hands vis-a-vis outside counsel. To wield their newfound clout, in-house lawyers sought cohesion, so Banks went on to help found the American Corporate Counsel Association, the leading organization in the in-house world, in 1982, and was elected its first president. The group, now called the Association of Corporate Counsel has a current global membership of more than 30,000.