Big Law Might Be Down, But the GC is Riding High
Every profession needs big thinkers, and in-house lawyers have Ben Heineman Jr. on the job. In response to a recent New York Times DealBook column by Andrew Ross Sorkin, Big Law Steps Into Uncertain Times, the former general counsel of General Electric Company penned The Rise of the General Counsel for The Harvard Business Review, adding an in-house point of view to Sorkins overview of the business of law.
Heineman, who is currently a senior fellow at Harvard's Law and Kennedy Schools and an occasional contributor to Corporate Counsel, notes that Sorkin fails to discuss one of the most important developments of the last 25 years: the rise in the role, status, and importance of the general counsel and other inside lawyers employed directly by the corporation.
The ex-GC identifies two critical trends for major companies in the U.S. that have made a companys top in-house lawyer so important in the contemporary business world:
- The general counsel, not the senior partner in the law firm, is now often the go-to counselor for the CEO and the board on law, ethics, public policy, corporate citizenship, and country and geopolitical risk.
- There has thus been a related, dramatic shift in power from outside private firms to inside law departments.
In addressing point No. 1, Heineman writes, The general counsel is now a core member of the top management team and offers advice not just on law and related matters but helps shape discussion and debate about business issues. This shift in status, coupled with the need for more in-house specialists in litigation, labor and employment, IP, and other practice areas, has contributed to making the quality of general counsel [rise] dramatically over the past two decades, according to Heineman.
The power shift in point No. 2, he says, has created a new dynamic in which inside lawyers have broken up monopolies that particular private firms had previously enjoyed with particular corporations and outside firms are often required to compete for business.
The migration of power into the GCs office has meant, according to Heineman, that in-house counsel have forged new leadership and cooperation with firms on matters and fostered new competition and control on money.
In Sorkins NY Times piece (which is part of a larger special section on Big Law trends), he identifies the collapse of Dewey & LeBoeuf and the rise of less-expensive legal services companies like Axiom Law as key drivers of the new legal ecosystem. Sorkin writes that change cannot come soon enough. Clients are unhappy, feeling overbilled and underserved. Lawyers are similarly miserable, feeling underpaid and overworked.
But the pessimism that Big Laws legions of outside counsel may be feeling is, according to Heineman, offset to some degree by the pendulums swing toward the in-house attorney. He writes that while there is a crisis in private firms, at the same time that there has been increasing growth, prestige and pay for general counsel and other inside lawyers, adding, in what seems like a direct address to Sorkin and his fellow Times reporters, No report on the the uncertain times facing big law should ignore the rise of inside counsel.