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In the wake of Powell Goldstein's merger with Bryan Cave, Atlanta's in-house lawyers have this question in mind:

"What about our rates?" asked Jennifer Hill, senior counsel for Place Properties, a developer of luxury apartments for college students and military personnel.

Atlanta-based Powell Goldstein announced this month that it will merge with St. Louis-based Bryan Cave, creating a global firm with 1,165 lawyers and combined 2007 revenue of $602 million.

Many in-house lawyers fear that mergers like the Powell Goldstein deal will place increased pressures on hourly rates and minimum requirements at the new, larger firms. They are watching the developments with cautious concern.

"Everyone is wondering how it will affect rates when they will have, maybe, more overhead and we may have fewer options to choose from," Hill said. "Also, it might make it more difficult to control quality when you have these firms merging."

For GCs, an important strategy for getting their work done within their corporate legal department budgets is to be able to pick and chose from a variety of sizes and types of law firms, from boutiques to giants. "It should not be one size fits all. All that variety should continue to exist," said Robin H. Sangston, vice president and associate general counsel, Cox Communications Inc. "I wouldn't want to see only giant firms that do everything at much higher hourly rates and not have the small to mid-sized options."

Sangston said one of her law firms, which she did not want to name, had a bad experience with a merger and later undid the deal. "It was a small to mid-sized specialty firm that merges into a very, very big white-shoe law firm. As soon as they merged, their rates went up, their hourly requirements went up, and I started getting marketed," she said.

Instead of continuing to call on the firm when needed, she began having senior partners call her wanting to make presentations for additional services. "There was so much pressure on rates and hours, they ended up merging back out and merging with a smaller specialty law firm."

The financial realities of the current business climate combined with the merger trends have sparked worries among corporate clients. "With this economy, I would be concerned that they would jack their rates up and end up ruining what had been a good thing," Sangston said.

Regardless of what happens to rates in the near future, in-house lawyers expect to see more mergers and growth in firm size.

"I do think it's likely that we will see further law firm consolidation similar to Powell Goldstein's merger with Bryan Cave," William M. Muller, vice president and regional counsel for Turner Broadcasting System Latin America Inc., said in an e-mail from Buenos Aires, Argentina. And ultimately, the trend could be a stabilizing influence.

Said Muller, "The trend toward mega-firms with an international -- as opposed to strictly domestic or regional -- presence and a more diversified practice means that they are ultimately better equipped to handle economic downturns than smaller ones. This is particularly true when the slack in one area of practice -- say, mergers and acquisitions or corporate finance -- is capable of being offset by an increase in work in another, such as restructuring or business-related litigation."

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