My previous post discussed best practices and applying data analysis to questions of law practice and practice management. Subsequently I read an article by Ben W. Heineman, Jr., former General Counsel of General Electric. In Big Isn’t Always Best in Corporate Counsel (Nov 2008) he explores reasons why “One-stop shopping at giant global firms isn’t necessarily wise.”
I know the arguments favoring mergers – scale, cross-selling, follow our clients, etc – but have never seen good data to support the assertions. The questions he raises about why big firms may not be the best solution for many problems dovetails nicely with my assertion that lawyers need to stop operating on instinct and start paying attention to facts.
He raises enough questions about BigLaw that it should cause managing partner contemplating mergers to pause to collect the empirical data and asses it carefully. His questions include:
– Does globalization create higher costs?
– Do higher costs (and increased risk) pressure lawyers to bill more hours?
– Why do firms view productivity so narrowly in terms that benefit firms but not clients?
– How can giant firms avoid a large “mediocre middle”
– Will accounting rule changes that require deals to be expensed increase sensitivity to cost?
– Can conflicts be resolved and managed?
Heineman practically invented the the role of the modern GC and built the GE law department into one of the best. He does not present data but given his historic role, I’ll treat his assessment as sufficient to rebut undocumented presumptions of the value of mergers and shift the burden of proof back to the merger proponents.
So law firm management consultants, do you have the data to support that mega-mergers really make sense? Don’t be shy. We know that behind every big merger lies one or more consultants. Or are you just telling your clients what you know they want to hear???