Technology and the General Counsel

An Above the Law  post a short entry by Zach Abramowitz that argues that in-house counsel are gaining power because they are making decisions about what technology to buy. He is right about this in some respects. True, law firms are not the major players in tech. True, law firms are using technology to improve profit margins. But, his analysis is incomplete. The problem that law firms face is much deeper than he suggests. He thinks that the law firms are protecting the billable hour and that managing partners view technology as contributing to unbundled legal services. But, a more significant contribution is one that is endemic to the partnership form. The fact is, the partnership form does not support long-term capital investment. Partners, most of whom are approaching retirement, would rather preserve capital to fund their imminent retirement. This is an important point, ad Abramowitz is right to say that it favors lawyers in corporate structures. But, perhaps what it means is that its time to rethink  the preferability of partnerships to  corporations as the structure for legal service providers. Other countries, notably the UK, have already allowed corporations to provide lawyering to clients. It may be time to allow it here too, if the US law firms want retain their leadership in the profession.

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