In-House Counsel

How we can think about and define the notion of a ?primary law firm?

By Rees Morrison

As the term is typically used by members of a law department, can we define ?primary law firm? (or variations such as ?preferred counsel,? ?key law firm?, ?go-to firm,? ?major law firm? and the like)? What makes a firm primary is typically the absolute amount paid to it during a year or over several years. The amount cut-off amount varies depending on the total spend of a law department so we should normalize the metric: a law firm is a primary law firm if it receives in a fiscal year more than 10 percent of the law department?s external spend.

A better definition would designate as a primary law firm one whose spend bulks that large over at least two years. With that longer time, the firm that works on a single large lawsuit or acquisition will less likely be deemed primary.

A different definition incorporates the idea that a firm that handles a very large portion of the work in a given practice area is a primary law firm. Listings of go-to firms by law departments come closer to primary law firms in this sense. Perhaps a cutoff should be that 50 percent or more of the spend in a fiscal year (or two years for the same reason explained above) for a practice area makes a firm a ?primary law firm.?

These two aspects frame how law departments and their observers should describe their most significant external counsel: percentage of fees over two years and percentage of fees in a practice area over two years (See my post of Sept. 16, 2006: primary law firms and client service meetings; May 18, 2007: internal relationship managers for primary law firms; Dec. 8, 2006: core team of lawyers at primary law firms; Dec. 16, 2007: GM designed diversity targets for 6 of its 500 law firms; Nov. 2, 2006: worry if your primary firm sets billable hour targets; Dec. 8, 2006: DuPont and surveys of its 38 Primary Law Firms; Jan. 10, 2008: requests that are fair only for primary law firms; Oct. 4, 2005: loyalty to primary firms; and March 6, 2007: precarious hold of ?lead law firms.?). Beyond primary, some firms exert too much influence on a law department (See my post of Dec. 6, 2006: influential law firms.).

Full post as published by Law Department Management on March 23, 2009 (boomark / email).