- In-house lawyers and external lawyers are competing for corporate work.
- Insourcing of legal work by clients is growing due to the high cost of outside counsel and the growth of in-house counsel with a combination of legal and commercial expertise and understanding of the client’s needs.
- External lawyers need to provide value for money.
- In-house counsel and external lawyers can benefit from greater collaboration, clear articulation of the objective of the legal work, developing innovative ways to charge for legal work and project management.
Insourcing and the ‘make or buy decision’
Traditionally, a ‘make or buy decision’ is the act of choosing between manufacturing a product inhouse or purchasing it from an external supplier. A firm will choose to produce more goods internally when the costs of doing so are not outweighed by the benefits of sending production outside the firm. Equally, buying functions externally results in some loss of oversight and control.
Applied to legal services, the ‘make or buy decision’ means choosing between having legal work completed by in-house counsel or purchasing it from an external supplier, usually a law firm. However, the external supplier could also be a barrister or a document review company.