For inhouse legal departments and general counsel, the primary and
eternal question is whether to rent or buy: That is, whether
to hire outside counsel for matter X (renting) or whether to staff
up internally (buying).
Having supervised the annual budgeting process for a large (250
staffers) inhouse legal department, I can tell you that the financial
side of the company will be allergic to increasing "fixed" costs
(hiring/buying), but far less hostile to increasing "variable" costs
(renting/going outside), even if the year-after-year level of those
"variable" costs is utterly predictable—making them,
to my mind, "variable" only in the most Pecksneffian of senses.
How about a third alternative? That’s precisely what the global
investment bank ABN Amro has
found, in league with Clifford Chance. ABN Amro has engaged
Clifford Chance (at its New York, London, and Hong Kong offices)
to train inhouse ABN Amro lawyers in derivatives—a red-hot
practice area where experts are hard to find. Consider the
consequences:
- In-house lawyers, notoriously promotion-challenged, will potentially
gain new career opportunities. - Does Clifford Chance sacrifice the opportunity to do derivatives
work ABN Amro will soon be able to handle internally? Perhaps,
but only at the thinnest of the margin—and do they create
in the process a firmer-than-ever bond with ABN Amro? If
I ran Clifford Chance’s derivatives practice, I’d jump at this. - Why haven’t other inhouse departments pursued such initiatives? Chalk
it up to a failure of imagination.
So consider not-renting and not-buying: Teach, instead.
Even the normally tart and acerbic Catrin Griffiths seems to approve.
