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[[Big law]]’s neat evolutionary trick big here is to ''weaponise'' the [[agency problem]]. It does this by imposing structural intermediation between those who instruct the lawyers, and those who ultimately pay for them. | [[Big law]]’s neat evolutionary trick big here is to ''weaponise'' the [[agency problem]]. It does this by imposing structural intermediation between those who instruct the lawyers, and those who ultimately pay for them. | ||
In an organisation big enough to have its own legal function this is straightforward enough to describe. The decision to instruct a law firm (a corporate agent) — what | In an organisation big enough to have its own legal function this is straightforward enough to describe. The decision to instruct a law firm (a corporate agent) — what it is required to do and how much it should be paid for doing it — is handled by the legal department (staffed by human agents), but paid for, ultimately, by shareholders. If the legal department is evaluated for the quality of its counsel management at all, it will be impressionistically, and its performance is unlikely be reflected in the Christmas bonus.<ref>Trading, another human agent, may complain about the legal bills’ impacting on her PN and therefore ''her'' Christmas bonus, but it won’t be an item on the agenda at the AGM.</ref> | ||
But in bigger organisations this disintermediation becomes ever more baroque. Once a firm appoints a bank to advise it, all bets, and controls, are off. Here is the scenario: | But in bigger organisations this disintermediation becomes ever more baroque. Once a firm appoints a bank to advise it, all bets, and controls, are off. Here is the scenario: | ||