Law firm panel: Difference between revisions

{{drop|T|he image of investment}} banks as docile, harnessed sauropods, munching stupidly away in the unwitting service of a higher caste of pan-dimensional superbeings seems far-fetched. But so does the idea of wheat bending the staggering intellect of humankind towards its merest biological ends, but that is what evolutionists would have us believe.<ref>others are still offering odds that thus is a deterministic crock, but that is another story.</ref>

Could these masters of the universe really be so feckless as to be in the thrall of [[legal eagles]]?

Do not dismiss it out of hand. Banking is riven with contradiction. That such devoted apostles of laissez-faire should instinctively organise themselves into Marxist dictatorships should tell us something is not right.

The law firm panel, we submit, is another.

What looks like a case of the apex predator taming, husbanding and cultivating a subordinate species for their own ends: penning them in, fattening them a bit — in any case maximising their yield, wringing from the marrow of their tired bones a concentrated extract of value out of all proportion to their cost of carry — is nothing of the kind.  

It seemed that way for wheat, too. Only no-one, as far as JC knows, ever hired the wheat to run the wheat harvesting operation.   

Yet this is just what corporations have done. These are enterprises who, thirty years ago, barely ''had'' a legal department. Our [[history of in-house legal]] refers. What started out as a guy in a cardigan filling [[slavenburg]]s and authorising powers of attorney grew like topsy. What was one became five became, by the financial crisis, five hundred. Legal departments, conceived as a means of exercising operational control, began needing it themselves. In-house departments began acting like a fifth column for the law firms they were meant to be managing.  

Every now and then an upstart banker asks an impertinent question:  

{{drop|“W|}}e have a legal department numbering twelve hundred. That is about the size of Herbert Smith. All told it costs us half a billion. Yet we are still blowing ten figures a year on external legal firms. Can someone explain this to me?”}}

The “law firm panel” arrangement springs from an observation — investment banks spend an awful lot of money of legal fees — coupled with that unavoidable trope of modern commerce: ''scale is everything''.

Picture the scene: an enterprising fellow in the [[Legal operations|legal COO]] team has pulled 5 years’ of legal spend, totalled it, and used the AVERAGE function in Ex. cel. It generates this no-brainer:

“We spend £750m a year on external legal across 1,500 firms at an average run rate of half a million quid each firm.<ref>Do not for a moment think this is an exaggeration.</ref> ''This is insane''. If we concentrated that on say ten firms — even a hundred — we could dramatically reduce our administrative costs and [[leverage]] our scale. If we guarantee firms £50 ''million'' in billings we can push down their hourly rates, commit them to a programme of rolling [[secondee]]s, have them run our annual training programme. That way we could cut our overall spend by 30% and get more [[legal value]] than we get right now.}}

This logic being unimpeachable, an action plan is implemented without ado. The pathological impulse to shower good money randomly over a myriad of anonymous law firms will be controlled. Order will be restored.

There will be a colossal multilateral