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Does law firm pedigree matter?

Posted by: Laurence Simons 16/10/13

There are times when pedigree matters. If you've told your daughter you're buying her a pure-breed husky for her birthday and instead rock up at the house with a cross between the dog from Lady and the Tramp and Pearl the Wonder Dog, she might be disappointed.

On the other hand, pedigree dogs suffer from serious health problems because of their narrow gene pool and can have a tendency towards aristocratic disdain, whereas mongrels take a more democratic approach to their friendships and generally have adorable little faces.

For law firms, until relatively recently, having a sterling pedigree tended to ensure you were sure of getting business when in-house lawyers and general counsel (GC) needed to go external.

Magic Circle and biglaw organisations were seen as having a patina of respectability, earned because of their previous successes and large incomes.

However, a recent survey of general counsel at 88 major companies conducted by AdvanceLaw found this may no longer be the case, reports the Harvard Business Review.

The results suggested in-house lawyers are increasingly happy to move high-stakes work away from the most pedigreed law firms - such as Cravath in the US and Linklaters in the UK - instead looking to more boutique or specialised outfits.

Expertise was not the biggest factor in changing GCs minds, though - that was cost.

Some 74 per cent of respondents admitted they would be more likely to use a good lawyer at a smaller firm than a similar professional at a pedigreed firm, assuming a 30 per cent difference in overall cost.

Another reason for this cultural shift is that top legal talent is now more widely dispersed, with top-tier firms no longer picking up the cream of the profession as smaller companies find new ways to remunerate and reward their best performers.

Fundamentally, in-house lawyers need to pick the best firm for their business, rather than relying on reputation to ensure they get good external advice.