The Truth on the Market Blog had a nice post last week on the growing trend of corporations performing legal work in-house rather than hiring private firms. The post commented on this ABA Journal article.

The ABA Journal article opens:

Fed-up with “sky-high” fees at outside firms, Jones Lang LaSalle general counsel Mark J. Ohringer says he now spends 75 percent of his budget on non-law firm resources.

“I’m law firms’ biggest competitor,” Ohringer said during a program at the 2011 Futures Conference on Friday, “and I don’t think they see it that way.”

Jones Lang, a global real estate and investment management firm, has boosted its in-house capabilities by 60 lawyers in the past few years, and Ohringer says he won’t hesitate to add more as the company’s needs increase. Speaking at the conference held at Chicago-Kent Law School on the future of the legal profession, he noted the average cost to employ an experienced in-house lawyer—easy to come by these days given the tough legal job market—is $125 an hour, a bargain compared to many firm rates.

My Take:

You can’t blame corporations for wanting to spend $125 an hour on in-house lawyers as opposed to $500–plus (at times) on outside lawyers. I agree that this is a growing trend that will cause further erosion to the legal market. I can’t really say whether this trend is good or bad for the lawyers who end up working in-house who otherwise would have been in private practice.

On the downside, many lawyers will make less money working in-house. On the plus side, much of the pressure associated with private practice will be eliminated. You could make a case that the trade off is worth it. Particularly when you consider the fact that you don’t see many in-house or public sector lawyers who are eager to move to private practice. Many of these lawyers feel like they have a quality of life advantage.      

Unfortunately, this is an understandable trend that is particularly harsh on Mississippi lawyers, since there are few major corporations with headquarters located in Mississippi. This trend would have been less troublesome looking for Mississippi lawyers about 15 years ago when we had more Mississippi-based corporations.