In the decade prior to the collapse of Lehman Brothers, an excess of work masked the corrosive effect to law firms from competition with increasingly sophisticated and growing in-house legal departments (C&I teams). Post-Lehman, the economic downturn has exposed significant structural challenges to overstaffed law firms, which have been ruthlessly exploited by C&I to decisively shift the balance of power in favour of clients. Nevertheless, the triumph of in-house, measured by its rapid growth and ability to wrest increasingly complex work from law firms while simultaneously squeezing them on rates, may prove to be short-lived. Over time, the dramatic changes in the staffing and provision of legal services, themselves largely driven by C&I, will create an environment as pernicious to in-house lawyers as to their law firm cousins.
Parasitic symbiosis: the rise of in-house
