Around the world, some in-house legal departments are beginning to wonder what their expertise is worth outside the company.
A legal consultant in Australia claims a group of insurance underwriters has considered establishing its own “captive law firm” that would serve its needs as well as other similar clients. And a British construction company is allowing its in-house legal department to offer low-cost services to other companies in the same industry.
George Beaton, executive chairman of Beaton Research and Consulting, toldThe Australian that it is only a matter of time until other in-house legal departments follow suit, creating a new model for legal services that could devastate existing law firms.
“Our modelling shows their [existing law firm] profit per equity partner will halve within a decade,” Beaton recently told the country’s largest daily newspaper. He couldn’t immediately be reached for further comment.
