Big Companies Starting To Pin Point Small Firms

Finally – it’s happening.  Big companies are started to wonder why they should pay $600 an hour to fly their regular biglaw counsel from New York or L.A. out to Buffalo or Kalamazoo to litigate a case, when they can just as well retain local counsel for a fraction of the price – and better service to boot.  This trend of large corporations broadening the pool of law firms that they retain, instead of just hiring from a select few is called pinpointing and Larry Bodine of Legal Marketing Blog blogs about it here.

As Larry describes, the trend amongst big corporations had been “convergence” – to try to consolidate all of their work in a handful of full service biglaw firms, usually located in large cities.  But the large firms weren’t getting any cost savings; instead, they found that big firms were charging blended rates for all services provided, which could still amount to $500 or $600 an hour.

But that’s changing now.  As Larry writes:

So corporations in 2005 began
seeking out litigation boutiques in Buffalo, rather than fly their
[pricy] megafirm lawyer up from New York City.  Big Companies began hiring
local specialists, who charged local rates, to handle local problems in
Baton Rouge.  After a while, I began to notice that lots of little
firms everywhere are getting work from titanic publicly-held companies.

A general counsel can save a lot of
money with Pinpointing, and get nice personal service to boot from a
little firm.   Those little firms give the big companies the red carpet
treatment.  And the mega law firms will always be fat and happy (the
rich always get richer) because the federal government will always do
something like sue IBM for 10 years, or break up ATT and cause the Baby
Bells to wage legal warfare ad infinitum.

This is
great news for small firms with local litigation practice.  But not
everyone agrees with Larry that pinpointing is happening – and he takes
up the opposing view here.