According to the latest annual Altman Weil survey of general counsel, cost control has surpassed compliance as the number one concern of GCs for the first time since Sarbanes-Oxley was enacted. The pressure to reign in outside counsel fees is enormous. Taking more work inside is the most effective way to battle the law firm beast, but most legal departments are not going to expand headcount. Conditions are ideal for new model law firms that provide high caliber talent on-site to corporate legal departments, offering the holy grail combination of law firm quality without law firm cost. I offer some history and an assessment of this alternate path for attorneys who want to find their way in-house.

History
Conditions facing general counsel remind me of the early 1990s, when the dreaded phrase “hiring freeze” was common among corporate legal departments. Three entrepreneurial women with real vision in the 1980s created the first three boutique temporary staffing firms offering attorneys and by 1990 they had the right idea at the right time. Shelley Wallace of The Wallace Law Registry, Lesley Friedman of Special Counsel, and Lisa Turano of Co-Counsel all understood that with careful recruiting and screening, they could provide attorneys with top shelf credentials to companies on an assignment basis or as adjunct long-term staff.

Fortune 500 companies welcomed flexible legal staffing that did not add to headcount. At first, law firms rejected the concept completely. However, success led to a much different long-term outcome. Law firms finally accepted the economic benefits of this service and became the biggest user of temporary attorneys–also known as contract attorneys. Since law firms use contract attorneys almost exclusively for low end document review work, staffing firms adjusted their focus to meet that demand. Volume, rate pressures and the nature of document review work led to a major decline in the pedigree of professionals who were willing to take these assignments. Almost overnight, attorneys came to think of legal staffing firms as employers of last resort.

The Present
Today new players are creating a quality based service alternative for companies. The pioneer receiving the most attention, including a July 2, 2008 feature story in The Wall Street Journal, is Axiom. A multi-office firm that projects $66 million in 2008 revenue, Axiom boasts an impressive client list (see “The rating Game,” July 2008 to read how eBay uses Axiom.

Axiom's attorneys go on-site to handle sophisticated projects or work long-term alongside existing in-house staff. However, Axiom wisely avoids phrases like contract attorney or temporary attorney. Instead, Axiom leads a pack of emerging entities marketing themselves as an alternative to traditional law firms. The essential element to Axiom's success lies in offering attorneys with impressive name brand law firm pedigree.

In Boston, a company called OutsideGC is taking a different approach with its new model law firm. OutsideGC has recruited a roster of experienced in-house attorneys–many of them from the technology sector–and markets them primarily to emerging companies that do not yet employ in-house counsel. The service offering is compelling for CEOs and entrepreneurs who can get the best of both worlds–experienced on-site legal help while cutting down outside law firm fees.

In Chicago, I am launching a firm called ELS Senior Counsel. My recent column “The Aging Workforce” noted that the pyramid structures of legal departments leave many senior attorneys unemployable in traditional counsel positions when their companies downsize or get acquired. Countless readers reached out to say that my analysis rang true and I touched a very sensitive nerve. Some senior in-house attorneys may fit well with the mission of new model law firms.

Evaluating the Career Opportunity
While attorneys on assignment are beginning to make sense again for legal departments, let's look at new model law firms from the candidate's perspective. If you are seeking an in-house opportunity, does it make sense for you to call Axiom and other emerging players in this space?

The answer is maybe, if you can get in the door. Axiom and its ilk must focus on pedigree, as that is the only way to get general counsel comfortable with using them. For cost comparisons with traditional law firms to work, new model firms must offer attorneys who are as qualified as the lawyers who are already being used by the client company. So, many excellent attorneys will not pass the pedigree test and they will be rejected without an interview.

For the subset of attorneys who fit the new model firm hiring criteria, here are your pros and cons. The first pro is money. These firms are paying $100 and up per hour to its attorneys. Contrast this pay with the $30 to $50 per hour most legal staffing firms pay for low end document review assignments. New model law firms are not competing with staffing firms for the lower end work. With this pro comes a con. Compensation only reaches $200,000 and up if your new model firm can keep you busy on quality assignments. For primary income earners who need to work full-time, joining a new model firm may not be a viable option yet.

Uncertain workflow is not a con for everyone, however. For attorneys who seek flexibility, these firms are ideal. Perhaps you are a second income earner who wants to take time between assignments for other pursuits. Perhaps you have accepted a nice financial package to walk away from your company, but you are only in your 50s and still want to work. Other pros include variety of work and some insulation from corporate politics.

The main con is resume risk if you are mid-career. It is hard to predict how your resume will be viewed five years from now after tenure with a new model law firm. If these firms can build reputations for quality, and assuming your resume already has a pedigreed foundation, then you should be ok when applying for many in-house positions down the road. In fact, enlightened employers should view your variety of in-house assignment experience in a favorable light. But even the best new model firms are not brand names yet, so the resume entry will confuse some potential employers and traditionalists may view the entry negatively.

Although new model firms may only make career sense for a small percentage of candidates, the pedigreed talent pool is large enough to supply the attorneys. Therefore, those new model firms with the discipline to stay snobbish on credentials will be very successful. Unlike staffing firms of the 80s and 90s, these new players are positioning themselves to compete with traditional law firms. They have no interest in becoming suppliers of document reviewers to law firms. So, once again corporations have a real alternate service option when addressing daily legal needs. Once again, attorneys have another route to getting real work in-house.