"Law firms just don't get it, they spend all their time thinking about transactions and that's so far off the agenda for general counsel right now. What GCs are focused on is risk."

So said an old contact of mine who spends much of their time working with senior corporate counsel. It's hard to argue. Everywhere you turn there is risk for large companies. This week alone has seen HSBC put a $1.5bn (£934m) price tag on its expected fine after falling foul of US money laundering laws. Standard Chartered and Barclays have likewise had costly brushes with prosecutors this year and the Libor fall-out looks only to be getting started.

And consider the other forces at play for GCs: the global push towards tough enforcement against bribery and competition violations; a swathe of new financial services regulation; and the continued impact of the post-9/11 push towards extra-territorial prosecution.

It's a picture well-illustrated by a report commissioned by the World Law Group network, which we cover this week. The research focuses on the attitudes of GCs across 33 countries. Managing risk; re-engineering the legal function; improving internal tech and training; finding ways to integrate with the business. These are the things engaging the 'multi-polar' GCs of tomorrow – not managing their outside counsel.

Do law firms really get this? Doubtful. Following clients via international expansion is second nature to the modern law firm, but whether they are ready to mirror the shift in mindset towards risk is questionable at best. Global law firms remain to a considerable extent deal machines – nothing wrong with that, but the question is whether that is well suited to the legal industry of the early 21st century.

True, there is a lot more imaginative thinking at elite law firms than five years ago, but progress is probably too slow; because clients have already become some of the most dangerous rivals to external counsel. Many bluechips now spend as much on legal services internally as they do with law firms –  a largely unremarked revolution that has swept Western legal markets over the last 25 years. And it's a more immediate threat to law firms than LPOs or Tesco law. At a certain point, multinationals amassing globally diffuse in-house teams the size of large law firms will start forging their own legal production lines in earnest. Judged by this research, that process is accelerating.

Perhaps the biggest warning sign for external law firms is that their response to this risk-heavy, resource-constrained environment is the polar opposite of their largest clients. While law firms long for the deals to return, GCs spy opportunity amid the turbulence. They see a world in which they are more integral to their own employers – and that means law firms have to move down the food chain.