"Convergence" is Over. "Pinpointing" is IN.

For years now we've been hearing about corporations cutting back on the number of law firms they use in a trend known as "convergence."  Often it was referred to as the "DuPont Model." 

You can stop worrying about it now, because it's over.

The new trend is "Pinpointing" or "Cherrypicking."  This is the opposite of "convergence," and it's where big corporations keep detailed lists of "approved counsel" all over the country and hire them for specific purposes. 

I know this is happening because I'm seeing it happen now.  I get into many law firms, advising them on business development, and find that no in the firm is concerned about convergence.  Instead, they're all trying to get onto those approved counsel lists.  For example, I talked to a partner from a 3-attorney firm in a mid-sized East Coast city and their two big clients were major US auto makers.  They only did one particular area of law for the mammoth auto companies.  But note: this is a three-lawyer firm working for two Fortune 10 companies.

In my opinion, convergence was a failure for corporations.  The Big Companies didn't save any money using the DuPont Model.  Sure, they winnowed down their list of 200 law firms down to 5 law firms.  But the lawyers demanded to get all of a company's legal work, charged blended rates so that the handling lawyer would probably be an associate, and insisted on bonus fees for unusually good results.  In the end, the corporations wound up with 5 mega-firms, all charging $600 an hour and the company's legal costs went up.  ACC research bears me out on this.

So corporations in 2005 began seeking out litigation boutiques in Buffalo, rather than fly their 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.

So watch for this new Pinpointing  trend.  You heard it here first.