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Last week we posted a Blog discussing the virtues of virtual law firms (See "The Virtual Law: A Dream Come True"). It is not surprising that as a response to increasingly tight corporate budgets, some attorney have come up with creative solutions to provide GCs with alternatives to the large law firm hourly billable rate.

New companies offering outsourcing solutions or virtual law firms are cropping up across the country (see "Tighter Budget Make Outsourcing Attractive").

Where U.S. Companies and Law Firms once resisted outsourcing, citing concerns over quality, and where virtual law firms were once viewed with skepticism, today they are not only popular alternatives, but also solutions that cost-conscious GCs can no longer afford to ignore.

Can GC's do away completely with the current large law firm model? Absolutely. The real question is whether they want to. While GC's continue to complain over high billable rates, bad service, limited business understanding, and the lack of diversity in large law firms, they are nevertheless continuing to engage them.

Despite GC's many attempts to reform law firms - little has changed to address these concerns. Employing large law firms is like running your car on gas. You know that it is expensive, that it is only going to get more expensive, and that it pollutes; yet most of us keep driving that $4+ a gallon gas guzzling car...despite the fact that hybrids are available in the market. Why? Well, because hybrids just aren't yet as good as regular oil guzzling cars. They can cost more upfront, are harder to fix, and don't go as fast.

The same can be said for GC's who want their companies protected by the liked of the top tiered law firms that make up the Magic Circle and AMLAW 100. GC's don't want good enough quality; they want top-notch quality. And despite the fact that we all know that quality does not necessarily mean more expensive - it's still hard to get away from this line of thinking when there is so much riding on the line. As attorneys, we are typically not risk takers, and most of us don't want to go outside the box.

Do more expensive law firms produce better results? No one has been able to answer this question conclusively.

And for that, GC's are willing to continue to put up with all the shortcomings that come with working with the big law firms.