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Legal Departments: Critically Assess Your Use of Service Partners

At many law firms, partners wind up being economically classified as either “rainmakers” (i.e., business generators) or “service partners” (i.e., supporting cast members) depending on one’s relative economic contribution to the firm and personal productivity level.   Law departments that promote operational efficiency and cost consciousness as strategic goals should pinpoint service partners on their matters and evaluate whether they are adding value. Service partners usually fall into one of two categories (i) Specialists, or (ii) the Endangered.  Specialists are expert in a discrete, highly technical area of law, such as ERISA, export control, FOIA, FCPA, state and local tax, regulatory law, appellate work and a host of others.   As non-rainmakers, specialists survive and thrive because they have a differentiator – a unique skill set that meaningfully contributes to the success of other partners’ practices and assists clients on high value, nuanced legal issues.

Endangered service partners are typically generalists in a broad practice area, not specialists.  As attorneys, they lack a competitive differentiator and many attorneys can tout the same skill set, albeit at different experience levels.  Non-rainmaking, service partners who are general commercial litigators, real estate practitioners, business transactional lawyers or corporate attorneys squarely fit into the endangered class.  Endangered service partners usually align themselves with a handful of rainmakers to remain productive and assume administrative activities for a firm.  Because the primary economic contribution of the endangered service partner to a law firm cannot be measured by business generation or a unique skill set, his or her contribution is measured primarily by the billable hour.   In AmLaw 200 firms, service partners in the endangered class are now closely scrutinized by their more economically productive peers and in-house legal departments should follow suit.  The reason is fairly simple.

The endangered class of service partner is economically driven by billable hours (much like associates) and uniquely positioned and inclined to retain work and handle tasks that could be competently and efficiently performed by a more cost effective timekeeper.  Do you want the 15-year service partner or a 6th year associate drafting a credit agreement or a motion to dismiss or an employment agreement?    Your level of confidence in the service partner, his or her level of institutional knowledge or the risk/value analysis may ultimately steer you to the 15 year service partner, but it is critical to evaluate the nature of the service partner's contributions and whether you are receiving incremental value add.