Supply chains and porous boundaries: The disaggregation of legal services

Fordham Law Review

Volumn 78, Issue 5, 2010, Pages 2137-2191

  Regan Jr , Milton C ^a,b,c   Heenan, Palmer T ^b  

^a Department of Law ^*  (United States)

^b GEORGETOWN UNIVERSITY LAW CENTER   (United States)

^c HARVARD LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 77952716613     PISSN: 0015704X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (278)

1. Breaking New Ground, LEGAL STRATEGY REV., Summer 2009, at 13, 15. The company estimates that using CPA Global will result in cost savings of 3:1 for work that would have been done in house and 7:1 for work that would have been sent to outside law firms. Id. at 14.
2. Id. at 13.
3. Id. at 14.
4. Id.
5. Id. at 15.
6. Id.
7. Interview by Richard Susskind with Leah Cooper, Managing Attorney, Rio Tinto (Oct. 9, 2009), http://www.legalweek.com/legal-week/analysis/1556450/ legal-process-outsourcing-richard-susskind-leah-cooper.
8. Breaking New Ground, supra note 1, at 15.
9. See Mari Sako, Global Strategies in the Legal Services Marketplace: Institutional Impacts on Value Chain Dynamics 3 (July 2009) (unpublished article, on file with the Fordham Law Review).
10. Walter W. Powell, The Capitalist Firm in the Twenty-First Century: Emerging Patterns in Western Enterprise, in THE TWENTY-FIRST-CENTURY FIRM: CHANGING ECONOMIC ORGANIZATION IN INTERNATIONAL PERSPECTIVE 33,65 (Paul DiMaggio ed., 2001) [hereinafter THE TWENTY-FIRST CENTURY FIRM].
11. David Pritchard & Alan MacPherson, Outsourcing US Commercial Aircraft Technology and Innovation: Implications for the Industry's Long Term Design and Build Capability 1,1-3 (Can.-U.S. Trade Ctr., Occasional Paper No. 29, 2004).
12. Id. at 3.
13. Id.
14. G. R. Hall & R. E. Johnson, Transfers of United States Aerospace Technology to Japan, in THE TECHNOLOGY FACTOR IN INTERNATIONAL TRADE 305, 354 (Raymond Vernon ed., 1970);
15. Scott E. Masten, The Organization of Production: Evidence from the Aerospace Industry, 27 J.L. & ECON. 403, 411-13 (1984).
16. See William K. Foxx, Michele D. Bunn & Valarie McCay, Outsourcing Services in the Healthcare Sector, 9 J. MED. MARKETING 41, 41-43 (2009).
17. See generally Sangiv N. Singh & Robert M. Wachter, Perspectives on Medical Outsourcing and Telemedicine-Rough Edges in a Flat World?, 358 NEW; ENG. J. MED. 1622 (2008);
18. Robert M. Wachter, The "Dis-location" of U.S. Medicine - The Implications of Medical Outsourcing, 354 NEW ENG. J. MED. 661 (2006);
19. Gretchen Henkel, X-Ray Has Left the Building, HOSPITALIST, Dec. 2006, http://www.the-hospitalistorg/details/article/196171/XRay-Has-Left-the-Building. html.
20. See Amar Gupta et al., Outsourcing in the Healthcare Industry: Information Technology, Intellectual Property, and Allied Aspects, INFO. RESOURCES MGMT. J., Jan.-Mar. 2008, at 1, 1-3.
21. Henkel, supra note 15.
22. Id.
23. Telemedicine Defined - American Telemedicine Association, http://www.americantelemed.org/i4a/pages/index.cfm?pageid=3333 (last visited Feb. 27, 2010).
24. Id.
25. See generally R. H. Coase, The Nature of the Firm, 4 ECONOMICA 386 (1937).
26. Id. at 388.
27. See id. at 389.
28. Id.
29. see also George S. Geis, Business Outsourcing and the Agency Cost Problem, 82 NOTRE DAME L. REV. 955, 968 (2007).
30. Coase, supra note 21, at 394.
31. Id. at 396-97.
32. See id. at 389.
33. See generally Oliver E. Williamson, The Vertical Integration of Production: Market Failure Considerations, 61 AM. ECON. REV. 112 (1971);
34. Jeffrey T. Macher & Barak D. Richman, Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences (Duke Law Sch. Legal Studies, Paper No. 115, 2006), available at http://ssrn.com/abstract=924192.
35. See generally Paul L. Joskow, Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets, 77 AM. ECON. REV. 168 (1987);
36. Saul Klein, A Transaction Cost Explanation of Vertical Control in International Markets, 17 J. ACAD. MARKETING SCI. 253 (1989).
37. See Oliver E. Williamson, The Economics of Organization: The Transaction Cost Approach, 87 AM. J. Soc. 548, 554 (1981).
38. See generally OLIVER E. WILLIAMSON, MARKETS AND HIERARCHIES: ANALYSIS AND ANTITRUST IMPLICATIONS: A STUDY IN THE ECONOMICS OF INTERNAL ORGANIZATION (1975).
39. Stefano Brusoni, The Limits to Specialization: Problem Solving and Coordination in "Modular Networks," 26 ORG. STUD. 1885, 1886 (2005).
40. RICHARD SUSSKIND, THE END OF LAWYERS? RETHINKING THE NATURE OF LEGAL SERVICES 137 (2008).
41. See id. at 169.
42. See generally Oliver E. Williamson, Transaction-Cost Economics: The Governance of Contractual Relations, 22 J.L. & ECON. 233 (1979).
43. See, e.g., Ulli Arnold, New Dimensions of Outsourcing: A Combination of Transaction Cost Economics and the Core Competencies Concept, 6 EUR. J. OF PURCHASING & SUPPLY MGMT. 23, 26 (2000);
44. Charles B. Stabell & Oystein D. Fjeldstad, Configuring Value for Competitive Advantage: On Chains, Shops, and Networks, 19 STRATEGIC MGMT. J. 413, 413 (1998).
45. On the concept of competitive advantage, see generally MICHAEL E. PORTER, COMPETIVE ADVANTAGE (1985).
46. Torstein Nesheim, Karen M. Olsen & Arne L. Kalleberg, Externalizing the Core: Firms' Use of Employment Intermediaries in the Information and Communication Technology Industries, 46 HUM. RESOURCE MGMT. 247, 249 (2007).
47. Id.
48. Id.
49. Joskow, supra note 29, at 170 & n.14.
50. Site specificity is a form of asset specificity that reflects location-specific investments, which cannot be transferred after the investments are made. They are traditionally assessed when applying transaction cost economics to industries involving heavy manufacturing. Id. at 170-71.
51. Oliver E. Williamson, Credible Commitments: Using Hostages To Support Exchange, 73 AM. ECON. REV. 519, 523 (1983).
52. Id. at 526-28.
53. See Joskow, supra note 29, at 169.
54. Id. at 180;
55. Paul L. Joskow, Price Adjustment in Long-Term Contracts: The Case of Coal, 31 J.L.& ECON. 47, 53 (1988).
56. Paul L. Joskow, Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence, 4 J.L. ECON. & ORG. 95, 101 (1988).
57. See Joskow, supra note 45, at 53.
58. See id.
59. See id.
60. See Joskow, supra note 46, at 101.
61. Akbar Zaheer & N. Venkatraman, Determinants of Electronic Integration in the Insurance Industry: An Empirical Test, 40 MGMT. SCI. 549, 553 (1994).
62. Id.
63. See id. at 550,561.
64. See id.
65. Alternatively, a knowledge-based theory of the firm would suggest that the reason for integration in this situation is less the cost or difficulty of using the market than the particular benefits that will accrue from producing the goods internally.
66. See generally Williamson, supra note 30, at 552-60.
67. Id. at 554.
68. Id. at 553.
69. See, e.g., Joskow, supra note 29, at 171.
70. Gordon Walker & David Weber, A Transaction Cost Approach to Make-or-Buy Decisions, 29 ADMIN. SCI. Q. 373, 376 (1984). An additional consideration that sometimes is relevant is frequency of production.
71. See Williamson, supra note 35, at 239. When a firm produces something infrequently, it would not make economic sense for it to incur the cost of maintaining a permanent in-house operation to produce it. The firm thus is more likely to acquire the inputs to make it from other parties as needed.
72. See id. at 241;
73. see also Lisa M. Ellram et al., Offshore Outsourcing of Professional Services: A Transaction Cost Economics Perspective, 26 J. OPERATIONS MGMT. 148, 150 (2008). Scholarship in transaction cost economics generally devotes little attention to the concept of frequency, since it is the easiest aspect for firms to analyze. While the level of production activity can be plotted on a continuum, there often is a readily distinguishable line that identifies when production is frequent enough to justify internal production.
74. Ellram, supra note 60, at 150.
75. See id. at 148-50.
76. See id.;
77. Saul Klein, A Transaction Cost Analysis Model of Channel Integration in International Markets, 27 J. MARKETING RES. 196, 200, 205 (1990).
78. Klein, supra note 63, at 200, 205.
79. Kevin Chern, Legal Process Outsourcing Makes Sense for Busy Consumer Bankruptcy Attorneys, 28 AM. BANKR. INST. J. 44, 44-45, 64 (2009).
80. Id.
81. See OLIVER HART, FIRMS, CONTRACTS, AND FINANCIAL STRUCTURE 1-14, 73-93 (1995). Oliver Hart is associated with what has become known as the "property rights theory of the firm," which posits that firms represent a way to allocate control over assets, which serves to establish background entitlements for the purpose of negotiating inevitably incomplete contracts. He suggests that this theory shares with transaction cost analysis a concern with contractual incompleteness but that a property rights approach places more emphasis on "the idea that power is important [and] that institutional agents are designed to allocate power among agents."
82. Id. at 5 (footnote omitted).
83. See Kirk Monteverde, Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry, 41 MGMT. SCI. 1624, 1629 (1995).
84. "In recent years, we have seen a dramatic increase in the number of 'contract lawyers' used in firms (i.e., lawyers hired for a particular project or set of projects without expectation of permanent employment) and that trend seems certain to continue." HILDEBRANDT & CITI PRIVATE BANK, CLIENT ADVISORY: JANUARY 2009, at 15-16 (2009);
85. see also Olivia Clarke, Lawyers Fill Temporary Need for Firms, Companies, CHI. LAW., Aug. 2007, at 52;
86. Melanie Healy, Rise of the Contract Fillers, LAWYER, Feb. 20, 2006, http://www.thelawyer.com/rise-of-the-contract-fillers/118935.article.
87. Firms also have sought to avoid the risk of incurring excessive fixed costs when demand is irregular by handling large projects through syndication rather than internal growth. See generally Randall S. Thomas, Stewart J. Schwab & Robert G. Hansen, Megafirms, 80 N.C. L. REV. 115 (2001).
88. Bob Sherwood, Heads Together, in FINANCIAL TIMES SPECIAL REPORT: FT INNOVATIVE LAWYERS (2009), http://www.ft.com/cms/s/0/57191ae4-bc49-11de-9426- 00144feab49a.dwp-uuid=ec1082a4-08a3-11de-b8b0-0000779fd2ac.html?nclick-check=1;
89. see, e.g., Nick Holmes, Online Legal Services - What the Big Firms Are Doing, INTERNET NEWSL. FOR LAW. (Delia Venables, Lewes, U.K.), JanTFeb. 2006, http://www.venables.co.uk/n0601bigfirms.htm.
90. Linklaters Blue Flag, Online Legal Services from Linklaters: Regulatory, http://www.linklaters.com/OnlineServices/Pages/Regulatory.aspx (last visited Feb. 27, 2010).
91. Linklaters, Term Sheet Generator, http://www.linklaters.com/ OnlineServices/Pages/TermSheeUspx (last visited Feb. 27, 2010).
92. See Wilson Sonsini Goodrich & Rosati, Term Sheet Generator, http://www.wsgr.com/wsgr/Display.aspx?SectionName=practice/termsheet.htm (last visited Feb. 27, 2010).
93. Eversheds, HR Contract Builder Demonstration, http://www.eversheds.com/ hrcontractdemo (last visited Feb. 27, 2010).
94. Holmes, supra note 71;
95. see Allen & Overy, Online Services: NewChange Documents, http://www.allenovery.com/AOWEB/OnlineServices/OnlineService.aspx?contentTypeID= 8&itemID=21926&prefLangID=410 (last visited Feb. 27, 2010).
96. SUSSKTND, supra note 33, at 46.
97. See CPA Global, Legal Process Outsourcing (LPO), http://www.cpaglobal. com/legal-process-outsourcing (last visited Feb. 27, 2010).
98. CPA Global, Preparation of Litigation Documents, http://www.cpaglobal. com/legal-process-outsourcing/litigation-documents (last visited Feb. 27, 2010).
99. CPA Global, Document Review, http://www.cpaglobal.com/legal-process- outsourcing/document-review (last visited Feb. 28, 2010).
100. CPA Global, Contract Management, http://www.cpaglobal.com/legal-process- outsourcing/contract-management (last visited Feb. 28, 2010).
101. See Pangea3, Legal Outsourcing Services, http://www.pangea3.com/legal- outsourcing-services.html (last visited Feb. 27, 2010).
102. Brusoni, supra note 32, at 1894.
103. Id. at 1889-901.
104. See generally JEFFREY K. LIKER, THE TOYOTA WAY: 14 MANAGEMENT PRINCIPLES FROM THE WORLD'S GREATEST MANUFACTURER 85-168, 221-66 (2004).
105. This system, however, apparently failed to prevent recent dangerous defects in Toyota accelerators. See Micheline Maynard, An Apology, and Sympathy, from Toyota's Leader, N.Y. TIMES, Feb. 25, 2010, at B1.
106. See generally THOMAS D. MORGAN, THE VANISHING AMERICAN LAWYER (2010);
107. Tanina Rostain, The Emergence of "Law Consultants," 75 FORDHAM L. REV. 1397 (2006).
108. San Diego County Bar Ass'n, Ethics Op. 2007-1 (2007), http://www.sdcba.org/index.cfm?Pg=ethicsopinion07-1.
109. Id.
110. Breaking New Ground, supra note 1, at 15.
111. See Thomas et al., supra note 70, at 138-42.
112. See infra Part II.A.2.
113. Geis, supra note 24, at 962.
114. JOEL M. PODOLNY, STATUS SIGNALS: A SOCIOLOGICAL STUDY OF MARKET COMPETITION 13 (2005).
115. This is true for professional services generally. As Jay Lorsch and Thomas Tierney observe, "it is exceptionally difficult to measure the quality of professional services, much less the actual value they add. In many client relationships, the professionals work so closely with their client counterparts that it's hard to say at the end of the day who did what, client or service provider." JAY W. LORSCH & THOMAS J. TIERNEY, ALIGNING THE STARS: How To SUCCEED WHEN PROFESSIONALS DRIVE RESULTS 17 (2002).
116. See Geis, supra note 24, at 962;
117. see also Ravi Aron et al., Monitoring Process Quality in Off-Shore Outsourcing: A Model and Findings from Multi-country Survey, 26 J. OPERATIONS MGMT. 303, 305 (2008).
118. See Geis, supra note 24, at 984-89.
119. See id. at 988.
120. Id. at 983-84.
121. Id. at 965-66.
122. PODOLNY, supra note 93, at 13.
123. Id. at 18.
124. See Julie Triedman, Top Design, AM. LAW., May 2007, at 135. It is true that the firm could not charge fees for state tax work that are as high as those for high-end corporate work, but there is a close relationship between price and status in which it is difficult to tease out which variable causes the other.
125. See Kit Chellel, Slaughters in Talks over Outsourcing Plans, LAWYER, Oct. 5, 2009, http://www.thelawyer.com/slaughters-in-talks-over-outsourcing-plans/ 1002151.article;
126. Kian Ganz, Clifford Chance Offshore Indian Lawyers Work on 300 Deals, LEGALLY INDIA.COM, Sept. 25, 2009, http://www.legallyindia.com/20090925213/Law- firms/Clifford-Chance-offshore-Indian-lawyers-work-on-300-deals;
127. Luke McLeod-Roberts, A&O Signs Outsourcing Deal with LPO Provider Integreon, LAWYER, NOV. 18, 2009, http://www.thelawyer.com/ao-signs-outsourcing- deal-with-lpo-provider-integreon/1002662.article;
128. Claire Ruckin, Leading City Firms in Talks To Bring in Teams of Contract Lawyers, LEGAL WK., Oct. 29, 2009, http://www.legalweek.com/legal-week/news/ 1560094/leading-city-firms-talks-bring-teams;
129. Emma Sandowski, Eight More U.K. Top 30 Firms Size Up Legal Outsourcing Moves, AM. LAW., Nov. 23, 2009, http://www.law.com/jsp/law/LawArticleFriendly. jsp?id=1202435664784.
130. Clifford Chance Promotes Two Lawyers from LPO into Firm, LEGALLY INDIA.COM, Nov. 23, 2009, http://www.legallyindia.com/20091123301/Legal-Process- Outsourcing-LPO/Clifford-Chance-promotes-two-lawyers-from-LPO-into-firm. The two will join the firm at the level of newly qualified lawyers.
131. Id. One will work with the firm's Abu Dhabi capital markets team, while the other will work in the banking group in London.
132. Id.
133. Michael Hobday, Andrew Davies & Andrea Prencipe, Systems Integration: A Core Capability of the Modern Corporation, 14 INDUS. & CORP. CHANGE 1109, 1124 (2005).
134. See Ron Sanchez & Joseph T. Mahoney, Modularity, Flexibility, and Knowledge Management in Product and Organization Design, 17 STRATEGIC MGMT. J. 63, 70-73 (1996).
135. Hobday et al., supra note 105, at 1127.
136. Id.
137. Stefano Brusoni, Andrea Prencipe & Keith Pavitt, Knowledge Specialization, Organizational Coupling, and the Boundaries of the Firm: Why Do Firms Know More Than They Make?, 46 ADMIN. SCI. Q. 597, 597 (2001);
138. see also Ove Granstrand, Pari Patel & Keith Pavitt, Multi-technology Corporations: Why They Have "Distributed" Rather Than "Distinctive Core" Competencies, 39 CAL. MGMT. REV. 8, 22-24 (1997) (noting that large firms are more diversified in technologies that they master than in the products that they make).
139. Hobday et al., supra note 105, at 1111 (footnote omitted).
140. Ellram et al., supra note 60, at 160-61.
141. See generally Pamsy P. Hui, Alison Davis-Blake & Joseph P. Broschak, Managing Interdependence: The Effects of Outsourcing Structure on the Performance of Complex Projects, 39 DECISION SCI. 5 (2008).
142. Id. at 24.
143. Id. at 7.
144. Id. at 8.
145. SUSSKIND, supra note 33, at 50-51.
146. Id. at 51.
147. MODEL RULES OF PROF'L CONDUCT R. 5.4(d)(2) (2009).
148. WILLIAMSON, supra note 31, at xi.
149. Powell, supra note 10, at 58.
150. See Joel M. Podolny & Karen L. Page, Network Forms of Organization, 24 ANN. REV. SOC. 57, 57-58 (1998).
151. Powell, supra note 10, at 59.
152. D. Eleanor Westney, Japanese Enterprise Faces the Twenty-First Century, in THE TWENTY-FIRST CENTURY FIRM, supra note 10, at 118.
153. Id. (citation omitted).
154. Powell, supra note 10, at 68.
155. See David B. Wilkins, Team of Rivals? Toward a New Model of the Corporate Attorney-Client Relationship, 78 FORDHAM L. REV. 2067 (2010).
156. The Lex Mundi network of 21,000 lawyers in 160 firms around the world is the most extensive such network. See Lex Mundi, http://www.lexmundi.com/ lexmundi/Default.asp (last visited Feb. 28, 2010).
157. See Sako, supra note 9, at 3-4.
158. See supra notes 93-104 and accompanying text.
159. Sharon F. Matusik & Charles W. L. Hill, The Utilization of Contingent Work, Knowledge Creation, and Competitive Advantage, 23 ACAD. MGMT. REV. 680, 681 (1998).
160. See generally Ellram et al., supra note 60;
161. Matusik & Hill, supra note 130.
162. Matusik & Hill, supra note 130, at 685.
163. See generally LIKER, supra note 85.
164. Matusik & Hill, supra note 130, at 685 (citations omitted);
165. see also Robert M. Grant, Prospering in Dynamically-Competitive Environments: Organizational Capability as Knowledge Integration, 7 ORG. SCI. 375, 375 (1996);
166. Rebecca Henderson & Iain Cockburn, Measuring Competence? Exploring Firm Effects in Pharmaceutical Research, 15 STRATEGIC MGMT. J. (SPECIAL ISSUE) 63, 65 (1994);
167. Bruce Kogut & Udo Zander, Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology, 3 ORG. SCI. 383, 394-96 (1992).
168. Matusik & Hill, supra note 130, at 687.
169. Id. at 688.
170. Id. at 685;
171. see also George P. Huber, Organizational Learning: The Contributing Processes and the Literatures, 2 ORG. SCI. 88, 91-92 (1991).
172. See Ellram et al., supra note 60, at 157-59.
173. See Matusik & Hill, supra note 130, at 692.
174. Ellram et al., supra note 60, at 160.
175. Id. at 161.
176. Id. at 153.
177. Id.
178. MATTHEW BIDWELL, SOME PITFALLS OF MANAGING TALENT ON DEMAND: A CASE STUDY OF IT WORKERS (2009), available at http://www.industrystudies.pitt.edu/ chicago09/docs/Bidwell%202.1.pdf.
179. Id. at 17.
180. Id. at 23.
181. Id. at 25.
182. Other reasons include concern about the potential negative impact on regular employees of using contingent workers and, because of historical precedent, the perception that outsourcing is more legitimate for some activities, such as administrative and clerical work, than for others. Arne L. Kalleberg & Peter V. Marsden, Externalizing Organizational Activities: Where and How US Establishments Use Employment Intermediaries, 3 SOCIO-ECON. REV. 389, 392 (2005).
183. Id. at 394 (citations omitted);
184. see, e.g., Jay Barney, Firm Resources and Sustained Competitive Advantage, 17 J. MGMT. 99, 116-17 (1991);
185. Nesheim et al., supra note 37, at 249-50 (summarizing conventional view);
186. C. K. Prahalad & Gary Hamel, The Core Competence of the Corporation, 90 HARV. BUS. REV. 79 (1990);
187. see also Matusik & Hill, supra note 130, at 690 ("In much of the existing literature, scholars recommend a cautious stance toward the use of contingent work, advocating its use only outside of core value-creation areas central to the attainment of competitive advantage.").
188. See, e.g., Matusik & Hill, supra note 130, at 695;
189. Torstein Nesheim, Using External Work Arrangements in Core Value-Creation Areas, 21 EUR. MGMT. J. 528, 530 (2003).
190. Nesheim et al, supra note 37, at 250.
191. Laura Poppo & Todd Zenger, Testing Alternative Theories of the Firm: Transaction Cost, Knowledge-Based, and Measurement Explanations for Make-or-Buy Decisions in Information Services, 19 STRATEGIC MGMT. J. 853, 855-56 (1998).
192. Matusik & Hill, supra note 130, at 691.
193. Kirsten Foss & Nicholai J. Foss, Authority in the Context of Distributed Knowledge 1 (Danish Unit for Indus. Dynamics, Working Paper No. 03-08, 2002), available at http://www3.druid.dk/wp/20030008.pdf. Foss and Foss emphasize "that this does not amount to asserting the existence of mysterious supra-individual 'collective minds.' Knowledge still ultimately resides in the heads of individuals; however, when this knowledge is combined and 'aggregated' in certain ways, it means that considered as a system, a set of agents possesses knowledge that they do not possess if separated."
194. Id. at 5.
195. Haridimos Tsoukas, The Firm as a Distributed Knowledge System: A Constructionist Approach, 17 STRATEGIC MGMT. J. (SPECIAL ISSUE) 11, 13 (1996).
196. See Granstrand et al., supra note 109, at 8.
197. GRETTA RUSANOW, KNOWLEDGE MANAGEMENT AND THE SMARTER LAWYER 7 (2003).
198. Id. at 71.
199. Id. at 119-34.
200. Matusik & Hill, supra note 130, at 690 tbl. 1.
201. See Mitu Gulati & Robert E. Scott, Three and a Half Minutes 65-69 (Oct. 8, 2009) (unpublished manuscript, on file with authors).
202. BENJAMIN GOMES-CASSARES, THE ALLIANCE REVOLUTION: THE NEW SHAPE OF BUSINESS RIVALRY (1996).
203. See Michael J. Powell, Professional Innovation: Corporate Lawyers and Private Lawmaking, 18 LAW & Soc. INQUIRY 423, 434 (1993).
204. See id. at 436-37.
205. Id. at 437.
206. Stephen J. Choi & G. Mitu Gulati, Innovation in Boilerplate Contracts: An Empirical Examination of Sovereign Bonds, 53 EMORY L.J. 929, 994 (2004).
207. On the possible movement toward more durable ongoing relationships between corporate clients and selected law firms, see Wilkins, supra note 126.
208. See Richard Lloyd, In-House Lawyer: The Power of One, LEGAL WK., May 29, 2008, http://www.legalweek.com/legal-week/analysis/1168974/in-house-lawyer-the- power;
209. Amanda Royal, Orrick-Levi Strauss Deal Underscores Growth of Alternative Billing, LAW.COM, Nov. 24, 2009, http://www.law.com/jsp/article.jsp?id= 1202435773922.
210. Powell, supra note 162, at 441 (footnote omitted).
211. See Larry E. Ribstein, The Death of Big Law (I11. Law & Econ. Research Papers Series, Paper No. LE09-025, 2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract-id=1467730.
212. See generally RONALD S. BURT, STRUCTURAL HOLES: THE SOCIAL STRUCTURE OF COMPETITION (1992).
213. PODOLNY, supra note 93, at 231.
214. See MODEL RULES OF PROF'L CONDUCT R. 5.4 (2009). For a more extensive discussion of how regulation of the legal profession inhibits innovation, see Gillian K. Hadfield, Legal Barriers to Innovation: The Growing Economic Cost of Professional Control over Corporate Legal Markets, 60 STAN. L. REV. 1689 (2008).
215. See, e.g., FINANCIAL TIMES SPECIAL REPORT: FT INNOVATIVE LAWYERS (2009), http://www.ft.com/reports/innovativelawyers2009. The Financial Times plans to launch a report on innovation in U.S. law firms in the near future.
216. College of Law Practice Management, InnovAction: About the Awards, http://www.innovactionaward.com/abouttheawards.php (last visited Feb. 28, 2010).
217. STANDING COMM. ON THE DELIVERY OF LEGAL SERVS., ABA, INNOVATIONS IN THE DELIVERY OF LEGAL SERVICES: ALTERNATIVE AND EMERGING MODELS FOR THE PRACTICING LAWYER (2002), available at http://www.abanet.org/legalservices/downloads/ delivery/innovations.pdf.
218. See, e.g., Adam Smith, Esq., "Innovation in Legal Services" Sponsored by Allen & Overy, http://www.adamsmithesq.com/archives/2008/06/ innovation-in-legal-servi.html (June 3, 2008, 9:47 EST);
219. Andrew Zangrilli, Client Driven Innovations in Legal Services -The State of the Legal Profession, Part 1, FINDLAW, http://practice.findlaw.com/law- practice-management-articles/00006/000447.html (last visited Feb. 28, 2010).
220. See, e.g., Hadfield, supra note 172.
221. For a fascinating discussion of the possibilities for collaborative work on developing contract innovations, see George Triantis, Collaborative Contract Collaboration (Nov. 10, 2009) (unpublished article, on file with authors) (discussing The Harvard Law School Contracts Wiki, http://ackwiki.com/drupal/ (last visited Feb. 28, 2010)).
222. See Matusik & Hill, supra note 130, at 690.
223. Alison Davis-Blake & Joseph P. Broschak, Outsourcing and the Changing Nature of Work, 35 ANN. REV. SOC. 321, 322 (2009).
224. Id.
225. Id. at 324-25.
226. Paul S. Adler, Making the HR Outsourcing Decision, MIT SLOAN MGMT. REV., Fall 2003, at 53, 55-56;
227. Soon Ang & Sandra A. Slaughter, Work Outcomes and Job Design for Contract Versus Permanent Information Systems Professionals on Software Development Teams, 25 MIS Q. 321, 323 (2001);
228. Brenda A. Lautsch, Uncovering and Explaining Variance in the Features and Outcomes of Contingent Work, 56 INDUS. & LAB. REL. REV. 23, 24 (2002).
229. See G. EDWARD GIBSON, JR., ALISON DAVIS-BLAKE, JOSEPH P. BROSCHAK & FERNANDO J. RODRIGUEZ, OWNER/CONTRACTOR ORGANIZATIONAL CHANGES: PHASE I REPORT 32-33 (1998).
230. ALISON DAVIS-BLAKE, KEVIN E. DICKSON, JOSEPH P. BROSCHAK, G. EDWARD GIBSON, JR., FERNANDO J. RODRIGUEZ & TODD A. GRAHAM, OWNER/CONTRACTOR ORGANIZATIONAL CHANGES: PHASE II REPORT 31-33 (1999) [hereinafter OWNER/CONTRACTOR PHASE II REPORT].
231. See John Francis Geary, Employment Flexibility and Human Resource Management: The Case of Three American Electronics Plants, 6 WORK EMP. & SOC'Y 251,262-64 (1992);
232. Vicki Smith, Institutionalizing Flexibility in a Service Firm: Multiple Contingencies and Hidden Hierarchies, 21 WORK & OCCUPATIONS 284, 298-300 (1994).
233. Davis-Blake & Broschak, supra note 179, at 328.
234. Susan J. Ashford, Elizabeth George & Ruth Blatt, Old Assumptions, New Work: The Opportunities and Challenges of Research on Nonstandard Employment, 2 ACAD. MGMT. ANNALS 65 (2007);
235. Alison Davis-Blake, Joseph P. Broschak & Elizabeth George, Happy Together? How Using Nonstandard Workers Affects Exit, Voice, and Loyalty Among Standard Employees, 46 ACAD. MGMT. J. 475 (2003).
236. Geary, supra note 185, at 260-61.
237. Jone L. Pearce, Toward an Organizational Behavior of Contract Laborers: Their Psychological Involvement and Effects on Employee Co-workers, 36 ACAD. MGMT. J. 1082, 1090(1993).
238. Elizabeth George, External Solutions and Internal Problems: The Effects of Employment Externalization on Internal Workers' Attitudes, 14 ORG. SCI. 386, 399 (2003).
239. Prithviraj Chattopadhyay & Elizabeth George, Examining the Effects of Work Externalization Through the Lens of Social Identity Theory, 86 J. APPLIED PSYCHOL. 781, 787 (2001).
240. Davis-Blake et al., supra note 187, at 330.
241. Davis-Blake & Broschak, supra note 179, at 330.
242. See Geary, supra note 185, at 260-61;
243. Smith, supra note 185, at 300.
244. See Davis-Blake & Broschak, supra note 179, at 330;
245. Geary, supra note 185, at 259.
246. See Davis-Blake et al., supra note 187, at 478.
247. See Geary, supra note 185, at 259-60.
248. See Smith, supra note 185, at 300-01.
249. See Joseph P. Broschak & Alison Davis-Blake, Mixing Standard Work and Nonstandard Deals: The Consequences of Heterogeneity in Employment Arrangements, 49 ACAD. MGMT. J. 371, 388-89 (2006).
250. See Davis-Blake et al., supra note 187, at 476.
251. See id. at 477.
252. See Broschak & Davis-Blake, supra note 199, at 389;
253. Davis-Blake et al., supra note 187, at 478.
254. See Davis-Blake et al., supra note 187, at 476.
255. See Geary, supra note 185, at 259.
256. See Davis-Blake et al., supra note 187, at 476.
257. See Broschak & Davis-Blake, supra note 199, at 389.
258. See id.
259. Davis-Blake & Broschak, supra note 179, at 331-32.
260. Id. at 333.
261. See id. at 332-35.
262. Id. at 332-33.
263. See generally Edward G. Anderson, Jr., Alison Davis-Blake & Geoffrey G. Parker, Managing Outsourced Product Design: The Effectiveness of Alternative Integration Mechanisms (Oct. 24, 2008) (unpublished manuscript, on file with authors).
264. See Ranjay Gulati, Does Familiarity Breed Trust? The Implications of Repeated Ties for Contractual Choice in Alliances, 38 ACAD. MGMT. J. 85, 106-09 (1995).
265. See Kim B. Clark, Project Scope and Project Performance: The Effect of Parts Strategy and Supplier Involvement on Product Development, 35 MGMT. SCI. 1247, 1252 n. 14 (1989).
266. See Lori Rosenkopf & Atul Nerkar, Beyond Local Search: Boundary-Spanning, Exploration, and Impact in the Optical Disk Industry, 22 STRATEGIC MGMT. J. 287, 290 (2001).
267. See Brian Uzzi, Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness, 42 ADMIN. SCI. Q. 35, 59 (1997).
268. Davis-Blake & Broschak, supra note 179, at 334.
269. See, e.g., Judi McLean Parks, Deborah L. Kidder & Daniel G. Gallagher, Fitting Square Pegs into Round Holes: Mapping the Domain of Contingent Work Arrangements onto the Psychological Contract, 19 J. ORGANIZATIONAL BEHAV. 697 (1998);
270. Linn Van Dyne & Soon Ang, Organizational Citizenship Behavior of Contingent Workers in Singapore, 41 ACAD. MGMT. J. 692 (1998).
271. See generally Elizabeth George & Prithviraj Chattopadhyay, One Foot in Each Camp: The Dual Identification of Contract Workers, 50 ADMIN. SCI. Q. 68 (2005).
272. Id. at 93-95.
273. See, e.g., VICKI SMITH & ESTHER B. NEUWIRTH, THE GOOD TEMP (2008);
274. Davis-Blake & Broschak, supra note 179.
275. Davis-Blake & Broschak, supra note 179, at 335.
276. See id. at 336.
277. OWNER/CONTRACTOR PHASE II REPORT, supra note 184, at 32.
278. See Jeff Jeffrey, For Some Firms, An Extra Step for the Newest Recruits, NAT'L L.J., June 29, 2009, at 1.