If you ever wondered why "Adam Smith, Esq." concentrates on law firms to the essential exclusion of inhouse legal departments—and if you happened to know that I spent nearly 10 years inhouse at Morgan Stanley/Dean Witter as a securities lawyer, slightly longer than I practiced in firms—I have the answer for you.

Actually, my answer is quite straightforward:  When you set out to address "the economics of law firms," it's because you're fascinated by all aspects of their quest to "succeed," in the many dimensions in which success can be defined.   A key dimension is that of the P&L, and simply put there's no "P" in the inhouse department's P&L.

But the second reason is well expressed in today's WSJ article, "Silicon Valley's Outsiders:  In-House Lawyers?," which posits that in-house lawyers are still seen "as a block to the execution" of companies' plans, that they have "one hand tied behind [their] backs," (this from Mark Michael, the GC of 3Com from 1986 to 2003), and that "you're just not empowered or funded."

Too well do I know this tale.   Year after year after year at budget time I have seen law departments plead, beg, and otherwise prostrate themselves before the "real" businesspeople.  You can imagine this would become tiresome.

Covering it would also make for a rather boring publication:  So that, in a nutshell, is why "Adam Smith, Esq." essentially never has, and dollars to doughnuts never will, address in-house departments.