Legal Mosaic Essays on Legal Delivery

<strong>Legal</strong> <strong>Mosaic</strong>: <strong>Essays</strong> on <strong>Legal</strong> Delivery
Bulking up and Flexing:
The Shell Way
Years ago a friend took me to Venice Beach to watch, in her words, “the
curious freak show of men and women power lifting and flexing by the
Pacific.” It was a strange scene and made me wonder, “Why are they
doing this and who are they doing it for?” Years later, the bulking and
flexing process is playing out in a very different place: the <strong>Legal</strong> Department
of energy giant, Royal Dutch Shell (“Shell”). Only this time, the
reason for the display is obvious: Shell is an enormous consumer of legal
services and has a great deal to gain from delivering and procuring them
efficiently. It has simultaneously bulked up and streamlined its in-house
legal department while also flexing its buying power by demanding
greater value from outside counsel and circumscribing their use. Shell’s
impressive show of strength and flexibility has yielded eye-catching results.
Let’s take a closer look at what Shell’s OGC has done and why it
may well portend where things are headed in the legal marketplace.
Shell is a huge company, #2 behind only Walmart in the Global 500.
So it should come as little surprise that Shell’s in-house legal department
is large, numbering 650 attorneys and an additional 350 paralegals
and staff. But what is noteworthy about this in-house behemoth
is not so much its size but, rather, its recent reconfiguration borne of
strategic decisions that reflect a remarkably forward-thinking focus and
execution. Shell has—to extend the body-building metaphor—bulked
up and trimmed fat internally while demonstrating flexibility, enabling
it to insist that its outside firms “get fit” lest they lose Shell as a workout
partner going forward. So what steps has Shell taken in its procurement
(internal as well as external) and deployment of legal services and what
are the implications?
73