[unavoidable]

Litigation (court stuff) is almost always outsourced to law firms. The reason is that it's a different kind of practice than day-to-day corporate stuff (contracts, acquisitions, regulatory compliance) which is primarily done in house. Another major reason is the economics - generally, court cases are not always expected, and "lumpy" in timing (for example, you can have a few hearings back to back, and then spend months without court cases). So it's not usually efficient for companies to have in-house litigators. In addition, once litigation starts, you need a very big team to handle the work (pretty commonly, 10+ lawyers working full time on a tech case during pre-trial and trial). Companies don't like big payrolls.

Source: am litigator.

[structural]

Don't forget that if any company were to do litigation completely in-house, the second they were involved in one major litigation would be the perfect time for anyone else to take the company to court -- their lawyers are already all busy!

[throwawaylinux]

Makes sense, thank you.

It would be interesting to know how big and litigious a technology company would have to get before it made sense to develop their own litigation capability. Or would that run afoul of some legal profession expectation that "prestigious firms" are required, no matter the size of the tech company?

[unavoidable]

There isn't really a professional expectation about prestigious firms. However, there is some reputational effect of having external counsel represent you in court. Some courts (judges, juries) might view a lawyer who represents a variety of clients more credibly than a lawyer who is directly employed by one corporate party (admittedly I think this is a very small effect and can work both ways).

Most companies also want to maintain a healthy separation between internal and external counsel so that they can keep certain kinds of communications privileged and avoid awkward situations where an attorney who is both an employee and legal advisor to a company might be subpoenaed for a deposition (basically any time a lawsuit happens, any corporate employee with knowledge can potentially become subject to deposition as a fact witness). You basically never want your in-court lawyer to be deposed for any reason.

That said, there are some companies who look into this kind of stuff for smaller matters - small corporate disputes, collections of accounts receivables, and whatnot - oftentimes are now being done in-house even if they involve some in-court matters. It still doesn't seem to make sense for big files though.

[andylynch]

I struggle to think of a firm better matching that description than Oracle. But slightly more seriously, this kind of litigation work is both very specialised and high risk, so it makes sense to rely on the best advisors in the field, who will almost certainly be external counsel.

[jeffbee]

But litigation is Oracle's core business!

[meepmorp]

This is not true and also not entirely wrong.

[jeffbee]

https://bonkersworld.net/organizational-charts

[meepmorp]

I like the MS business units pointing guns at one another. Gotta focus on the real enemy.

[dkersten]

> The reason is that it's a different kind of practice than day-to-day corporate stuff

With some of these big companies, litigation almost seems like its part of their day-to-day though.

[blevin]

Do you have any thoughts on litigation funding as an investment portfolio component -- e.g. via Lexshares, Burford, or Pravati?