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Coming to litigation, yes, there's a lot of pre-litigation work, like stratagising etc , which determine the course of litigations. The inputs of external counsel are taken when the amounts are big and / or the issue is so complex that it's bound to end up before courts. But big 4s handle the disputes in departments and generally clients insist for lawyers for tribunal and above, though tribunal can be handled by big 4. Even in courts, it's not uncommon to see basic drafts made by the big 4s, which are then settled by the advocate who's going to argue the matter.
Hope this clarifies.