Debra Cassens Weiss, ABA Journal
Alternative legal fees are often discussed, but less often embraced, especially in litigation matters.
The Washington Post spoke with two lawyers who are putting their beliefs into action.
One is Crowell & Moring partner Kathy Kirmayer, a litigator who charges alternative fees for most of her work. Often Kirmayer will charge a flat fee with a success fee for positive outcomes such as early dismissal of a case.
“What I’m looking to do is provide the lowest cost to the client as possible—asking how few people can do this task?” she told the Washington Post. “How quickly can we get this task done? What’s the lowest cost to the law firm, and what’s a reasonable return on that investment? It’s cost-up pricing rather than basing off an hourly rate.”
Another believer in alternative fees is Steven Greenspan, head of litigation at the legal department of technology and aerospace company United Technologies. About 70 percent of the company’s legal fees, including its litigation fees, are based on alternative billing. For litigation matters, the company’s outside law firms charge for different phases of a case, such as investigation, discovery, trial preparation, trial and appeal.
“We believe the hourly rate is dead, and we shouldn’t engage outside counsel on an hourly rate basis,” Greenspan told the Washington Post. “I almost never get pushback [from law firms] today. Two or three years ago, I got pushback all the time.” (read the post)
Building a world-class legal vendor management program starts with identification and goals
When programs are properly developed, implemented, and administered, a legal department can save millions of dollars that could be reallocated
David Cambria, Aaron Van Nice, InsideCounsel
While there are many areas of a legal department that typically fall within the scope of responsibilities of the head of legal department operations (LDO), almost none impact the legal department’s finances as profoundly as outside counsel spend and legal vendor management. In fact, most law departments spend more than 60 percent of their budgets on outside counsel and legal vendors. Efforts encompassing outside counsel and legal vendor management may involve the identification, selection, utilization, measurement, or some other aspect of a legal department’s law firms and other vendors. Optimizing outside counsel and legal vendor management only results when the general counsel and LDO make productive changes to the internal and external relationships that consist of the right mix of in-house professionals, outside counsel and clients.
Types of outside counsel and legal vendor management initiatives
Developing and implementing creative programs to manage outside counsel and legal vendors is a critical aspect of the job of LDO professionals. Building world-class outside counsel and legal vendor management programs that aligns the work of outside service providers with the objectives of the client should always be a top priority among LDO’s. By focusing on substance rather than form, LDOs can develop and implement outside counsel and legal vendor management initiatives. Ultimately, outside counsel and legal vendors will be able to take on more of a strategic business advisor role, and contribute to goals such as cost savings, improved relationships, increased service quality, reduced risk, efficiency, and better decision making. (read the article)
Become an ILDE member here.
Navalent’s Mindy Millward said “context” is often hard for those raised in the legal world to understand
Zach Warren, InsideCounsel
Aspiring to become general counsel? Or maybe you’re just looking to advance one step up the ladder in your legal department? Either way, it’s important to know that the idea of what makes a good in-house legal leader may not be the same as what it was in your parents’ generation, or even the same as just 15 years ago.
Increasingly, high-level in-house counsel are asked to not only be legal leaders, but to be proficient in the business as well. According to some career experts, that means the characteristics that companies are looking for when hiring in-house counsel has changed as well.
Mindy Millward, managing partner and owner of Navalent Consulting, has placed a number of individuals in high-level positions, including general counsel. Navalent recently undertook a two-year longitudinal study and found that 65 percent of newly-appointed executives fail within the first 18 months. In order to combat this high turnover, Navalent suggests that companies focus on four main characteristics that companies look for when hiring these leaders: breadth, choice, context and connections. (read the article)
From the Experts
Ari Kaplan, Corporate Counsel
In an era of consolidation, half of the law departments at large companies concentrate their e-discovery spending with two to four outside providers, while another 39 percent spread their work across more than five. Only 11 percent have a single dedicated provider. Although 58 percent would not comment on the companies with whom they work, 42 percent revealed relationships with certain organizations.
These were some of the results we found in November 2013 when my company, Ari Kaplan Advisors, conducted a flash telephone survey of 26 predominantly administrative professionals (half of whom were either the director of legal operations or the director of electronic discovery) from Fortune or Global 500 companies. These respondents had knowledge of, and responsibility for, their organization’s electronic discovery protocols and litigation practices, and they shared their views on key trends for 2014, including the vendor selection process.
Effectively Navigating the Process
While the selection process for outside providers differs, the respondents revealed consistent patterns. (read the article)
Law departments can leverage benchmarking data to effectively understand its outside counsel spending levels
Lauren M. Chung, InsideCounsel
Law departments are no longer immune to corporate cost cuts, but there are multiple ways to contribute to the bottom line. In a six-part series, HBR Consulting will offer perspectives on ways that law departments can drive cost savings through the effective engagement of outside counsel. This first article of the series looks at how law departments can leverage benchmarking data to effectively understand its outside counsel spending levels and position itself to be the drivers in the relationship.
Benchmarking is a point of comparison, a framework for contemplating and probing a law department’s performance or characteristics. It is a tool that allows companies to compare themselves to practices and operations of various groups. Benchmarking serves as an important starting point for law departments looking to understand their current position and identify cost-savings opportunities.
Measure the spending
A key first step in evaluating the law department’s outside counsel management efforts is to measure its spending levels. (read the article)
From the Experts
Prashant Dubey, Corporate Counsel
There has long been a tension between business units and legal departments over contracting. In many companies this tension has resulted in a “live and let live” environment, since the companies don’t have much contract-driven litigation and haven’t been slapped with sanctions.
However, this seemingly benign tension has flared into something more intense in some companies, and general counsel are finding that looking the other way is no longer an option. Audit committees of boards (especially at public companies subject to Public Company Accounting Oversight Board standards) are asking for audits of their companies’ contracting practices. Here are some of the circumstances that have prompted action:
At a board meeting of a publicly traded Fortune 100 company, the GC and the CFO of a company were asked to succinctly state the “total value of all obligations contained in active agreements.” No one on the management team could answer the question.
Elsewhere, a company’s management could not represent an overall “risk” level across all contracts. (read the article)
Corporate legal departments are increasingly turning to legal services outsourcing, and becoming discerning buyers in the process
Tyler Marion, InsideCounsel
Scars from the Great Recession are still visible on the books of most major corporations, and it’s clear that a lot of in-house legal departments didn’t escape unscathed.
Large markups on billable hours, expensive associate resources and lack of cost oversight on the vendor’s behalf in many cases led to painful internal cuts, resulting in more work for internal legal resources that would otherwise have been outsourced to law firms. Lessons have been learned and are being applied. Legal departments are now focused on delivery and cost — and are becoming more educated shoppers when it comes to the external provision of legal services.
They have to be. Identifying the work to outsource is one thing, choosing who to outsource to is another. Providers of legal services outsourcing (LSO) — or legal process outsourcing (LPO) — are now plentiful, offering the services and cost that corporate clients are seeking. According to some sources, some 47 percent of companies outsource between 11 percent and 30 percent of their legal work to LPOs. (read the article)