Lawdable : Cost-Effective & Flexible Legal Solutions for Corporate Legal Departments & Law Firms : Cost-Effective & Flexible Legal Solutions for Corporate Legal Departments & Law Firms: Counsel On Call

July is the perfect time to reflect on the first half of the year. Things have been so busy here that we haven't had as much time to post as we'd like, but one of our second-half goals is to contribute more to Lawdable.

In the meantime, here are the five most viewed Lawdable posts to January to July 2010, in descending order:

#5: Legal Project Management: Fad or Focus? (Barry Willms, April 7)
More discussion on LPM, which points to some recent successes and the necessity for the project manager to have authority and follow several key guideline. This follows other popular posts on LPM from Richard Stout (January, see #3), Dennis McKinnie (June 2009) and Candice Reed (June 2009), among other LPM musings.

#4: E-Discovery Tools: Evaluate, Collaborate and 'Lawyer the Problem' (Barry Willms, May 21)
One of the summaries of a Discovery Symposium 2.0 panel session with Barry, co-author of Lawdable Richard Stout, and Edward Efkeman from FedEx. A synopsis of the process and decisions in-house departments factor regarding technology tools and how they fit with their respective teams and culture.

#3: The Spotlight Shines on Project Management (Richard Stout, Jan. 21)
This post was part of a multi-blog dialogue about whether PMs should be lawyers or non-lawyers as LPM truly cemented itself in the vernacular of the legal profession at the beginning of the year. Richard even suggested that LPM could provide an alternate path to partnership in law firms in the future. There were many great observations on the 3 Geeks and Hildebrandt blogs and plenty of back-and-forth on Twitter.

#2: Q&A With Attorney Chris Cotton: Haiti Update (Jan. 18)
Chris is a real leader within our E-Discovery Division and a trusted tactician and voice on our teams. He has also spent significant time in Haiti, helping build and launch an orphanage through the Hands and Feet Project before he came to Counsel On Call. He was in regular contact with several people on the ground after the earthquake, spoke to the media, coordinated with Tennessee's congressional delegation, and took a few minutes to speak with us about the situation in Jacmel.

#1: Alternative Fee Arrangements Gain Traction (Candice Reed, Feb. 3)
Talk of AFAs was deafening in the early part of the year and has only slightly quieted down in recent weeks, so it's no suprise a post on the subject drew plenty of interest. We also heard a lot about it at Discovery Symposium 2.0 and have written often about the subject on Lawdable. We're confident it will continue to be of interest for the foreseeable future.

Of course, posts including our interview with Marty Mazzone of Fidelity Investments (April 2009) and Richard's about what's more important than the hourly rate in e-discovery (March 2009) still are among Lawdable's most viewed.  

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There’s an article today in the ABA Journal regarding a survey of the 50 largest law firms in the U.S. and their use of outsourced legal services.

The only eye-popping numbers you’ll see in the survey results, however, are that 83% of the law firms surveyed declined to participate. The surveyors cite ethical and proprietary business concerns about law firms admitting the use of contract or outsourced attorneys, but in reality this is the fine line firms feel they must walk concerning their image. To be sure, Big Law has taken its lumps in the press during the last couple of years and they probably don’t see much that can be gained by participating in a survey like this.

But here’s what we’ve been hearing and seeing in meeting after meeting with hundreds of corporate legal departments in recent months: 1) they have demanded that their law firms outsource work like e-discovery, due diligence, contracts, patents and many other labor-intensive matters, or 2) they have partnered with law firms who have proactively brought outsourced solutions to them and ended relationships with law firms that haven’t been so forward-thinking.

It's also worth mentioning that we’ve also met and worked with a large number of top law firms in the last year, and call several of the AmLaw 100 some of our best clients -- and a handful have been with us for nearly a decade.

So while the survey results might not be that surprising, it does seem like an opportunity lost for firms who are constantly trying to gain market share and differentiate for their competition. Orrick, for one, has been very outspoken on their plans to utilize contract attorneys. While its “associate track” model is still in its early stages, it appears a promising – and differentiating – model that speaks not only to the needs of clients, but to the ever-changing needs of the attorney workforce.

At some point in the not-too-distant-future, none of this will be an issue... it will simply be part of the business that large chunks of legal work are outsourced (even though that’s the case already -- but shhhhh).
 

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It what was undoubtedly one of the most anticipated discussions of Discovery Symposium 2.0, Sue Dyer (HCA), Jan Mendel (AT&T Mobility) and Carlos Provencio (Morgan Keegan) served as panelists and led a lively discussion that detailed approaches to working with outside counsel in the discovery process. Anne Whitaker moderated.

Main Takeaways:

• Set a line in the sand with outside counsel; Say, “This is how we’re doing it”
• Building a “virtual law firm” controls outside counsel spending
• Regional law firms and a collaborative model result in great value
• It is important to set parameters on the front end
• Law firms “will not change until we make them change”

Sue Dyer began the session by discussing the “virtual law firm” model, which includes the use of regional law firms and a HCA-dedicated team of Counsel On Call attorneys for discovery. Not only has this approach reduced costs, but it has made the discovery process more straightforward and efficient and eliminated the dependence on one law firm’s process versus another. HCA brings that consistency to each matter, wherever the matter takes place.

The panel and audience also discussed that as far as law firms are concerned, “not much has changed.” Some who came from the law firm background empathized with the law firm argument regarding the use of less expensive attorneys, specifically that “they sign the pleadings” and their work is attached to it. The counter to this, according to Carlos, is that it’s a matter of assigning value to types of work, and he sees the law firm in a more strategic role in litigation. He will pay law firms “for inspiration, not perspiration.” Audience members and panelists agreed saying that “law firms will not change until we make them change” and going as far to say that value pricing should be “part of their corporate responsibility.”

Panelists also discussed e-discovery and its addition to their workload, as well as to the budget difficulties they once experienced. While it was somewhat frustrating, panelists agreed that it has been more disappointing that law firms simply “do not get the team approach.” The turf battles and desire to handle everything on a case only impedes what in-house departments are trying to do. For Jan, this has given her the opportunity to be more creative with her budgeting and thought process, and she has seen dividends already and expects more in the coming months.

The cost of legal services was also discussed at length. Several attendees said they will not pay more than $500 an hour in attorney fees. The suggestion that law firms will continue charging high prices as long as “Corporate America” allows it created a lively discussion with the audience. One participant said she believes it is “offensive” to pay someone $900 to $1,000 an hour and will not approve partner hourly rate increases; she will, however, approve some associate increases (once she gets to know the associate’s work product). Since many big firms are not making changes to their hourly rate approach or insist on rate increases, many companies have utilized a virtual/regional firm network, which is much more in line with hourly rates under $300 per hour.

One audience member said she believes the root of the problem is costly law schools and student loan agencies. Because law school loans are due so soon after graduation, lawyers feel compelled to charge an unusually high hourly rate to pay back loans right away. Another audience member then said he believes the problem is law firms competing for higher profits, that it’s not the law school but the “economic model of the law firm.” He cited the cost of a paralegal at one firm of being more than $300 per hour, which indicated a complete lack of understanding regarding value. He also discussed two of his law firms’ stated goal to be on the “top profit per partner list,” which he said they achieved… but his company no longer works with those firms because of it. He said his company’s goal is to never pay more than $300 for an attorney (they are at the $500 cap currently).

The issue of how to tell a law firm “this is how we’re going to do it” was then discussed. While it can be a difficult conversation, all who spoke agreed that it’s important to set a hard line in the sand. Many stated that it’s become clear that whether or not law firms do realign their business model, there’s a better way to handle litigation and discovery anyway. One panelist noted that she doesn’t know if law firms are ever going to “get it,” but that they haven’t waited around for their firms to do so.

The importance of setting parameters on the front end of a working relationship was also discussed. Several participants stated their desire to get better in this area; clearly defining roles and who will handle what work are important issues to address that aren’t always black and white. Including law firms in the decision-making process regarding the distribution of work and budgeting was one approach highlighted; giving firms the opportunity to match prices for discovery work has been utilized by some, but no firms have “met that offer.” Within that context of collaboration, Carlos discussed Morgan Keegan’s approach in using similar-size regional law firms and how, much like Sue and HCA, Morgan Keegan is already seeing benefits. The firms work well with one another and his Counsel On Call team; when a matter arises that a firm needs assistance with, another firm in his network will step up “seamlessly.”
 

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I’m sure we’ve all felt like we’re stuck in this cycle at some point. It’s very easy to fall into patterns and ruts, especially with endless piles of work or when something has typically been handled a certain way.

The surface of the earth is soft and impressible by the feet of men; and so with the paths which the mind travels. How worn and dusty, then, must be the highways of the world, how deep the ruts of tradition and conformity!               

- Henry David Thoreau, Walden

If we’ve learned anything the last two years, it’s that taking a different look at the delivery of legal services is, at a minimum, a healthy exercise. Don’t get me wrong, I don’t think corporate legal departments used to search for ways to spend more money or work less efficiently. I don’t believe law firms weren’t trying to provide value to their clients prior to 2008. But it’s not a stretch to say that those issues were once lost in the “lather rinse repeat” world of legal services up until the bottom dropped out of the economy.

Now the focus on these issues is apparent, and many in-house departments and law firms have taken dramatic steps in recent months to retool their operations or install cost-containment measures. But what does it really mean? Does saving $2 million a year in legal expenses signal escape from the rut? Does reorganizing who handles a client’s work mean that a new approach has been adopted? These very well may be very positive steps, but real change has more to it – and the benefits could be tenfold.

Think for a moment about a typical EEOC matter, due diligence need or a stack of marketing contracts that must be renegotiated. If the average in-house department is already short-staffed (and swamped), where is the first call going? Outside counsel. Maybe there are good protocols in place for these issues – the associate receives the message and tries to get to these matters as quickly as he or she can, balancing it with the needs of several other clients. Even if an alternative or flat fee has been arranged for this type of work (ahhh – change!), it is still reliant upon a ‘lather rinse repeat’ way of doing things: Work comes in. Outside counsel contacted. Work handled. Invoice sent. Gratitude that the bill was as expected. There is value in known quantities, after all.

What I would say is that there are different ways to handle this work on both sides of the table. We’ve posted here about the Tripartite Model (or “three-legged stool”) model before – basically installing a new model for some of this mid-level work to client-dedicated (Counsel On Call) attorneys who collaborate with both in-house and external counsel. This allows outside counsel to focus on bigger issues and staff work in a more effective way; in-house counsel utilizes attorneys dedicated to their matters who are available as-needed. It’s flexible, fluid and responsive, and allocates resources efficiently and appropriately. It also saves money for both parties.

But let’s take it a step further and focus on value and improvement (not just process). Tracking, reporting and evaluation are cornerstones in everything, not just in e-discovery. What does the client truly get from our services? How can we better handle this work? How can we reduce the costs? What did we learn? How can we use what we’ve learned to make the work product better? Who needs to be plugged into this and at what point? What work is being duplicated by others or requires similar functions? How much time do these matters truly take? What work has been rejected by legal because of a lack of resources to handle it (but legal would really like to handle it)?

If these questions and others are being asked with your different types of work, your “legal pattern” likely has a more beautiful hue to it these days. There must be a broader perspective, even in the most “rut-like” activities.
 

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It’s hard to believe that after all the planning from Discovery Symposium 2.0 that it’s over. It was a very fast-paced, informative and fun two days. But now it’s time to recap – if it’s possible to capture in a blog post the back-and-forth dialogue from panelists to audience -- and figure out what we learned… and where better to start that the first session of the first day?

On the ‘Software Experience, Culling and Early Case Assessment’ panel, I had the pleasure of sitting on stage with Edward Efkeman from FedEx and the director of our E-Discovery Division, Richard Stout. Edward has co-chaired FedEx’s internal e-discovery initiatives for the last three years, and if you’ve been to a major e-discovery event, you’ve likely seen his name on the program. Edward and his FedEx colleagues have a great discovery model in place.

We had a lively discussion with a lot of interaction with and questions from the audience. The most important takeaway for me was a comment from Edward: “Don’t forget to lawyer the problem.” FedEx definitely walks the walk in this regard and their in-house team is incredibly hands-on and detailed-oriented. His point: it’s not enough to throw technology at a matter or process; it must make sense and it must still meet the legal standards of reasonableness, defensibility and good faith. This is wonderful advice that I believe gets lost in the noise of the thousands of technology tools, webinars, conferences and white papers that engulf us.

In the spirit of ‘lawyering’ the problem, we were also reminded that lawyers have been doing early case assessment (ECA) from the beginning of the profession… it’s just now they must use technology to help solve a technology problem, which is volume. One still must interview custodians, decide what’s in and what’s out, strategize, etc. Using technology to solve a technology problem is really the only thing that has changed, and when utilized properly certainly makes life easier. (There is also a good post on E-Discovery 2.0 surrounding the discussion of the interviewing process.)

So your software selection must be understood and used by your lawyers. It’s not good enough that IT is impressed with the technology; the lawyers are the ones who must understand how it works. And bringing the process in-house is not the only option that a corporation may consider, obviously. They can also partner with an outside vendor to help guide and staff the process, review and ultimately produce what needs to be produced.

Along with risk tolerance, these decisions also come down to cost and results. Cost savings are found in reducing the amount of data and then reviewing the remaining data faster. Content analytic tools, clustering, and improved search functionality have aided review teams to speed the process and thus save money. Good tools and consistent protocols also provide more reliable cost predictability, which has generally been lacking in the discovery world in most cases. Using experienced attorneys who understand how to use the full capabilities of a review tool helps with speed, accuracy and overall project cost.

Relationships – internally and with outside counsel, IT vendors and other service providers – are also keys to success in the discovery arena. Everyone must understand roles, collaborate and communicate, and problem-solve. These were consistent themes throughout DS2.0, actually, and success with the above factors leads to results that are difficult to top, the panel agreed.

We also discussed several specific tools and platforms. ECA platforms such as Clearwell, Lateral Data and Equivio, among others, were detailed; the number of companies that have started to use one ECA platform or another has risen dramatically in the past year; reducing up to 90% of the data to review will clearly open some eyes. Some have even tried various purported “all in one” tools, though the general consensus was that no one tool excelled in all areas of the EDRM. The majority of companies that have the resources to pull chunks of the EDRM in-house don’t seem overly concerned with the “all in one” solution – they want the right tool for the specific case or matter, or have identified particular tools that fit the majority of their work (or at least ECA and the review). Others find the idea of off-site hosting/processing very appealing, and along these lines the panel and audience discussed platforms and services that offer “seamless” use of multiple tools, but with no real consensus. Regardless of the path, it's always wise to "test drive" a tool or platform before making any decisions.

Another takeaway worth noting: since it’s the lawyers who must be able to use the tool, a vendor may have already lost the sale if its software requires a full day (or even a multi-day) training session to fully utilize and comprehend it. That time commitment just isn’t realistic in today’s environment, and it certainly doesn’t affirm the “ease of use” mentality that so many in-house counsel seek. Understandable, practical and cost-effective are what matter. Without those, the in-house lawyer will not even give a tool or platform a second look.

We’ll have more on our other sessions in the coming days.
 

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Everyone is back in the office and looking fresh this morning, having wrapped up our 2nd annual e-discovery client event, the Discovery Symposium, with GCs, heads of litigation and those managing the e-discovery process. It was a fast-paced two days, with nine sessions covering a healthy spectrum of issues. All indications are that it exceeded last year, of which the general consensus was “the best discovery event put on by a wide margin.”

What makes the event so unique are the panelists who volunteer to participate and the open dialogue they help generate from the audience. The group is relatively small by design – we capped it at 55 in-house attorneys from 40 corporations – and there are no vendors in attendance. We also don’t put strict parameters on the content; we want the conversation to flow to what the attendees want to talk about. In the end, it’s peers speaking frankly about their experiences with the goal of identifying best practices and new ideas.

The group is diverse, with numerous Fortune 50 companies to small legal departments, with attorneys managing discovery in a variety of practice areas. What is especially rewarding to us is that our attendees have truly connected and reach out to one another to share ideas once they've returned to their respective offices.

Posted below are a handful of the great comments made during the sessions by our panelists and attendees. We will likely have several posts in the next couple of weeks recapping specific sessions.

“What differentiates some of the (software) tools often comes down to whether or not a lawyer can actually use it… I shouldn’t need two days of training, and no one on our team has 16 hours for that anyway.”
- ‘Software Decisions’ panel

“We truly develop and invest in our relationships, whether they’re with outside counsel, our IT department, or partners like Counsel On Call… otherwise it’s constant re-education.”
- Fidelity Investments panel

“I tell them it’s my risk, not theirs. And it’s what we’re doing, so you’re either in or you’re out.”
During discussion about law firms who regularly ‘fight’ when e-discovery is shifted in-house and Counsel On Call attorneys are utilized. The group cited instances in which the law firm said, ‘Well, it’s my name on the pleadings and I won’t risk it.’

“Let’s get real: you can’t budget everything. We’re creating budgets during the summer for the following year... we ask everyone to track key metrics and forecast their work volume, then make mid-year projections.”

“Yes, the action is in the forecast.”
- Discussion during ‘The Budgeting Puzzle’ panel

“I have gotten religion about value. I’m focused on cost and how to reduce it. The events of the past 18 months… there is no turning back. This is the way of life moving forward.”

“I’m a lawyer with a practice who has to report to my clients. This IS a legal practice and we have to show we’re providing value. I communicate that to everyone on my team.”
- ‘Litigation Leaders’ panel

“Two of our law firms made a conscious decision to pursue inclusion on the best ‘Profits Per Partner’ list. Well… they made it. But they’re no longer working with us."
- ‘Working With Outside Counsel’ audience member; his company has more than 1,000 cases annually
 

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In May 2009, we hosted our inaugural Discovery Symposium, a Counsel On Call client event for a small group of heads of litigation, general counsel and e-discovery managers. We thought that by keeping the group small it would increase the likelihood of candid dialogue about what our clients are experiencing on a day to day basis, where they are struggling, and hopefully result in some real information sharing and best practices… and to help our E-Discovery Division improve and better meet their needs.

The feedback we received from the 35 in-house attorneys who attended the event indicated we achieved these goals, and several attendees made us promise that we’d organize the event again in 2010. So not only are we hosting it again (May 12-13), we’re stepping it up a notch with what we believe is even better programming that is more tailored to the diverse e-discovery knowledge levels of our attendees.

Best practices surrounding early case assessment and technology platforms will be a significant part of the program, as will process management, collaboration, budgeting and outside counsel relationships. We’ve also developed breakout sessions for those attendees without “robust” IT departments and for those highly knowledgeable about the litigation hold and ESI policy processes, among other topics. Panelists are from companies such as AT&T Mobility, AutoZone, Cox Communications, FedEx, Fidelity Investments, HCA, International Paper, Partners Healthcare, and SunTrust Banks, among others.

The response to the DS2.0 program has been tremendous, so much so that we’ve had to cap the registrations at 55 attendees from 40 legal departments across the country. It's a diverse group of Fortune 25 corporations, mid-size companies and smaller departments and we’re really looking forward to the event.

We’re also excited to once again “live blog” from the event, so please check in next week for recaps from each session. For more timely updates, you can also follow Chad Schmidt on Twitter (others to follow are listed on the menu to the right).

If there are any questions you'd like us to pose to our distinguished panelists, we'd love to hear from you... please just post in the comments.

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We've posted here before about the Gypsum/Drywall litigation, and thought it worth passing along that Barry Willms, Counsel On Call's Senior Attorney + Discovery Process Architect and a frequent Lawdable contributor, recently published an article on the subject in the March edition of The Westlaw Journal.

Barry has worked on some of the country's largest litigation matters of the past 15 years, and his concepts and processes regarding the centralized discovery repository have proven especially relevant for mulitjurisdictional litigation. When costs savings, efficiency, consistency and information management are essential, the centralized approach is a game-changer.

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Like alternative fee arrangements, Legal Project Management (LPM) has become somewhat of a new fad – or at least a very popular topic to discuss and write about. While it’s still unclear how much attention the broader legal landscape truly gives this discipline (although some are making a noticeable commitment to it), I’m of the opinion that LPM should be a key focus of the legal profession moving forward.

LPM is not only about getting things done cheaper and on time, it’s about using best practices and process to accomplish desired goals and budget predictability. To accomplish this, the project manager (PM) must have authority, as Paul C. Easton states in a recent blog post. It’s key, and not only with the attorney team, but with the different departments and personnel involved in any project. That level of responsibility requires experience and a track record – the ability to develop and oversee processes, meet benchmarks, stay on or below budget, and develop consistency -- and having done it many times over. Simply pushing the task down to the lowest possible billing rate, a practice Easton frowns upon in his post, is counter-productive in most instances.

While we commonly see its use in discovery-related matters today, LPM should be the focus of any-size project requiring coordination of more than one person and there have been many successful PM-led initiatives in other areas of the law. It doesn’t matter the area of law, really, because budgets, organization, timelines, process, quality standards, and repeatability are universally necessary considerations. Each is part of the LPM role, and each can be improved dramatically with a great PM. A PM who understands a client’s bigger picture is even more valuable and can help bring core disciplines from one department to another, building on previously successful practices (e.g. e-discovery to due diligence or employment work).

However, without authority – or at least a seat at the decision-making table -- the PM’s power to generate results is effectively non-existent. Spinning wheels, waiting for sign-off by the higher-ups on everything, direction that differs from previously successful results, and choices that are subject to constant overturning… this breeds confusion, stagnation, indecision, and ultimately higher costs.

If you go the route of project management, don’t go halfway. Make a commitment and give it the resources (and power) it needs to be successful.
 

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