Is That Thunder In The Distance?

There’s an interesting phenomenon happening in the litigation arena right now: nothing.

Well, that’s not entirely true. There is plenty going on, of course, but the sour economy has put a different spin on how litigation is being managed. Cases are not marching in lock-step with a normal timeline. For instance, some companies are putting everything related to a piece of litigation on hold until they are required by time, or the case itself, to act. And action this time around is preceded (in most instances) by a lot of anxious planning and budgeting.

Now this isn’t anything new – many companies have longstanding policies not to act on litigation until forced to do so. It’s often a cash-flow-versus-workflow approach. However, I am seeing a palpable sense of hesitancy with regard to litigation and case management. Companies are taking an ‘I’ll believe it when I see it’ stance, whether it’s regarding the various stimulus measures and burgeoning economic turnaround, or the stability of a company and their department's budget, or any number of other things. That attitude is impacting case management. These companies know that eventually they are going to have more work (i.e. revenue), but they simply do not want to spend the money now, when times are tight, addressing litigation matters unless they have to.

All is not dour under this approach. One great side effect is that companies are taking this time to create, refine or institute their approach to e-discovery for when the storm finally does come. If their ducks aren’t already in a row, they are briskly walking toward the line.

We’ve participated in dozens of planning or strategy meetings that are seeking to solve the bigger issues: how to create repeatable discovery processes, how to budget discovery costs, the software tools to use, the action items surrounding a litigation hold, the data collection and management process, analyzing the benefits of early case assessment tools, and creating processes that facilitate collaboration with outside counsel and all their legal vendors, among many, many other issues.

All of this is ultimately focused on cost and efficiency, of course. And it’s never too early to make that a priority – or in some cases, it’s not too late.
 

Maximize Resources, Achieve 'Value'

You can’t scan a legal rag nowadays without seeing an article predicting the end of the billable hour, or the revamping of the business of the practice of law, or some other projection of how the practice is going to look at the end of this recession. Some insights are better than others, like the recent Law.com article about in-house departments requesting their outside counsel to reduce rates or present an alternative fee arrangement. Patrick Lamb’s commentary on the matter on his blog also really drew my interest – I think he hits the nail on the head.

Undoubtedly there is some room for firms to reduce rates and I believe, in time, the market will bear that out (I love the anecdote from a lawyer who told Susan Hackett at ACC that $700/hour was a “suicide” rate). But what’s more central – and the article skims over this while Patrick calls attention to it – is that hourly rates are really only a small part of the equation and that efficiency and quality are the key elements. I'd add one more factor to this cost-saving/value formula: maximizing resources.

Based on hundreds of conversations I’ve had with in-house attorneys in recent months, there really isn’t as much pushback on the partners’ high hourly rates. Sure, clients would like them to be lower, but they also understand you have to pay for great legal counsel. The real problem is at the associate level, where it’s much tougher in some instances to defend the value received. In many cases they’ve turned to smaller or regional firms to get the rates they seek across all levels.

But where we’re seeing in-house departments achieve budgetary success is in conducting an audit of the work that needs to be done and overlaying that with the available resources. Here’s a rudimentary example of how the process works for a fictional department that has (only) three operational units: litigation, contracts and labor and employment:

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How E-Discovery Has Helped Legitimize Contract Work

Nine years ago when we started Counsel On Call – we celebrated our anniversary on April 3 -- we had to work our tails off just to get a courtesy meeting with a client. We spent a lot of time in those meetings addressing uninformed stereotypes about contract lawyers who ‘couldn’t get a job in a real firm’ or were ‘too lazy to do the work.’ After talking in detail about the quality of our attorneys and how they simply didn’t want the big firm life, or had another interest they wanted to pursue in addition to practicing law, or wanted to spend more time with family, we started to get beyond those initial hurdles. Realistically, most everyone we met with knew an attorney that fit our model.

I’m glad to say that many of these prejudices have dissipated over the last decade, and I’m especially pleased to see that so many talented attorneys now choose to practice law in a non-traditional way. It’s more rewarding that clients recognize this as well. Most of our clients refer to our attorneys as Counsel On Call attorneys, or employment attorney, bankruptcy attorney, corporate attorney or discovery attorney … there is certainly more awareness that not every great lawyer works in a “permanent position” within a firm or in-house. It’s helped us get to the pressing matters at hand – ways we can provide our clients with effective business solutions that incorporate low-priced, experienced and highly qualified attorneys.

So what was the tipping point? This is difficult to say. First, the attorneys who have worked with Counsel On Call the last nine years have helped change the perception of our clients. Second, once clients started working with our attorneys, they realized how easy it really was, and how much value each attorney offered. Third, our clients were willing to share their experiences with others – most of our business has grown through referrals.

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