Presenting a live 90-minute webinar with interactive Q&A Strategies for In-House Counsel to Reduce Litigation Costs: Insourcing, Bill Review, Managing Outside Counsel and More THURSDAY, OCTOBER 13, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Merril Hirsh, Partner, Troutman Sanders , Washington, D.C. LeeAnn Jones, Partner, Taylor English Duma , Atlanta R. Patrick White, Of Counsel, Gilson Athans , Atlanta The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Strategies for Reducing Costs of Litigation by In-House Counsel Presented at CLE Webinar Strafford Continuing Education Webinars October 13, 2016 Panelists: Merril Hirsh, Troutman Sanders LLP LeeAnn Jones, Taylor English Duma LLP R. Patrick White, Gilson Athans P. C.
Pre-Dispute Techniques: Understanding what you are getting, before you need to buy it. Don’t just complaint about the weather …. Do something about it! 6
Reducing Litigation Costs by Reducing Litigation OR Can you avoid the next fight before it starts? • Investigation • Negotiation • Mediation • Project Management/Ombuds Can you make the fight less costly? • Arbitration • Whose, Where, What Rules and Why 7 • Getting the Resolution You Want
Plan for the Litigation … Before it Plans for You Topic A: The Cases You Expect – Minimizing Risk – Early investigation/assessment – Document/data management – Consistency – Efficiency – Predictability 8
Early Case Assessment • Better and lower cost discovery • More disciplined case management • Better settlements • Better business results 9
Topic B: The Cases You Don’t Expect The Big Case Problem – It’s big – It’s episodic – It isn’t the time people are thinking about efficiency – It’s a jungle out there 10
The Professional Problem • How much do you know about your dentist? • How much of what you know does your management know? 11
The Lawyer Problem • “I’ll handle your bet the company case for less” – a marketing pitch that needs work • Pessimism as a way to a better life • The lack of genuine experience among experienced lawyers • The world doesn’t do a good job of incentivizing efficiency 12
Problem Solving • Find Professionals who will help you solve your problem • Become informed consumers. • Make your own client informed. • Create a culture with outside counsel that cases should be litigated “smartly” and not just more and that reasoned decisions not to pursue matters will not be punished. • Think about dispute resolution – arbitrators, special masters. • Do not just defer to outside counsel’s choices – require a budget, require significant litigation expenses to be approved and justified and constantly revisit the exit strategy and how actions serve to promote it. • After cases are resolved, debrief counsel on how the case was handled, what lessons can be learned, and retain firms for repeat business because they have earned it. 13
PRICING FOR VALUE. 14
Negotiating Pricing: Hourly Rates. Fixed Pricing. Contingent Pricing. Volume Pricing. Others. 15
Changing fee structures alone will not increase client value. Client fees = Firm costs + partner profits. No matter how a firm structures its fees, its aggregate fees charged can never be less than the sum of its costs plus profits. To reduce aggregate fees charged, law firms have to cut costs or accept lower profits, not just change fee structures. 16
Pros and cons of different fee structures: Fee Structure Some Key Features Links price to effort. Relatively easy to implement. Hourly Decouples price and outcome. Limited price certainty. Maximizes price certainty. Links price to perceived client v. Fixed Requires significant up front work. Decouples price and effort. Decouples price and outcome. Links price to outcome. Requires significant up front work. Contingent Decouples price and effort. Requires premium pricing for successful outcome. 17
WHY IS IT SO HARD TO REDUCE FEES? 18
SELECTING COUNSEL FOR VALUE. 19
Does case require outside counsel? Size of case. Precedential value. Availability of internal resources. Familiarity with client vs. broader perspective. 20
When choosing among qualified lawyers, consider firm structure, not just fee structure. Client fees = Firm costs + partner profits. No matter how a firm structures its fees, its aggregate fees charged can never be less than the sum of its costs plus profits. Does your case require the costs that your law firm will pass on to you? 21
Firm Models Solo Boutique Large firm 22
Plusses. Quality lawyers across many practices. Large standing labor pools. The “IBM factor.” Minuses. Quality not always uniform. Costs. Conflicts. Large firm 23
Plusses. Quality lawyer in particular practice. Low overhead. Few conflicts. Solo Minuses. Lack of “IBM factor.” Not a “one - stop shop.” Limited internal resources. 24
Plusses. Quality lawyers in select practices. Well-tailored cost structure. Partner-centric work teams. Fewer conflicts. Minuses. Lack of “IBM factor.” Boutique Not a “one - stop shop.” No massive standing army. 25
Bill Review Tools History In The Insurance Industry • 1985 – 1995 Asbestos Bodily Injury Suit Costs Skyrocket • 1995 – 2000 Third Party Auditors Retained to Analyze Billing The Defense Bar Attacks Due to the Attorney Client Privilege • 2000 – Insurers Establish Internal Bill Review Departments Supported by Legal Billing Software Bill Review Is Successful In: Ensuring Adherence to Guidelines • Avoiding Duplication of Work • • Reducing Research Time BUT • Reviews Do Not Monitor Whether the Agreed Litigation Strategy is Followed 26
Further Reading By Merril Hirsh • “ Overlitigation is Killing Us: How In-House Counsel Can Get the Service They Deserve,” C ORPORATE C OUNSEL (May 2016). • “We’ve Just Made Peace, Let’s Address the Next War: Taking Some Care To Get Dispute Resolution that Works for You,” T ROUTMAN S ANDERS P RIVATE E QUITY Q UARTERLY (Summer 2016) http://www.troutmansanders.com/we-just-made-peace-lets-address-the-next-war-taking-some-care-to-get-dispute- resolution-that-works-for-you-08-25-2016/ reprinted in L AW 360, September 1, 2016 ( copy attached) • “ Writing Arbitration Clauses to Get the Arbitration You Want ,” with Nicholas Schuchert. Law 360 (August 2016) https://www.law360.com/articles/826544 ( copy attached) . • “Special Masters: A Different Answer to a Perennial Problem,” ABA T HE J UDGES J OURNAL with James Rhodes and Karl Bayer, v. 55 No. 2 (Spring 2016) at 26 http://www.troutmansanders.com/files/Uploads/Documents/JJ_SP16_v55n02_HirshRhodesBayer.pdf ( copy attached ). 27
Further Reading By LeeAnn Jones and Jay Patton • "Managing Repetitive Litigation: 5 Tips to Improve Outcomes and Reduce Costs," InsideCounsel, March 7, 2014, LeeAnn Jones and Jay Patton • "Taming the Discovery Monster Through Effective Management," InsideCounsel, February 21, 2014, LeeAnn Jones and Jay Patton • "Litigation: Effective Use of Early Case Assessment," InsideCounsel, February 7, 2014, Jay Patton and Michele Stumpe • "Litigation: 5 Strategies and Tactics to Manage Risk and Reduce Exposure," InsideCounsel, January 29, 2014, Jay Patton 28
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