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These are some items from various publications that we see as relevant to litigation management. ALC will generally not specify the names of firms or attorneys in these reports so as to avoid appearing to criticize or endorse anyone. Identities will be reported when they contribute substantially to the relevance of the report. January 27, 1999. The general counsel of a major Bay Area university is very critical of law firms for their failure to provide practical, service oriented, work. He reports that at the last meeting of the American Corporate Counsel Association there was extensive criticism of outside firms for out of control budgets and overdone projects, among other things. For his university’s legal needs he has created a "dream team" of attorneys from 8 firms. It has proven more effective and less costly. This "virtual law firm" functions as a team, partly because the general counsel focuses on team management. The Recorder, page 1. The general counsel’s remarks are not limited to litigation management, but they do reflect many of the same ideas about legal service management that Allegiance endorses. It is noteworthy that he seeks to create a team of the best attorneys from several firms. January 13, 1999. On February 1, 1999, a prestigious Silicon Valley firm will start paying first year associates a salary of $95,000 with a guaranteed bonus of $5,000. The previous starting salary was $87,000 with a $4,500 bonus. The salaries for all levels of associates will go up. For example, fourth year salaries will go to $112,000 from $103,000. This step was taken to insure a competitive position nationally in the quest for hiring highly qualified young attorneys. The Recorder. While this is dramatic, there have been similar jumps in associate compensation during many of the last five years. It is obviously not justified by inflation. It is very significant because it puts tremendous pressure on fees and profits. Clients are increasingly resisting high fees, or fee increases, especially those with enough legal business to command attention with the law firms. However, the Wall Street Journal reported on 9-28-98 that fees are rising due to the strong economy and heavy demand for attorneys in corporate finance [M&A] and litigation. Law firms will do everything they can not to absorb the higher costs and thus lower profits. In addition to raising fees, they will undoubtedly turn to increased use of inexperienced junior attorneys to maintain profits. The small to medium company faced with critical litigation may be a target of opportunity for firms facing this profit squeeze. It does not have cnough legal work to give it a good bargaining position for rates. It also does not have the expertise to assess the law firm's approach to staffing and the amount of work. November 11, 1998. A new firm, specializing in litigation, was formed in the middle of 1998 by senior attorneys from a large and prestigious Bay Area firm. It is reported that the break off was caused by a difference of opinion in how to run a litigation practice. The break away group believes in involving a higher proportion of senior attorneys on significant litigation, and in turning down work rather than getting over committed. The large firm reportedly saw this as contrary to its growth plan. One of the partners in the new firm says it will be a "bet the company" litigation firm, heavy with partners. Another partner says: "We're engaged by very sophisticated clients in very important matters. They are resource-intensive, complex matters that require very careful analysis and execution." The Recorder. This report reflects the principles which form ALC’s approach to significant litigation. When you need careful analysis and execution to maximize the result, you want more senior and less junior attorneys on your team. This report is an unusually frank insight into the way the law firm business model may not always be the best for clients. September 1998. The American Lawyer, in an article about a change of litigation counsel by a larger tobacco company, reported that a prestigious New York law firm had been charging the tobacco company 3 to 4 times the rates it was paying to contract attorneys and clerks for managing documents. At page 15. Firms often resort to "contract" attorneys or paralegals to handle overwhelming work loads. The handling of documents in large litigation can be such an overwhelming task. "Contract attorneys" are available for temporary work. There are now many contract attorney companies with rosters of available attorneys and paralegals. A company in major litigation should consider the use of contract help to manage documents, or possibly other tasks. This is common practice by large companies with established legal departments handling their own document management. While a 400% markup is pretty unusual, markups by law firms for such "contract" help of 100% and more are common, and big savings can be realized by doing it yourself. |