8:30 a.m., 7 December 2016

Transcription

1

2 8:30 a.m., 7 December 2016

3 Leveraging the In-House and Outside Counsel Relationship - Driving Value for the Client through Thoughtful Matter Staffing and Alternative Fee Arrangements

4 Overview Introductions and Background Developing the in-house counsel / outside counsel relationship Strategies for Efficient Matter Management Strategies for maximizing the relationship to drive value Strategies for shifting work to junior associates Minimizing and budgeting costs Document management Access to project personnel Budgeting and cost tracking Alternative fee arrangements

5 Introductions to Presenters Brian Rice Assistant General Counsel and Chief Litigation Counsel RailWorks Corporation New York New York John Margie Partner Glaholt LLP Toronto Canada Greg Faulkner Partner Robinson and Cole Hartford Connecticut Josh Strub Associate Glaholt LLP Toronto Canada

6 Developing the Client Relationship at the Outset of a Matter What is the in-house counsel s intended role on the matter? What is the in-house counsel s background prior to moving in-house? How significant is the matter to the company and what are the company s objectives? How does the in-house counsel want the work managed, as between partners and associates?

7 Developing and Managing the Relationship What are the in-house counsel s reporting requirements, including budgeting, and how is the client s internal management team structured? What forms of communication does the in-house counsel prefer ( s; memos; conference calls)? How engaged is the project team on the matter? To what extent can outside counsel work directly with the project team?

8 Structuring the Legal Team How does the in-house counsel and firm want the legal team to be structured? Diverse legal team Role of in-house counsel Role of senior outside counsel Role of associates of different levels Use and role of claims consultants Outsourcing work

9 Changing the Role of Associates In-house counsel often want much of the work to be done at the partner level. Partners often want to develop a close relationship with the client and want all commutations with the client to run through them. These factors often lead for a reduced role for associates, which results in high costs and associate dissatisfaction.

10 Strategies for Enhancing the Role of Associates Allow associates to have direct access to in-house counsel (while keeping partner advised of developments) Allow associates to perform tasks independently and report on those tasks directly to in-house counsel (with appropriate partner supervision) Partners should seek feedback from in-house counsel regarding the associate s performance

11 Case Study RailWorks Claim Initial claim size was ~$2 million and wanted to staff the file with a junior associate Claim turned out to be larger and more complex On-going project Multiple project sites and project owners as part of the transit system Multiple parties, including international parties Owner threatened to tear out the entire system, significantly changing the nature of the claim

12 RailWorks Case Study Working relationship between junior associate and inhouse counsel Role of the in-house counsel when working directly with a junior associate Working relationship between the associate and the project team and senior management Role of senior counsel Ethical issues: law firm exposure Importance of an open-door policy in the law firm

13 Other Strategies for Maximizing Value and Limiting Costs Access to project personnel Document management Budgeting and cost tracking Alternative fee arrangement

14 Managing project documents and document hosting vs. Photo credit: Photo credit: Document-Management/ID/150/The-Benefits-of-Document- Management-Software-for-a-Small-Legal-Practice

15 Budgeting and Cost Tracking Importance of budgeting Understanding limitations of budgeting Costs associated with budgeting and cost tracking Building client time into budgets Budgeting and managing the costs of experts

16 Cost Management Orders Being rolled out in the Technology and Construction Court in the UK Parties file and exchange budgets setting out estimated costs for each stage of proceedings Parties seek agreement on budgets and court may make a cost management order, recording the extent to which the budgets are agreed or not agreed, record the court s approval of a budget, and make appropriate revisions In managing the case, courts will have regard to the agreed and approved budgets When assessing costs, courts will have regard to the last approved or agreed budget and will not depart from it unless satisfied that there is good reason to do so

17 Alternative Fee Arrangements Blended rates Fixed fees / Cost not to exceed Monthly retainers Creative solutions to create a win-win Contingency fee or success fee Fixed fees and reduced hourly rates

18 Importance of Alternative Fee Arrangements to In-house Counsel Predictability regarding costs Value Delivered Quality of Services meets or exceeds Costs Ability to develop a stronger relationship with a firm outside counsel as a trusted advisor Risk Sharing Alignment of risks/rewards for outside counsel and client Monitor, Manage and Reconcile

19 Blended Rates In general, there has to be a level of trust between outside counsel and in-house counsel in order for alternative fee agreements to be mutually beneficial When do blended rates drive value?

20 Blended Rates Hourly Rate Blended Rate 2nd Year Associate $250 $400 5th Year Associate $375 $400 Junior Partner $550 $400 Senior Partner $725 $ nd Year Associate 5th Year Associate Junior Partner Senior Partner

21 Blended rates Hourly Rate Blended Rate 2nd Year Associate $250 $400 5th Year Associate $375 $400 Junior Partner $550 $400 Senior Partner $725 $400 $350,000 $300,000 $250,000 Monthly Spend $200,000 $150,000 Normal Rates Blended Rates $100,000 $50,000 $ $3,000,000 $2,500,000 $2,000,000 Cumulative Spend $1,500,000 $1,000,000 Normal Rates Blended Rates $500,000 $

22 Fixed Fees When are fixed fees appropriate? Discrete tasks: Affidavits of documents Contract review Deposition/discovery Benefits of fixed fees Drawbacks of fixed fees Work driven to junior lawyers You get what you pay for

23 Reverse Auctions Company issues RFP Firm submits proposal, detailing credentials, experience, proposed team, etc. Company creates a short list of firms Company breaks work down into stages and asks firms to provide estimates for each stage Estimates posted online for 24 hours for all competing firms to see 20 to 30 minute live (through software) reverse auction Company assesses bids and announces winner

24 Monthly Retainers Fixed fee Varying Structures Unlimited hours vs. Fixed number of hours Whose time are you buying? How is the work delegated? What happens when you exceed the agreed number of hours? Benefits to the client Benefits to the law firm Benefits to the work/files

25 RailWorks/R&C Monthly Retainer Model Assumption Anticipated monthly commitment of agreed number of hours at blended hourly rate. Anticipated work to be handled at a midlevel to senior associate level with some partner oversight. Target Fee Multiply monthly hourly commitment times blended hourly rate for twelve month period. True Up If total hours expended during 12 month period exceeds anticipated hours by an agreed margin, RailWorks pays for additional time at discounted rate. If the total hours expended during the twelve month period are less than the anticipated hours for the twelve month period by an agreed margin, R&C refunds RailWorks ten percent of the amount billed for the twelve month period that falls below the margin.

26 Contact Information Brian Rice: John Margie: Greg Faulkner: Joshua Strub:

27 THANK YOU

28