Corporate Litigation Data Survey

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Corporate Litigation Data Survey Facts & Analysis In Partnership With 2015 Consero Group. Reproduction Prohibited.

INTRODUCTION Corporate Litigation Data Survey Today s Chief Litigation Officers are among the busiest and most critical of all corporate employees. Given their role in managing a wide variety and ever-increasing volume of complex litigation, as well as involvement in big-picture legal strategy, these senior corporate executives have more on their plates than ever before. Fortunately, there is an increasing number of valuable services available to support these executives. And with the proper resources, Chief Litigation Officers can effectively protect their organizations from legal risk and control costs, while also playing a key role in the strategic direction of the business. Survey Methodology And Structure Consero s 2014 Litigation Survey, developed in partnership with Serengeti, a Thomson Reuters business, was produced in connection with an invitation-only event hosted by Consero Group in October 2014 for Chief Litigation Officers from Fortune 1000 companies. While the survey was limited to 55 participants, the answers provide valuable insights into the challenges, concerns, and opportunities of senior legal executives. Table Of Contents 3 4 5 6 8 9 10 Internal Overview Budget Considerations Working With Outside Counsel E-Billing And Metrics 11 12 13 Conclusion Consero Serengeti, a Thomson Reuters business 2 2015 Consero Group. Reproduction Prohibited.

INTERNAL OVERVIEW Internal Overview Chief Litigation Officers face tremendous strain within their organizations, given current levels of corporate risk and associated costs. An overwhelming 72% of survey respondents reported that the pressure to become more efficient and better manage legal spend has increased in the past year. Reflecting the need for more in-house support, 34% of those surveyed reported an increase in the size of their internal litigation team during the past year, while only 18% experienced a decrease. Figure 1: How has the size of your internal litigation team changed over the last 12 months? 48% Did not change 34% Increased 18% Decreased Figure 2: Did you see an increase in shareholder activism over the last 12 months? 86% No 14% Yes Figure 3: In the last year, the pressure on our law department to become more efficient and better manage legal spend has: 72% Increased 28% Did not change 0% Decreased 3 2015 Consero Group. Reproduction Prohibited.

BUDGET CONSIDERATIONS Budget Considerations The high cost associated with legal disputes forces budget considerations to be a top focus for many litigation departments. Forty-six percent of Chief Litigation Officers surveyed predict an increase in outside counsel expenditures in the next year, with only 20% predicting a decrease, making budgeting even more critical for corporate success. An even greater percentage (58%) expect an increase in internal expenditures, reiterating the growing recognized value of internal law department functions. Greater use of budgets to control spending and predict costs is reflected in the responses of almost a quarter of Chief Litigation Officers, who report that 76-100% of their caseloads are pre-budgeted with their law firms, with only 11% not using matter budgets with outside counsel. Putting such budgets in place often leads to a realistic evaluation of costs at the beginning of a case, helps set expectations with outside counsel about the agreed level of activity, and leads to strategic matching of costs with potential exit points. Figure 4: Do you believe that your legal department s outside counsel expenditures will increase, decrease or stay the same over the next year? Figure 5: Do you believe that your legal department s internal expenditures will increase, decrease or stay the same over the next year? Increase 46% Remain the same 34% Decrease 20% Increase 58% Remain the same 22% Decrease 20% 4 2015 Consero Group. Reproduction Prohibited.

BUDGET CONSIDERATIONS Figure 6: For what percentage of matters handled by outside counsel do you currently have an agreed written budget with outside counsel? 11% 28% We do not use matter budgets with outside counsel 1% to 25% 20% 15% 26% to 50% 51% to 75% 26% 76% to 100% 5 2015 Consero Group. Reproduction Prohibited.

WORKING WITH OUTSIDE COUNSEL Working With Outside Counsel Outside counsel are retained to provide expertise on specific matters and to help improve litigation outcomes. In the past year, more than half (51%) of surveyed Chief Litigation Officers have moved some work from an AmLaw 200 firm to a smaller firm. Although CLOs believe the number of domestic law firms used will remain about the same in the coming year, for international work a much larger number (33%) expect the quantity of their global firms to increase rather than to decrease (8%). A worthwhile best practice to ensure continuity of service and performance with outside counsel is to establish written terms of engagement that put in place consistent policies across all outside counsel. Nearly two-thirds (63%) of the surveyed Chief Litigation Officers have written engagement terms set by their law departments for more than half of their litigation. More than half (59%) of respondents do not provide performance/ evaluation feedback to their outside counsel. Those law departments that do have formal project evaluation processes often identify areas of process improvement, capture lessons learned to prevent similar legal issues, and collect work product for re-use in similar projects. Figure 7: Do you believe the number of law firms (international) that you will use over the next year will increase, decrease, or remain the same? Remain the same 59% Increase 33% Decrease 8% 6 2015 Consero Group. Reproduction Prohibited.

WORKING WITH OUTSIDE COUNSEL Figure 8: Do you believe the number of law firms (domestic) that you will use over the next year will increase, decrease, or remain the same? Remain the same 55% Decrease 25% Increase 20% Figure 9: During the past year, has your legal department moved any work from a large law firm (AmLaw 200) to a smaller law firm (non-amlaw 200)? 14% No 49% Yes, occasionally 37% 49% Yes, as part of 14% larger strategy 37% 7 2015 Consero Group. Reproduction Prohibited.

WORKING WITH OUTSIDE COUNSEL Figure 10: For what percentage of matters handled by outside counsel do you currently have written engagement terms set by your law department (not engagement terms set by your law firms)? 15% 8% 12% 17% 76-100% 48% 51-75% 15% 48% 26-50% 8% 1-25% 12% We do not have 17% engagement terms/ billing guidelines Figure 11: During the past year, in what percentage of matters handled by outside counsel did you provide a formal evaluation (written or oral) to the firm after project completion? 2% 4% 7% 76-100% 2% 28% 51-75% 7% 26-50% 4% 1-25% 28% We do not provide 59% performance evaluations/feedback to our outside counsel 59% 8 2015 Consero Group. Reproduction Prohibited.

E-BILLING AND METRICS E-Billing And Metrics Legal e-billing has become a mainstream technology for law departments and their law firms. Fifty-eight percent of respondents use a third-party e-billing system to process, report on, and control outside legal spending more efficiently. Reported savings from the use of e-billing systems are significant, with seventy-nine percent reporting that it has resulted in a tangible savings of up to 25% in annual outside counsel spend, and 21% reporting even higher levels of saving. In looking forward, Chief Litigation Officers plan to collect metrics primarily focused around budgets and spending. Approximately eighty percent will focus on general budget data (both internal and external), and 61% will also collect total expense by law firm for a particular group of matters. Approximately half (46%) report comparing their legal spending to the company s revenues and expenses for example reporting legal spend as a percentage of company revenues to show whether legal spending is rising slower or faster than company revenue generation. Figure 12: Do you use a third-party e-billing system to process your legal bills? Yes 58% No 42% 9 2015 Consero Group. Reproduction Prohibited.

E-BILLING AND METRICS Figure 12a: If yes, what percentage of your legal department s annual outside spend is saved through initiatives enabled by your e-billing software? 1% to 25% 79% 4% 4% 13% 26% to 50% 4% 51% to 75% 4% 79% 76% to 100% 13% Figure 13: What percentage of your firms are connected to your system for submitting bills, both domestic and foreign? 6% 2% 1% to 25% 6% 26% to 50% 2% 44% Above 50% 47% 47% We do not use 44% third-party e-billing software. 10 2015 Consero Group. Reproduction Prohibited.

E-BILLING AND METRICS Figure 14: What metrics does your legal department plan to collect over the next year? (Select all that apply.) 61% 46% 41% 78% 39% 15% 15% 78% General budget report data (both internal/external) 61% Total expense by firm for a particular group of matters 46% Legal spend as a percentage of revenue and/or expense 41% Number of matters opened/closed by business line 39% Percentage of legal spend for dispute resolution/other types of work 15% Savings reports by business unit 15% Our legal department has no plans to collect metrics 11 2015 Consero Group. Reproduction Prohibited.

CONCLUSION Lessons For The Industry Chief Litigation Officers will inevitably be faced with pressure to execute their functions more effectively and to control spend more efficiently in the coming year. This will require successful partnership with outside counsel and a larger focus on more carefully managing budgets, projects, and metrics. Fortunately, by keeping the lines of communication open, and by utilizing collaborative technologies for spend management, budget tracking, document generation, and status/result reporting, in-house counsel can reduce costs and achieve better results, while having more time to devote to the strategic initiatives of their companies. 12 2015 Consero Group. Reproduction Prohibited.

How Is Consero Different From Other Conference Companies? Branded as the anti-conference company 1, Consero s model is a vast improvement over the traditional model for conferences and trade shows in several important ways. Exclusivity, Intimacy, and Commonality. Consero puts its executives first. Unlike other conferences, a Consero Forum brings together executives with common levels of experience and seniority, as well as similar business challenges. This ensures optimal networking and collaborate development of best business practices. Original Content and Thought Leadership. Consero views its events as a means to an end solving business problems. Consero prides itself on generating exceptional, original content that contributes to practical discourse, yielding impactful takeaways that help participants to improve their own performance, as well as that of their departments and organizations. By permitting its programs to evolve until the Forum takes place, Consero can integrate the most current significant developments e.g., a late-breaking Supreme Court decision impacting antitrust law into the solutions that emerge from the Forum. This focus on world-class content is an important differentiator for Consero. What Problems Does Consero Solve? Today s senior executives are busier than ever and inundated with information, too little of which addresses their specific current needs. Consero brings together those senior executives so that they can learn from one another in an efficient, exclusive format, and build relationships that facilitate ongoing post-forum dialogue. One of the primary components of a Consero Forum s substantive program is its KnowledgeBridges, 10- to 15-person roundtable discussions on specific topics of interest that relate to common business challenges. During these highly interactive discussions, each moderated by an industry expert, executives share ideas and address particularly difficult problems with their counterparts in the room. There is no substitute for this kind of professional learning. In addition to superior educational opportunities, Consero Forums expose senior executives to participant-requested and Consero-vetted industry solution providers that offer innovative enterprise solutions to business issues identified by the executives themselves. Consero s highly selective criteria for solution providers and insistence that those companies send their own executives (not salespeople) ensures that Consero executives are constantly educating themselves about world-class solutions that can improve their business. 1 Gonsalves, Antone. Consero Takes Aim at Bored C-Suiters with Its Anti-Conferences. Bloomberg. Jan. 28, 2011. <www.bloomberg.com/news/2011-01-28/consero-takes-aim-at-bored-csuiters-with-its-anti-conferences-.html> Jan. 28, 2011. 13 2015 Consero Group. Reproduction Prohibited.

Serengeti is the in-house legal profession s highest-rated and most widely used online system for ebilling, matter management, and performance analytics. Serengeti incorporates the best practices from leading legal departments worldwide to increase cost control, reduce spend, and drive efficient collaboration, both internally and with external law firms. With nothing to install, and connections already in place with virtually all corporate law firms, startup is quick, generating net savings in the first year of at least 5% to 15% of outside legal spending. With more than 250,000 legal professionals in 200 countries, including over 800 law departments and all of their outside counsel worldwide, Serengeti is used effectively by law departments of all sizes, from solo GCs to some of the largest law departments in the world. 14 2015 Consero Group. Reproduction Prohibited.

Opportunities To Participate at Future Consero Forums may be available on a limited basis. Please contact our team for additional information. Consero Group consero.com inquiries@consero.com 4915 St. Elmo Ave., Ste. 100 Bethesda, MD 20814 United States Tel (202) 595-9300 5 Fitzwilliam Square East Suite LG1, Dublin 2 Republic of Ireland T +353 (0)1 905 9401 2015 Consero Group. Reproduction Prohibited.