Law Department Management

Electronic-evidence data-discovery vendors (cottage industry)

Law Firm Inc., Vol. 5, Sept. 2007 at 43, lists 29 vendors (software packages) cited by 115 of the Am Law 200’s technology executives. The respondents could list more than one provider used by their firm.

The relevance of the following list to law departments is that they may want to choose one or two of these vendors and force their litigation firms to use that vendor (See my post of July 31, 2006 on national vendor arrangements.).

Here are the vendors listed and the percentage of law firms that mentioned them. Kroll Ontrack (62%), Lexis Nexis (38%), CaseCentral (26%), IPRO Tech (25%), FTI Consulting [Ringtail] (24%), Electronic Evidence Discovery (24%), FIOS (23%), Stratify (23%), DTI Global (22%), OnSite E-Discovery (21%), Renew Data (18%), Encore Legal Solutions (18%), Attenex (17%), Merrill (17%), Zantaz (16%), Pitney Bowes [CompuLit, Ibis Consulting] (16%), Guidance Software (14%), CaseData (11%), First Advantage Litigation Consulting (10%), Daticon (10%), Cricket Technologies (8%), Syngence (7%), Spi (6%), Alpha Systems (5%), Discovery Mining (5%), Dolphin Search (5%), and Capital (4%). Another seven percent use a custom in-house system and 21 percent use some other package.

Big-company demand dropped for national or regional e-discovery counsel

From Fulbright & Jaworski’s Fourth Annual Litigation Trends Survey at 23 comes data on e-discovery counsel. The text explains that the data pertains to “companies that have retained or considered retaining national or regional counsel specifically for e-discovery issues that arise in matters” (emphasis added). The findings report emphasizes the dramatic rise of this form of assistance from the previous year’s survey.

I interpret the results differently. Among the 117 companies with more than $1 billion in revenue, the percentage who answered affirmatively plummeted from 77 to 48. That drop might be because the new procedural rules were better understood this year, in-house experience with e-discovery has risen, or litigation firms have developed more skills so there is less need for a specialty firm to pitch in on e-discovery matters.

Fixed fees in litigation are rare, yet frequently preferred!

The findings report from Fulbright & Jaworski’s Fourth Annual Litigation Trends Survey at 20 states that “Half of all respondents in the survey [303 companies] have used fixed fees, but of those, most use them rarely.”

Note that it is possible that the question was something like “Have you ever used fixed fee arrangements in litigation?” so the look-back was not “in the past 12 months” or otherwise limited. But note also that around a quarter of the companies in the survey had revenues of less than $100 million, and thus had relatively few or small lawsuits.

Ironically, when the respondents ranked their “Preferred Alternative Fee/Billing Arrangement,” fixed fees was by far the most frequently preferred, at 42 percent, followed by volume discounts at 26 percent, hourly (14%), contingency fees (11%) and success-based billing (7%).

Interesting, too, that “The majority of survey respondents (59%) said they had never paid a premium fee.”

Team members don’t fire themselves or their colleagues

When faced with budget or headcount cuts, many general counsel create a team and charge that team to meet the objective. Teams can rethink the processes they engage in and teams can change relationships with outside counsel. Teams can chose and implement new software, and they can tackle many other management challenges, but teams cannot bring themselves to fire team members.

Only a general counsel can ultimately decide who and how many will be terminated. It just is not plausible that anyone on a team will volunteer to be terminated or nominate someone else on the team or in their reporting line to be terminated.

Because of this psychological and emotional limitation, teams may address cost solutions but not personnel solutions (See my post of Sept. 25, 2005 about the unique role of the general counsel.).

A lament from this blog host about reader silence – send me an e-mail

“Competition in the blogosphere favors the quirky loner who happens to have a knack for writing quickly and has something interesting to say." This sentence from the Wilson Quarterly, Autumn 2007 at 65, and hit my particular nail squarely on the head. Or at least the notions of a quick typing maverick hold true. As to the appeal of this ultra-micro-niche blog, since more than 250 people are automatically fed these blog posts, around 300 people a day visit the site, and 130 have signed up to receive the monthly compilations, what this odd-ball scribbles must interest some people.

Silence from almost all those readers, however, has held true from the beginning. I’ve given up hoping for comments, and mostly delete spam. But even a tiny email from you would hearten me.rwmorrison@hildebrandt.com I will write back! With no way to know you, blog reader, it's much harder for me to know how to improve this resource.

Bizarre market share data from 2006 to 2007 on e-billing software

A survey of the AM Law 200’s technology managers, reported in Law Firm Inc., Vol. 5, Sept. 2007 at 42, found which e-billing software providers somewhat more than half of those firms use (See my posts of Nov. 17, 2006 about how firms must accommodate multiple e-billing packages; and Feb. 21, 2007 on vexations for law firms associated with e-billing.). Last year I reported the results from a similar question from 116 respondents (See my post of July 11, 2006.); this year’s survey attracted 113 respondents. The year-over-year fluctuations are enormous, so there must be something about methodology that explains the swings.

The two most common in 2006 were CT Tymetrix (Tripoint/Direct Invoice) used by 31 firms and Serengeti (Tracker) used by 29 firms. A year later, CT Tymetrix dropped to 19 firm citations and Serengeti to 10! Something is amiss.

DataCert (AIMS) was third in 2006 with 17 firms citing its use, but jumped to 26 firms in 2007. LexisNexis (Counsellink, Examen) plummeted from 14 cites to one, while BottomLine Technologies fell from 8 to 3. I only have comparative market share data for those five systems. It just doesn’t make sense that last year the same number of respondents from the same pool of firms – there is no way to know if the respondents were mostly the same firms or not – reported 99 instances of those packages while this year they reported a mere 59 instances. Something is very misleading or wrong with this data.

Bridgeway (eCounsel), Oracle/PeopleSoft (eSettlements), Thomson Elite [5 firms in 2007], Eliot, and Litigation Advisor had at least 4 firms using them last year, but no data for 2007. Last year 28 firms used other packages; this year, without the breakout of the five just mentioned, 32 firms listed “other.” Last year, 29 of these huge US law firms reported that they used no e-billing software; a year later 32 said the same thing. As e-billing spreads, that increase in non-use among huge law firms defies belief.

Data on costs of discovery

From Fulbright & Jaworski’s Fourth Annual Litigation Trends Survey comes some data about the costs of “pre-production privilege reviews.” Half of the 253 US law departments that responded said that privilege review cost more than five percent of their budget in the last 12 months (See my post of Oct. 24, 2007 on the much-touted figure of 60 percent of all litigation expenditures going to discovery.). Bear in mind that 22 percent of the US participants were companies with revenues under $100 million while 42 percent had revenues greater than $1 billion (at 6).

For 30 percent of that group, they “estimated that privilege reviews comprised 6% to 10% of their litigation costs.” For 16 percent of them, these costs went as high as one-third to one-half of their litigation budget (at 24). The findings report adds: “Most of the latter figure consisted of the mid-sized and the largest companies participating.” In the US group, 10 percent of the companies (25 of them) spent over $10 million on litigation (at 16).

In short, one portion of discovery -- pre-production privilege reviews, which constitutes a large portion of “discovery” but not all, came nowhere near 60 percent.

Seven tips for more effective RFPs by a law department

My article on how to craft more effective requests for proposals appears in Corp. Counsel, Vol. 14, Sept. 2007 at 84.

The more I consult to RFP projects, the more I realize you have to tell law firms fairly precisely what you want back from them. Open-ended questions such as “Please describe alternative fee arrangements you might propose" will not give you sufficient specificity.

If, however, you outline the four parameters that will govern the fee arrangement -- perhaps tiered discounts, rates frozen for a certain time, an expected bonus range, and the three lawyers who work most on the project -- you are more likely to get back comparable and useful responses.

A second tip that I would add, which is not in the article, is that you cannot foresee when you first prepare and send out an RFP all that you will need to ask for. You must study the first-round responses and then shape a more specific and narrower second request of those law firms that make the cut.

Innovation with technology compared to automation

At a recent conference, Mark Chandler, the General Counsel of Cisco, made an interesting distinction (See my post of March 8, 2007 on an earlier Chandler speech.). A law department can use software to streamline and speed a process such as producing the first draft of a common agreement. He terms that improvement automation. To be able to search through all of the online minutes of the corporation would be automation. People can do the same thing without automation but we are much slower.

In contrast, a more radical use of software would be, for example, electronic billing. Invoices delivered through electronic submission changes the method of review, the circulation of approval, the accuracy of the data, as well as the speed of everything. Chandler terms that technology. Dramatic improvements in productivity follow from technological innovation (See my posts of June 27, 2007 with three examples of law department productivity enhancers.).

Chandler’s distinction rests on the difference between improvement through automation and a jump in productivity through technology.

The dirty secret about cost control: lawyers on the line don’t really want to do it

The thought has troubled me for some time that in-house lawyers who manage outside law firms have very little reason to control costs (See my post of May 26, 2006 on rubber hitting the road.). All the wonderful systems and processes and external incentive systems pale in comparison to what a motivated and dedicated in-house counsel can do. But they don’t.

So I wrote an article, published in Legal Times, Sept. 2007, that offers some suggestions for how to involve individual lawyers in a campaign to spend law department dollars more wisely. Here is the article.