Convergence just short of total outsourcing at Levi Strauss

“Orrick, Herrington & Sutcliffe is earning a flat fee to handle all of the legal work worldwide for Levi Strauss & Co., other than its brand protection work, the Recorder reports. If work needs to be done where Orrick doesn’t have an office, it will hire an outside law firm at its own expense. Orrick wouldn’t disclose how much the Levi’s deal is worth, but the story calls the deal a “multimillion-dollar arrangement.” Twenty-five percent of its fees comes from alternative billing.” This news comes from the ABA Journal’s website.

Since Levi Strauss’s revenue for 2008 was $4.36 billion, at typical ratios its total legal spending would have been about 0.3 percent, of which 60 percent or so would have been spent on outside vendors. On those figures and estimates, the company would have spent approximately $7.8 million on external legal costs. Taking away ten percent from that for non-law firm expenditures, and guessing that brand protection work for such an important brand is substantial, the deal with Orrick could well be in the $4-to-$6 million dollar per year range. The next step would be a reprise of Continental Bank in 1991 – a wholesale transfer of the internal legal department to the law firm.