Two decades ago, strict budgets, competitive bids, and contract attorneys publicized as cost-control methods

Than Luu of the Public Law Research Institute published a very informative paper in 1995 on much touted “the litigation explosion” (See my post of May 14, 2005: other findings from Luu’s paper.). Among other points he debunked the unfounded claim about hundreds of billions spent each year on US tort litigation.

Additionally, in the course of his thoughtful and well researched paper, he mentions three cost-control steps that show the historical roots of methods often talked about today as fresh and innovative.

Budgets. In 1991, two decades ago, the Bank of Boston “created a formalized pre-approval process in which the law firm was required to estimate the cost of the services it was to provide for each matter. In terms of billing, the law firm was required to submit its bills monthly using the Bank’s format, noting each attorney and legal assistant by name, the hours of each timekeeper, and a detailed description of the services rendered. The bills were then compared with the estimates originally proposed by the law firm. If the law firm exceeded its proposed budget, the firm would not be paid.” (citations omitted)

RFPs. In 1990, more than twenty years ago, Chrysler “pitted law firms against each other by asking them to bid for a defined piece of Chrysler’s new litigation matters. … First, it selects matters that will last a minimum of 20 days. Second, it selects matters that are reasonably well defined so that the law firms can give firm price estimates for the work to be rendered. Third, Chrysler sends a request to qualified law firms seeking their proposals. The request itself is usually a 30-page document detailing Chrysler’s wants, needs, bidding rules, and expectations. Finally, Chrysler selects the most qualified and reasonably priced firm based on the proposals they received. … Chrysler has been very pleased with the results of its bidding system. In one major litigation matter, for example, the bidding system saved the corporation an estimated 40% in legal costs. Moreover, the system has consistently produced high quality and prompt legal services from the winning firms.” (citations omitted)

Temps for Document Review. In 1995, long before the current e-discovery mess, there were contract reviewers. “Rather than assigning these document review tasks to expensive full time associates, many law firms have been hiring temporary attorneys on a contract basis to complete these tasks. … Hiring temporary lawyers not only offers the client a 20-50% savings on hourly billing rates, but it practically ensures high quality work because many of the temporary attorneys hired are over-qualified.”

There is nothing new under the sun.

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