Law Department Management Blog
An article published four years ago reports how Deloitte & Touche verified a Six Sigma project at DuPont. Deloitte looked at 18 employment cases concluded during a seven-year period. The project and Deloitte’s review evaluated whether ECA benefited DuPont (Gardner Courson and Thomas Sager, “Metrics for Success in DuPont’s Legal Risk Analysis” Chief Legal Officer, Summer 2002 at 29).
According to the article, Deloitte assessed the quality of the ECA process for each of the 18 cases on the basis of (1) whether it was timely — within 120 days of the first defensive pleading — and comprehensive; (2) whether it expressed the budget and strategy; and (3) whether the ECA analysis process was well documented. The accountants assessed the quality of litigation results on the basis of (1) client satisfaction, (2) outside counsel fees, (3) duration of the case, and (4) payment to the plaintiff. Deloitte found that high ECA quality generally resulted in lower plaintiff payments and higher client satisfaction – which are obviously related.
I admire deeply the decision and effort to analyze whether a cost-control technique actually produces results. At the same time, for a half-dozen reasons, I wonder about the validity of the article’s conclusions.
A. The article explains that in 1994 DuPont’s law department “began to emphasize” ECA. .Since the ECA procedures required by DuPont “evolved over the past decade,” how sound is it to compare cases that were early applicants of the method to later cases?
B. Because DuPont undoubtedly defended hundreds of employment litigation cases during the seven years, who chose only 18 cases and why them? A more controlled group of cases, such as only those alleging similar forms of discrimination or only those handled by the same law firm, not to mention a much larger sample, would have more credibility.
C. Why didn’t DuPont retain a consultant or analyst to do this study who was not on its preferred provider list, i.e., one who would have been less susceptible to reaching a conclusion that favored its client or that supported a technique it possibly recommended?
D. Why didn’t DuPont’s Six Sigma team publish its methodology and results, instead of having Deloitte superimpose something and two lawyers summarize Deloitte’s conclusions (See my post of March 7, 2006 on TRW’s law department and its Six Sigma analysis of trademark renewals.)?
E. Deloitte calculated that the “potential savings in outside counsel fees in the 18 cases were dramatic: $852,802 (emphasis added)” over the seven years. The potential savings were more than a third of the $2.3 million spent on outside counsel for those cases. How did the accounting firm arrive at the potential savings – which the article summarizes as “where ECA was rigorously followed resulted in … an average of 28 percent less cost.”?
F. Cycle time is not fully within the control of a defendant, unless the defendant profligately or prematurely agrees to pay a settlement. Outside counsel fees tend to correlate with how long a case continues; hard cases – where plaintiffs have good evidence of employment wrongs or novel causes of action – often take longer to resolve, including going to trial. What the study might have looked at, instead of absolute months and dollars spent, was the monthly burn rate (See my post of Feb. 20, 2006 on burn rate calculations.) In short, might it be that the more straightforward cases permit easier ECA, quicker resolution, and less spent – but the driver is the strength of the plaintiff’s case and the monetary damages that match.