Assailed by law suits, American International Group announced in May 2005 that it would pay the legal bills of its independent directors. According to unnamed securities lawyers, “AIG’s decision to pay its directors’ legal expenses is standard practice. In a separate post today, I discussed the complexities of board retaining…
Merck, battered by its withdrawal last September of Vioxx, faces possibly tens of thousands of lawsuits. According to the New York Times (July 23, 2005 at C6) “analysts say the current [Merck share] price factors in $10 billion to $18 billion in costs related to Vioxx.” By way of comparison,…
Several insurance companies offer policies for companies against legal costs and damages that can arise from IP litigation. One broker is Miller Insurance Services Ltd. in London [info@miller-insurance.com]; another is 2XFR, a service of TPSearchEngine. [www.2XFR.com] The policies cover defensive and offensive litigation. I have not encountered a company, let…
Like the Holy Roman Empire was neither holy, Roman, nor an Empire, “Total Legal Spending” as used in benchmark surveys is neither comprehensive, nor within the sole purview of the law department, nor cash out the door. [For example, see my post on May 30, 2005 about missing data on…
The latest Corporate Legal Times survey of law department – law firm sentiment tucks in a curious statement. The article states (at 38): “If a client is under financial pressure and a lawsuit appears unfounded,” law firms may offer alternatives to hourly billing. Well, except for a litigation being “unfounded”…
Consistently, benchmark surveys tell us that law departments spend 40 cents of every dollar on their inside costs and the other 60 cents on outside counsel. Year after year, this median ratio holds true. Why? If you knew nothing about law departments, wouldn’t you assume that the inside lawyers would…
It is difficult to obtain metrics about the costs of litigation [but see my posts of March 29, May 1 and 4, 2005 on patent litigation costs.] Thus, when the Sullivan Group’s Autumn 2002 report shared some data on D&O suits (from a 2001 Tillinghast Towers Perrin study), I grabbed…
Legalaffairs, in its May/June 2005 issue at pgs 10-12, discusses sending legal work to Indian firms. Here is the eye-popping metric: “The market for outsourced legal work is expected to reach $163 billion by next year, and India is positioned to seize the largest share.” [See my posts of Feb.…
An article in The Metropolitan Corporate Counsel (June 2005, pg. 48) presented a teaser of data on the costs of compliance with Sarbanes-Oxley Section 404. Jeffrey Steinberg, an Ernst & Young partner who was interviewed for the article, explained that E&Y’s most recent study “indicated that fifty percent of the…
I thought that the British system of requiring the losing litigant to pay the winner’s costs had the advantage of lowing overall legal costs. Everyone would eschew frivolous litigation out of justified fear of bearing the other side’s legal fees. For that reason alone, total legal fees as a percentage…