Articles Posted in Outside Counsel

The US law firm, Howrey, is “the first AmLaw 200 firm to open an office in India to handle client work” (Am. Lawyer, Vol. 30, Feb. 2008 at 22). The firm’s policy is that clients can choose “whether to use the Indian office to cut costs or to have their work done in the U.S.” How will Howrey describe or estimate the options of projected costs other than with hourly rates?

Does this mean that a law firm ought to explain to clients that the firm will be using offshore resources and give the client the option to proceed that way or not (See my post of June 15, 2005: ethical rule regarding passing on savings.)?

An article in the Am. Lawyer, Vol. 30, Feb. 2008 at 16-17, describes the migration of a well-known bankruptcy partner from one law firm to another. At his new firm, Martin Bienenstock will lead a team — called the Business Solutions and Governance Group — that will “assemble corporate partners, litigators, and academics to assess a company’s options.” Academics?

Will law departments pay for the academics (See my post of Jan. 19, 2008: profusion of timekeepers.)? Does the firm intend to ask its client about the inclusion – and expenses – of the PhDs (See my post of Aug. 3, 2005: Baxter’s Litigation Advisory Board.)? Do similar restrictions apply to academics as to law firm lawyers on conflicts of interest and malpractice coverage?

About 18 months ago I published a contrarian article [click on the link for the PDF of it] Download put_eggs_in_one_basket.pdf on convergence. In it I challenged the validity of the arguments made in favor of law departments who dramatically reduce the number of law firms they retain. My critique drew on several posts (See my posts of May 1, 2005: “dark side” of partnering; April 2, 2006: challenges to convergence; March 15, 2006: institutional knowledge; March 24, 2005: concentrate spending instead of converging law firms; Aug. 21, 2005: what drives up absolute numbers; March 29, 2007: higher-cost firms; April 5, 2005: benefits of convergence beyond cost savings; Nov. 13, 2005: urge to converge goads law firm mergers; April 9, 2006: converge in the US; diverge overseas; Dec. 12, 2006: disclosure of names of converged firms; and May 3, 2007: trends pushing against convergence.).

Other items have commented on specific convergence programs (See my posts of; May 3, 2005: Merrill Lynch saves $16 million; Aug. 24, 2005: Marriott International; Sept. 13, 2005; a Board of Directors converges; Jan. 3, 2006 and April 22, 2007: Tyco saves $6 million;; March 30, 2006: Societe General’s panel review; April 4, 2006 #3: Heritage’s reduction of firms; and May 9, 2007: Northrop Gumman.).

After the article appeared, I returned to the theme of convergence several times (See my posts of May 13, 2007: forces that may slow the lock-in of converged firms; May 26, 2007: Allstate’s drastic cuts; Feb. 2, 2008: an interview and article about me on convergence; May 27, 2007: Akzo Nobel; July 20, 2007: YTC Worldwide; Jan. 19, 2008: retain two firms in each country; and June 18, 2007: Linde.).

Some time back I wrote an article [click to view PDF] Download when_law_departments_auction.pdf about various kinds of auctions that law departments might conduct. That article extended my thinking as expressed in several posts to that date (See my post of May 21, 2007 and 7 references cited.).

Since the article came out, only one other item on this blog has returned to the topic of auctions used by law departments to select law firms (See my post of Jan. 14, 2008: competitive bids and market cost.). Since I have continued to read just as widely, the drop-off in citations confirms my earlier view that it is the rare situation where an electronic auction makes sense for obtaining legal services.

Aric Press, Editor-In-Chief of the Am. Lawyer, Vol. 30, Feb. 2008 at 9, discusses layoffs by law firms. Rather than pink-slip associates, he speculates that law firms might decide to “sharply reduce the size of first-year classes.” He then notes offhandedly that “This means that some midlevels will be assigned to kids’ stuff, but so be it.”

So be it? Maybe from the law firm standpoint but law departments ought to be sharply on the lookout for experienced associates, with commensurate rates, doing the work of the junior associates who were not hired. Perhaps law departments should ask law firms to provide them with data about the size of their incoming classes (See my posts of Jan. 13, 2008: intervention by law departments.).

No self-respecting law department lacks its statement of principles and operating rules for its law firms. Many posts on this blog have commented on these outside counsel guidelines (See my posts of Dec. 17, 2007 on the profusion of outside counsel guidelines; Aug. 1, 2006 on their goals; and Jan. 8, 2008 on guidelines for intra-firm disbursements.).

Here are ideas for how you might improve your guidelines.

1. Shorten them. Even if you keep all of the content and structure of your existing guidelines, you can make them briefer. Cut verbiage.

David Hobbie posted a thoughtful comment on my blawg. Rather than reply there, which few readers will, I reproduce it below.

“Rees, as a former litigation associate who was sometimes belatedly staffed on very big cases with little awareness of the main strategy and facts of a matter, I agree with you in general on the inefficiency of “drive-by billers.”

In my current role, however, as a knowledge management attorney (in some respects like a UK PSL) I have frequently encountered people billing small amounts of time where that work was more efficiently done by those people. In particular, I’ve seen library research, trial practice, electronics pleadings, and knowledge management workers bill on a matter where that has helped the paralegals and attorneys avoid a significant learning curve (i.e., extra time) in carrying out those specialized tasks. While this is in part a function of the increasing complexity of our IT, court filing, knowledge management, and library systems, it is a fact of life that sometimes those people can do things faster and cheaper than the “line” attorneys, because they are doing those tasks all the time.”

Modesty should compel me to remain silent, but isn’t a modest blogger an oxymoron?

Deborah McMurray of Content Pilot was kind enough to interview me about some trends in how to manage outside counsel and was consummately skilled when she wrote an article about our discussion. Too shy to say more, I leave you with the barest impression of a link to her piece.

The 2007 ALM Research Survey Report on Billing Rates & Practices summarizes data from 5,058 law-firm respondents. About a third of those respondents were solo practices, 58 percent were from firms of 2 to 39 attorneys (“small firms”) and 10 percent practice in firms of 40 to 170 attorneys (“mid-size firms”). At page 1 of the Executive Summary the report states that “female attorneys, on average, tend to bill at lower hourly rates than male attorneys, regardless of firm size, years in practice, geography, and – with a few exceptions – practice area.”

An odd and disturbing finding, which is hard to explain. Maybe it is that women lawyers are less greedy, or they are not as tough negotiators, or they are less egotistical? I do not want to be strung up by feminists, so I am only speculating on what might account for the inexplicable disparity between the sexes. Perhaps there is still an old-boys network that favors male lawyers in firms? Perhaps the methodology of the survey skewed the results?

In November of 2007 I published an article about some down-and-dirty steps to make the implementation of an e-billing system go more smoothly. The article Download rees_morrison_practical_tips_on_ebilling.pdf offers a number of practical suggestions.

Since then, more posts have joined the group on this blog (See my posts of Nov. 20, 2007 on improvements to the LEDES format; Nov. 20, 2007 on an adverse effect on fee-bill reductions; Nov. 28, 2007 on internal staffing requirements; Nov. 28 and Dec. 2, 2007 on law firm complaints about e-billing; and Nov. 30, 2007 on mandating compliance by most law firms.).