The Biznow breakfast symposium: “use contract attorneys more …”

This past Friday, September 25th, Biznow sponsored a breakfast symposium on the rapidly changing relations between law firms and corporate law departments (click here).   One of our Posse List staff members, Scott Madsen, attended and his review follows:

At a symposium today in DC (entitled “Hot topics in Law Firm – Law Department Relations”) there were some interesting comments regarding the market:  part of the new business model for BigLaw is to use more contact attorneys, and their client corporations should be doing the same.  And several GCs said corporations were already outsourcing document review directly to e-discovery companies and not through agencies and that more contract attorneys are being used. 

And there was discussion about “apprenticeship”.   A question was posed to the panel: since CitiGroup only hires attorneys with 5 or more years of experience and many firms have cut hiring 1Ls by half or more, how do new attorneys get the experience?  Although the panel did not expressly answer this question, an apprenticeship program was suggested, in which the outside counsel and corporate counsel share the burden of training new attorneys, which ultimately benefits both groups.  One panelist suggested “career associates” as an employment model option, which is something Orrick started earlier this year.

One comment from a general counsel in the audience suggested that the pace of technology has helped reduce costs and improve service to the corporations, that it needs be brought in-house.  After several BigLaw representatives touted their use of email and videoconferencing to reduce costs, the GC audience said “no, not that” and turned to the bigger element of cost savings:  technology in litigation.   Clearly, said the GCs, there is much more technology that can be brought to bear here but either the partners did not understand the question or did not want to promote the inherent efficiency capabilities that e-discovery technologies can produce.   It was admitted:  the advanced processing programs of today can cull and filter huge amounts of data, i.e. terabytes, down to manageable sizes, i.e. gigabytes, resulting in tremendous time and cost savings for all parties.  And it is probably best that corporations manage that directly.

Other topics included alternative fee arrangements, fixed fees, use of junior associates and new guidelines for staffing of legal activities; higher expectations for results and delivery of services; improved communication; consolidation of vendors; and other issues. 

Everyone spoke about how the “top-heavy partnership model of BigLaw will change in the near future” and if we heard “unsustainable” once we heard in 100 times.   Interestingly enough, the CitiGroup representative stated that fully 30% of their legal fees are alternative fee arrangements (25% of which are fixed fee and 5% of which are contingency), while the BigLaw representatives stated that alternative fees ranged from 5% to 20%.  All panelists stated that fees are trending toward fixed fee arrangements. 

One of the concluding comments was that attorneys need to be more aggressive in settling cases and pushing for arbitration and not simply “milk discovery” for 3 years, only to settle right before trial.