Should You Bring Litigation In-House?

Should You Bring Litigation In-House?
Blake Guy
Legal Times
May 5, 2006


At first, the term "in-house litigation" seems rife with contradiction. The legal departments of most companies simply are not set up to handle litigation without significant help from outside counsel.

Of course, companies should consider a number of factors -- company size, the nature and scope of the current litigation docket, available budget -- before they decide whether some or all of their litigation will be handled in-house.

At BearingPoint we have developed an approach that breaks with the traditional role of an in-house litigation team. Drawing upon my experiences since joining the BearingPoint litigation team, in December 2003, I can offer a sort of preliminary guide for companies that may be considering bringing some portion of their litigation docket in-house. It is as much a reflection on lessons learned as it is a set of practical recommendations to be considered before companies make such a move.

SELECTING A MODEL

The work of an in-house litigation team can cover a number of different areas. Generally, however, the litigation model for most companies will fall into one of three categories: management of outside counsel, handling all litigation in-house or a combination of the first two (a "hybrid" model).

The first step in deciding whether to move all or part of a company's litigation in-house is to define which model will be used. At BearingPoint we use what I would call a hybrid litigation model. For example, the majority of single-plaintiff employment disputes are handled in-house with minimal or no assistance from outside counsel.

Similarly, commercial disputes that fall below a flexible threshold in terms of scope and potential liability are handled in-house. But in cases that are clearly beyond the available resources or expertise of the litigation team, we turn to outside counsel, and one of the company's litigators will manage, direct and assist with their approach.

Defining which model will be used helps to establish expectations, set objectives and attract the right talent. Whatever the model, the company must commit to it (in other words, invest in the model) and identify what it expects in return for its investment. Once the model has been determined, the next step is to consider what resources will be available to the team.

RESOURCES

How will the litigation team be staffed? Of course, the quality of an in-house litigation team will be heavily influenced by compensation. In order to attract litigators who will produce results comparable to those obtained by outside counsel, compensation packages need to be established that, although below market rates for private law firms, are sufficiently generous to lure senior associates away from the comfort and stability of private practice.

Though they are increasingly more difficult to find, the focus should be on locating and recruiting attorneys who have tried cases and negotiated settlements in cases otherwise destined for trial. Rather than concentrating on attorneys who have toiled for years in the litigation departments of large law firms with little or no practical trial experience, try to staff the in-house litigation team with trial attorneys who have had meaningful trial and negotiation experience.

Trial attorneys will generally have a better feel for how the facts, as well as a company's explanation of those facts, will play out in a courtroom. Consequently, an experienced trial attorney will better serve the company's need to quickly assess and reassess the advantages and disadvantages of taking a case to trial.

In addition, it's important to invest in high-quality paralegals and administrative support. In order to properly staff a case, even a case that can be handled by a single in-house attorney, paralegal support is essential. In fact, the higher the quality of the paralegal staff, the more likely it is the in-house litigator can take on additional litigation matters without a decline in the manner in which he handles each case. In a department where in-house litigators are truly expected to serve as lead counsel on their cases, there should be one paralegal for every two, or maybe three, in-house litigators.

Of course, technology can play a huge role in allowing in-house litigators to manage their docket without the vast (and expensive) resources available at most law firms. In particular, there are two technology resources that I believe are non-negotiable essentials. First, the company must invest in commercially available software that can be used to collect, store, preserve, organize, search and produce documentation.

Without such an investment, the nature, size and number of cases that can be handled in-house will be vastly reduced. Second, the company must make available to its litigation team the full panoply of research and data available through Lexis or Westlaw. Without this basic but critical resource, a company forces its litigation team to compete on an uneven playing field.

USING OUTSIDE COUNSEL?

Although the motivation for handling litigation matters in-house is often related to growth in expenditures on outside counsel and other vendors, it would be foolhardy to think that outside counsel can be dispensed with altogether. In fact, outside counsel can play a number of roles for companies that elect to handle more litigation matters in-house.

First, there will always be a need to associate with local counsel in jurisdictions where the responsible in-house litigator is not licensed. In this scenario, local counsel should be viewed as a useful part of the litigation team. In fact, local counsel should be selected based on their knowledge and familiarity with the court, the judge, the opposing counsel, the opposing party and the jury pool. Furthermore, in the event of unexpected developments, local counsel will need to stay familiar with the case in order to assume first-chair responsibilities if necessary.

Second, outside counsel can be used in a second-chair capacity. Under this approach, outside counsel is not responsible for directing how a case is handled but is responsible for assisting in-house counsel in executing the specific game plan. The in-house litigator remains responsible for taking and defending depositions, preparing or responding to motions, and serving as lead counsel for negotiations or the trial.

Third, in those instances where the resources of the in-house litigation team are lacking, outside counsel can be used in an economically smart way. For example, some litigation matters involve extensive paralegal support but can otherwise be handled by a single litigation attorney. Other litigation matters involve voluminous document review and processing, but once that is complete, one attorney can do most of the rest of the work.

In instances such as these, it is helpful to establish relationships with outside counsel that will allow an in-house litigator to lean on the raw manpower that outside counsel can usually provide with very little advance notice.

Finally, no in-house litigation team, whether it uses the hybrid model or not, can reasonably expect to handle all litigation matters that come through the door. Most in-house teams will never match the resources, size and flexibility of outside counsel.

Not only will outside counsel remain necessary to handle overflow litigation, but a number of dispute categories should always go to outside counsel. These categories include "bet the company" litigation, class actions, significant intellectual property disputes, criminal matters, grand jury subpoenas, Securities and Exchange Commission issues and disputes with current or former executives.

THE BENEFITS

Handling the right litigation matters in-house can save a company money that otherwise would be spent on outside counsel. It also removes one of the common settlement leverage points often raised by opposing counsel.

For example, a company may decide it is going to handle most or all of its employment litigation in-house. Alternatively, it may decide it is going to handle in-house all commercial litigation with exposure under $1 million. In the traditional management model, these are the types of cases that can quickly start to become too small to defend.

As the fees paid to outside counsel start to approach the amount of the underlying claim, it is only natural to question whether the cost of defense is (or ever was) justified. By assigning just three or four of these cases each year to an in-house litigator, assuming that the results will be similar to what outside counsel would achieve, a company will more than offset the investment it makes in each of its litigators.

In settlement negotiations, the less exposure there is to the company, the more likely the other side will emphasize the cost (such as outside-counsel fees) that the company will still have to incur before it can get rid of the case. Handling certain litigation matters in-house can minimize or eliminate this pressure during the negotiation process, and the company can make a decision more focused on the anticipated outcome than the cost of obtaining it.

More than once, in an attempt to exploit the expense of defending against an employment lawsuit, I have been reminded by opposing counsel that, either by statute or agreement, "My client will incur no attorneys fees in this matter."

It is always nice to be in a position to reply, "That's great. Neither will mine."

Blake Guy is an associate corporate counsel with BearingPoint Inc., based in McLean, Va. BearingPoint is a global management consulting, systems integration, and managed services company.

Legal Outsourcing story in the Deccan Herald featuring LegalEase Solutions

Legal outsourcing
Currently legal work outsourced from the US is said to provide 12,000 jobs but by 2008, the sector is likely to require 29,000 lawyers, most of them in India with its tradition of English medium law education.

 
People donning the black coat need no longer sweat it out in the noisy corridors of Indian courts in summers any more. For, a lot of jobs are awaiting them in the cool, chrome glass-panelled ITES offices in Indian metropolises. As legal outsourcing is just about wriggling out of the clutches of the aggressive anti-outsourcing rabble rousers in the West, students trained in the Indian law schools can justifiably aspire to be counted among the white-collared workers with attractive pay packets. The budding sector is all poised to free several legal brains from legal sweatshops dotting the environs of the courts that do hone their legal skills but yield little by way of wages.

Demand for legal skills

Legal skills of Indians are now up for uploading. The law firms in the United States are getting increasingly aware that they could maximise their efficiency by sending the back office work to India. It would thus not only cut expenses, but possibly save on time which could thereby be utilised for actual court appearances, face-to-face negotiations or development of clientele.

Gradually, American law firms are discovering the worth of outsourcing work to firms in Mumbai, Delhi, Bangalore and Hyderabad. Leading firms like Pangea3, LegalEase and Evalueserve are employing a battery of lawyers in India. Currently legal work outsourced from the US is said to provide 12,000 jobs but by 2008, the sector is likely to require 29,000 lawyers, most of them in India with its tradition of English medium law education. Indian lawyers are seen capable of servicing for the US legal firms without any additional training as the judicial system on either end is rooted in British common law. Law firms here are found eminently suitable in handling documents pertaining to scrutiny of contracts, sale deeds, patent registration etc. Even in civil matters, lawyers can execute divorce suits, property related litigation, write business contracts, prepare pleadings etc.

Just look at the following sampling:

Roamware Inc., in San Jose, California, engaged Indian software professionals and lawyers to prepare a database of key terms in nearly 200 legal documents of the company for monitoring contract compliance. Bill was just around $ 5000 while it might have been called to shell down $ 60,000 by an US based legal/IT firm.

DirectoryM, an online marketing firm based in Cambridge, Massachusetts, uses Indian lawyers for research in litigation. David Kahan, General Counsel for the company says the cost gets reduced by about 90 per cent.

QuisLex employs 12 lawyers in Hyderabad which analysis state to state Insurance regulations. Solan Schwab, a solo practitioner, feels that by outsourcing the work, he spends merely a third of what he would spend on hiring a full-time legal attorney.

The legal outsourcing made a very small beginning in 1995 when I&A International started an office in Hyderabad merely to digitise legal documents and create search databases. Strictly speaking, it was a techno-coolie job, even less arduous than a clerk’s assignment. But now it has begun hiring lawyers to review documents stemming from lawsuits. Now major firms such as Du Pont Co. use the Indian law firms to draft patent applications. And Du Pont makes no bones about saying that, although not all firms would declare that their documents undergo scrutiny in various Indian firms, given the negative connotation the word has in the US.

It’s about saving time

But for American firms it is not saving the money alone. It also saves on time. What a law firm would require a day for review of a legal document, a Bangalore or Hyderabad firm would do all through the night and present the vendor in Chicago or New Jersey a neat file the next morning. Says Tariq Akbar, CEO of LegalEase Solutions LLC, based in Canton, Michigan: We, while offshoring two-thirds of work to Chennai or Cochin work virtually 24 hours. It enables us to take large projects. Hiring also enables to cope up with temporarily increased load of work’.

Legal outsourcing liberates them from desk work. It will thus enable even the small firms to take up large amount of actual litigational assignments. Companies like Lawyers.com and Lexadigm depend exclusively on Indian lawyers to do legal analysis. Others use them for conflict management cases and reviewing legal databases. Intellevate, which has offices in Bangalore and Noida receive invention description. The employees here research if the invention can be patented by going into databases of proprietary rights. Law firms here scan and upload a document on an intranet site which is downloaded in India. Patent application investigation services carry a premium. Indian lawyers can comb through American patent databases to find evidences and documents.

Be it lawsuits or patent registration, confidentiality of the work and the document are key elements in the assignments. When papers are outsourced, companies risk letting out the secrets. But advocates of outsourcing dispel such apprehensions and maintain that such risks are associated with even coding, photocopying of the documents within the United States.

M A Siraj

Legal Services-The Mass-piloting Stage

Legal Services - The Mass-piloting Stage

The concept of global services delivery is high among multinational law firms. Even smaller firms are trying it out. But for the time being, everyone seems to be doing just that - trying it out

by Shyamanuja Das

Global Services

Liberal democracies are obsessed with fairness and justice. As societies evolve, the challenge to ensure justice becomes more and more complex. In a few countries, that challenge is tackled by newer legislations, and implemented by the judiciary, making the judicial system less flexible but simple. But in many others, judiciary evolves independently, drawing on opinion and historical precedents, and is only supported by legislature. While that makes the system respond to the changing needs of the society more effectively, the delivery of justice becomes far more complicated. This system, popularly called the English Common Law System, owing to its origin, is followed by many larger democracies such as the U.S.A., India and U.K.
In countries such as India, that complexity has resulted in delays in judicial processes. In fast-moving nations like the U.S.A, where delay is not an option, it has led to steep rise in cost of legal services. In 2005, of the total $250 billion spent on legal services globally, the U.S.A. alone accounted for $170 billion, according to Forrester Research.
The $170 billion U.S. legal-services industry employed 1.5 million people in 2004, according to calculations based on information available from the U.S. Bureau of Labor Statistics (BLS). Two-thirds of these jobs were in the private sector.

Getting the Numbers Right

Since almost all global-delivery initiatives are driven primarily by labor arbitrage, at least initially, and since many of these services are priced on a time-and-materials basis, quite a few legal job functions are eligible.

Of course, not all jobs can be executed offshore. The category of jobs (See Table 1) that can theoretically be offshored directly include law clerks, paralegal and legal assistants and part of the legal secretaries. Components of some other jobs — including that of researchers and lawyers — can also be done offshore, but that requires careful separation of activities.
According to Forrester, the “offshoreable” legal-services market is about 65% of the total market in revenue terms. According to the firm, the market potential for globally-delivered legal services is $111 billion, out of the total of $170 billion.

That is a theoretical number, however. In practice, a small fraction of that number has actually gone offshore. According to a recent report by ValueNotes, an India-based research firm, the current market size of legal offshoring to India — which, together with the Philippines, accounts for a major chunk of offshored legal services — is $61 million. And the total number of employees engaged in delivering the services is not more than 1,000. NASSCOM — the India’s software and services association — is even more conservative and puts the number at 600–700 workers.

A study of 20 legal services providers by Global Services suggests that the previous estimates are low — there are approximately 2,000 legal-services delivery workers.

And Getting the Definitions Right

Legal Process Outsourcing (LPO) is a vague phrase. Coined primarily by the supplier community, it includes everything from highly specialized legal work such as draft patent filings to highly repetitive, mechanical work like coding of legal documents for electronic storage.
While most larger service providers do include legal-applications coding as part of legal BPO, a significant part of that work performed by smaller companies based largely in the southern Indian cities of Chennai and Coimbatore (that combine it with other similar work in healthcare and insurance domain) never get captured in market studies due to them being at the two extremes of the offshore BPO price band. While the coding type of work fetches an average of $7–$8 and can go down to even four U.S. dollar per hour, a high-end patent research and drafting may be billed at anywhere between $80–$120 per hour, or for full-time employee-based pricing anywhere between $30,000–$90,000.

Making a Market

Many legal service providers consider their clients — the law firms — to be “extremely conservative.” The figures, though, suggest another story. The combined client base (law firms only) of all the legal-services providers that responded to our questionnaire stands close to 400. Even assuming an overlap on the higher side of 50%, that is still a large number.
For an industry that is just about three years old, that number is unusually high; more so, if you consider the small size of the industry and relatively smaller employment levels. “It just proves that law firms of all size have taken the plunge,” says the CEO of a company, which has one of the top American law firms among its clients.


Job Categories

• Number ofJobs in 2004
  Median AnnualSalary ($)
  Arbitrators, mediators, conciliators
  5,200
  54,760
  Administration law judges, adjudicators, hearing officers
  16,000
  68,930
  Court reporters
  18,000
  42,920
  Judges, magistrates and magistrate judges
  27,000
  93,070
  Law clerks
  51,000
  NA
  Paralegal and legal assistants
  224,000
  37,870(Private only)
  Lawyers
  735,000
  126,250(Corporations)
  
  
  99,580(Law firms/private)
  Law clerks
  51,000
  NA
  Title examiners, abstractors and searchers
  61,000
  NA
  Legal secretaries
  272,000
  36,270
  TOTAL
  1,460,200
  
  SOURCE: U.S. BUREAU OF LABOR STATISTICS
  
  
  
  
  
  What is being Offshored?

Drafting of legal documents



Reviewing of drafts



Preparing summaries of case histories



Preparation of trials



Legal research



Litigation support



Patent research



Drafting of contracts, agreements, briefs



Drafting Wills, immigration law



Corporate transactional services



Legal coding (Objective, subjective)



Review, proof reading



Document management



Legal transcription.

While on one end, top law firms like Milbank, Tweed, Hadley & McCloy; Baker & McKenzie; Allen & Overy; and patent firm Finnegan Henderson have offshored part of their legal and paralegal work to India, many smaller firms have followed suit. “All our clients are medium and small law firms,” says Gururaj Potnis, Head, Legal Services, Manthan Services, Bangalore.
“Despite perceived challenges such as quality, confidentiality and security, law firms have offshored primarily to take advantage of diversity in talent base, time difference and ability to scale up and down as required,” says Puneet Mohey, CEO, Lexadigm Solutions LLC, a legal-services firm headquartered in Grandville, Michigan with delivery facilities in Gurgaon, near New Delhi.

The field has momentum. “This is anything but conservative, considering the fact that the real cost pressure that has acted as the major catalyst for offshoring in most industries is still not there in legal services,” adds Manthan’s Potnis.

Most service providers who complain that their clients are conservative, however, agree that the conservatism in this industry is not because of the usual reasons — ignorance, unwillingness to change and fear of backlash that marks many other industries. It is due to extraordinary levels of concerns about security, and a stricter due diligence process about protecting clients’ data.

While some of the work is fairly high value, a large percentage of the work is still in or just beyond the pilot stage. This explains why an industry serving so many customers employs so few people and garners modest revenue. The industry is still largely in a testing or mass-piloting stage.

Legal BPO Vendors
Company, HQ(Website)

Service Areas

Total Clients(Law firms)

Total Employees(Lawyers)

DeliveryFacilities
Atlas Legal Research, Dallas (www.atlaslegal.com)

Legal research

120 (95)

15 (14)

Bangalore, India
Brickwork Consultancy Services Bangalore, India (www.brickworkindia.com)

Litigation support and electronic discovery, legal drafting/revising of documents, legal research

6 (4)

5 (3)

Bangalore, India
eCase Solutions, Ridgewood (www.ecaseinc.com)

Litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents, legal research and patent research

10 (4)

12 (5)

Gurgaon, India
Genpact, Gurgaon, India (www.genpact.com)

Paralegal, litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents, legal research and patent research

6 (NA)

25 (10)

Gurgaon and Hyderabad, India
Integreon, New York (www.integreon.com)

Paralegal, litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents, legal research and patent research

23 (18)

105 (30)

New York and Los Angeles, Mumbai, India
Intellevate*, Minneapolis (www.intellevate.com)

Paralegal and patent research

87 (62)

127 (22)

Minneapolis, Minnesota and Noida, India
Lawwave, New York City (www.lawwave.com)

Paralegal, litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents, legal research and patent research

10 (6)

25 (10)

New York and Chennai, India
LegalEase Solutions, Detroit (www.lgles.com)

—

33 (30)

14 (12)

Detroit and Cochin, India
Lexadigm Solutions, Grandville (www.lexadigm.com)

Litigation support and electronic discovery, corporate legal function, legal drafting/revising legal function, legal drafting/revising of documents, legal research and patent research

250 (200)

20 (15)

Gurgaon, India, Grandville, Philadelphia, Columbus
Lexwerx*, London (www.lexwerx.com)

Paralegal, litigation support and electronic discovery, corporate legal function and legal drafting

1 (1)

2 (2)

—
Manthan Services, Bangalore, India (www.manthanservices.com)

Paralegal, litigation support and electronic discovery, legal drafting/revising of documents, legal research and patent research

22 (18)

120 (80)

Bangalore, India
Mindcrest, Chicago (www.mindcrest.com)

Litigation support and electronic discovery, corporate legal function, legal drafting

15 (4)

45 (43)

—
OfficeTiger, New York (www.officetiger.com)

Paralegal, legal transaction support services, legal drafting/revising of documents, legal research and patent research

9 (5)

550 (60)

Chennai, India and Manila
Prolifus, New Delhi, India (www.prolifus.com)

Paralegal, litigation support and electronic discovery, legal drafting/revising of documents, legal research and patent research

12 (8)

28 (10)

New Delhi, India
Quislex, New York (www.quislex.com)

Litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents and legal research

18 (8)

35 (32)

Hyderabad, India
SPI, New York(www.spi-bpo.com)

Paralegal, litigation support and electronic discovery

105 (50)

700+ (15)

Texas, Metro Manila and Pondicherry, India
Variante Global, New York (www.varianteglobal.com)

Paralegal, litigation support and electronic discovery, corporate legal function, legal drafting/revising of documents, legal research and patent research

30+(around 20)

40 (20)

Gurgaon, India
* Captive operations

Note: Total clients include corporate legal departments

SOURCE: COMPANIES



Some Law Firms that have Offshored


Finnegan Henderson



Milbank, Tweed, Hadley & McCloy



Allen & Overy (My source)



Schwegman, Lundberg, Woessner and Kluth



Kelley Drye & Warren



Eversheds

Baker & McKenzie



Hammonds Direct



Stites & Harbison

BJ Macfaralne & Co



Bickel & Brewer.

This path of evolution is characteristic of the risk-averse legal-services industry. Most other industries have seen a few champions that have pioneered the model while others have followed. In legal services, even smaller firms, that have vague ideas about global services delivery, do not want to miss the bus. “Some customers think that these complex processes can be performed offshore with minimal investment in training and selection of staff,” says Liam Brown, CEO, Integreon, NY, one of the biggest offshore legal-services firms with delivery facilities at Mumbai, India. “There are others who are too conservative with an it-can-never-be-done-in-India attitude. You try to find customers somewhere in the middle, who are open to leveraging India and who also take the time to really understand what can be done, how quickly and what investment needs to be made in process mapping, selecting the right staff and training to get there.”

Some law firms have understood these realities a lot better than others. The small and nascent legal-services market has its own captives. In fact, Dallas, Texas-based Bickel & Brewer, that is widely acknowledged to have pioneered the India-offshoring model way back in 1995, had started as a captive. Since then, it has spun off that subsidiary to an independent company called Imaging & Abstract International, based in Hyderabad, India. Others who have followed this model include London-based BJ Macfarlane & Co, which has a subsidiary called Lexwerx Ltd. in New Delhi; and Schwegman, Lundberg, Woessner and Kluth, PA, a Minneapolis, Minnesota-based patent firm that has a subsidiary called Intellevate in Noida near New Delhi. Today, Intellevate is clearly the leader among offshore-services firms providing patent research. This model has its own challenges. Most law firms, unlike other companies in different industries, still do not know how to do business in India, as foreign law firms are not allowed to operate directly in India. “The challenges of starting and operating a business in India can be a challenge,” says Steve Schley, VP, Sales and Marketing, Intellevate.

While all the vendors serve both law firms as well as corporations, law firms clearly lead, both in terms of actual work offshored and mindshare, though there are companies like Genpact, the erstwhile GE subsidiary, that does work on behalf of corporate legal clients. Many technology companies like Microsoft and Cisco work with Indian firms to do patent research — so do some pharma companies.

Half-filled or Half-empty?

With merely 1,000–2,000 workers and modest revenues between $60–$70 million, is legal-services offshoring a classic case of much ado about nothing? Or is it that with 200 odd law firms trying it out, offshoring could change the way the domestic legal-services industry operates forever?

Unlike many other industries — like technology— legal services is still way behind what the analysts like to call the “threshold.” Offshoring in legal services is astonishingly widespread; but it is not even knee-deep.

Legal Outsourcing firm comes to Livonia, Michigan

Legal outsourcing firm comes to LivoniaBY DAN WEST STAFF WRITER

A new Livonia company is using resources in India and the United States to help lawyers write briefs and conduct legal research.

LegalEase Solutions is an attorney-support enterprise that enables lawyers to outsource time-consuming tasks. Partners Tariq Hafeez, an attorney, and Tariq Akbar, with an engineering and business background, hope their business will flourish with the forecasted growth of such legal services.

"We're not competition for attorneys, we're a support system for attorneys and work only for them," said Hafeez, who once worked for Michigan Attorney General Mike Cox.

"I know outsourcing is a bad word to some, especially here in Michigan, but legal outsourcing is different," Hafeez, 28, added. "We're helping attorneys in this country do more, increase their client capacity and increase their business."

The one-year-old company relocated from their homes in Canton to a Livonia office three months ago in the Five Mile-Farmington area.

The duo, who have been friends for 15 years and both have family in India, coordinate a team of seven full-time, India-based attorneys and six contracted U.S.-based attorneys for the outsourced legal tasks. With their staffs on opposite ends of the planet, this enables LegalEase Solutions to staff a 24-hour work force. So far, the company has handled tasks for 33 clients in 12 states.

The company's primary services include legal research and writing, pre-litigation support, preparation of trial and appellate-level pleadings and briefs, documentary review, discovery and patent services.

"We have bright attorneys who offer convenience and quality," Akbar, 30, said. "We can hit the ground running, with little direction, and turnaround these tasks in a short period of time and save our clients hundreds of hours of work."

So far, LegalEase Solutions primarily works with small law offices. The company's contract work enables these firms to save on the expense of hiring a full-time associate.

"We just help them out as they need us," Hafeez said. "They only have to pay for services as they need them."

The duo hopes to grow their business by networking at attorney conferences across the country, contacts via their Web site (www.lgles.com) and by advertising in legal publications.
They also lean on their clients to promote them through word of mouth.

"We have to nurture these relationships to grow," Akbar said. "Building that trust with our clients will help us do that."

Deposition Summaries: LegalEase meets an almost impossible deadline

LegalEase was recently asked to summarize over 4500 pages of deposition summaries relating to an upcoming trial in a matter of 3 days. The case, involving a breach of contract between an automotive supplier and a solvent company, included depositions of over 30 witnesses.

LegalEase quickly assembled a 24-hour workforce to complete the summarization project within the client’s time frame. The deposition summaries were delivered to the client on time, and the client realized a cost savings of over $10,000.

Do you have an E-Discovery and Document Review Plan?

Do you have an E-Discovery and Document Review plan? Let LegalEase help formulate and implement a customized E-discovery plan for you.

The combination of using offshore discovery attorneys and the ability to work around the clock, gives LegalEase the advantage at delivering high quality review services in a fraction of the time and at a much lower cost than standard review methods.

Today companies are faced with a new world of discoverable information – email messages, word processing documents, portable devices, spreadsheets, and a multitude of other types of electronic data and media. 10 years ago, the practice of electronic discovery was uncommon. Nowadays, electronic discovery takes place in all forms of litigation and business matters.

LegalEase specializes in electronic and paper discovery, assisting attorneys and businesses with the collection, organization and preparation of data for review and analysis in legal matters, regulatory filings, and government investigations. LegalEase leverages the most powerful document suppression software with the cost-savings of outsourced professional document review. The result is an accurate, lean and efficient review of electronic information.

LegalEase delivers efficient and cost-effective electronic review, production and litigation support without the expensive overhead of large law firms. Our business model is focused on providing an efficient and dependable service to the client using cutting-edge technology, well trained staff and the proven benefit of a joint onshore/offshore discovery attorney team.

With the joint team, we are able to have experienced discovery attorneys working in India and the U.S. The joint team gives clients a 24 hour work force to meet even the toughest deadlines. Moreover the combination of using offshore discovery attorneys and the ability to work around the clock, gives LegalEase the advantage at delivering high quality review services in a fraction of the time and at a much lower cost than standard review methods.

Charging $183,000 For Online Legal Research?

I realize that when bankruptcy lawyers charge hundred of millions of dollars for handling bankruptcy cases that a measly $183,000 is a drop in the bucket. Nevertheless, I was shocked to read in this article, Legal Fees Pile Up for Delta, Northwest, that in the Northwest bankruptcy proceeding, one law firm billed more than $183,000 for online research.
How do you justify that kind of charge? For starters, by now, most firms can purchase top of the line, full service LEXIS or Westlaw, which allows for unlimited searches, for several hundred dollars a month. Let's just assume for the sake of argument that the firm in question pays $1000 per month for LEXIS or Westlaw for each attorney in the firm. At $183,000, that's 183 months worth of service. Even assuming that twenty attorneys are working the case, that would mean that each is working on the bankruptcy matter for nine full months (I assume that if they are working on other matters, the cost would be pro-rated). So that's my first point: I just don't understand how a firm could pay so much for online service.
Second, and more to the point, the cost of online service ought to be rolled into a firm's overhead. Firms never billed clients to retain libraries and online research service has in most cases effectively replaced law firm libraries. Moreover, online research is now priced at flat fees, rather than per search, which makes it more amenable to inclusion in overhead rather than pro rated.
What's sad is that the sophisticated clients that hire these firms don't even know that they're being overcharged. And that's why these types of fees will continue: because until clients put pressure on law firms to charge less, the firms have no incentive to do so.

"What Differentiates Our Firm Is..." [Nothing]

A very interesting article about how marketing works in the legal industry from Adam Smith Esq's blog - http://www.adamsmithesq.com/blog

A reader (partner in an AmLaw 10 firm) writes:
"Most businesses know their leading indicators of sales. For example, if the company increases the number of sales calls in January, there will be more sales in April. "Has anyone analyzed empirically what the leading indicators of sales are for AmLaw 200 law firms? Do the indicators include ads in the trade press? Fancy dinners with potential clients? Rounds of golf with potential clients? Publishing articles in legal or trade journals? Giving speeches? Winning jury trials? Closing big deals? "It strikes me that law firms have very little idea of what business development activities they really want to encourage among their lawyers and so take a scattershot approach to the effort. "Has anyone thought intelligently about this?"
This is a fascinating question. So, after a relative drought of pieces on law firm marketing, we have our second in one week.
My immediate response is: Most firms are probably clueless about this. (And if someone out there really is doing empirically-driven marketing, please raise your hand; I would be delighted to give you the recognition you deserve [unless you would deem it be revealing a competitive advantage, in which case we can talk not-for-attribution].)
All the activities the reader cites contribute to "name recognition" for a law firm, but the actual "sale" (read: engagements to handle a piece of litigation, a corporate transaction, a tax problem, etc.) only occurs when the client has the precise need, i.e., is at the point of pain. No one in the history of the world ever woke up and said, "What I need today is to buy myself a really good contract...."
The marketing of all sorts of other goods and services can often generate induced demand, simply by providing information about the features and benefits of a product. For example, a really good campaign could get me thinking about moving up to a Nikon digital SLR when my film Nikon still has many miles left on it, but you would never achieve anything remotely similar with a law firm's campaign.
To be sure, it's possible (although I would wager very uncommon) for a corporate lawyer to generate demand for, say, a review of corporate governance structures and policies at a client; but in general matrimonial lawyers don't generate divorces, white-collar crime lawyers don't generate securities fraud, and tax lawyers don't generate IRS audits. In this sense, then, all the marketing in the world can't generate a "sale" for a law firm. First, the client has to have the need.
But, as the marketers in the audience are starting to protest, can't the right marketing campaign achieve the holy grail of "differentiation?"
I'm here to tell you I think not.
Let me step back: Your firm can be "differentiated" in clients' eyes—and remember it's only the eyes of the clients that matter, not those of you and your partners—only if it stands for one consistent value, commonly thought of or referred to as its "brand." [ Note: Do not confuse "name recognition" for a "brand"—Martha Stewart has had very high name recognition for quite some time, but the value of the Martha Stewart brand has swung from the heights to the abyss and now maybe back.]
A "brand," in turn, is simply a promise: A promise of consistency, of a certain set of nearly immutable qualities that remains the same each time you come back. So every can of Coke is alike, every tube of Crest satisfies whatever it is in you that you like about Crest, and every BMW occupies the high-performance rung in its vehicle class.
But even though one of the most recognizable names in law-firm land is Skadden, every client interaction with a Skadden lawyer (or Clifford Chance, or Jacoby & Myers, for that matter) is different from every other client interaction with other Skadden lawyers, or that same Skadden lawyer on a different matter or a different day of the week.
In other words, law firms, even the mighty Skadden, cannot "promise" consistency. Thus they can't really have a brand that stands for anything in particular, and so they can't be meaningfully differentiated from their competitive set.
Understand what I'm not saying: I'm not saying that firms can't have reputations for being particularly expert in specific areas. Weil-Gotshal may be the go-to firm for big-ticket bankruptcies, Schulte-Roth for private equity, Sullivan & Cromwell for commercial bank regulation, etc.
That still doesn't mean the aura of those practice groups rubs off on completely unrelated practice groups within those exact same firms. In other words, if you're Fidelity or Vanguard and will never have anything to do with private equity, does anything still make Schulte-Roth distinctive to you? I think not.
But looking at these examples reveals something else: What clients want when they're in the market for a law firm is the capability that speaks most directly to their legal need du jour.
The only reason the articles, golf outings, fancy dinners, speaking engagements, etc., have any value is because they all amount to opportunities to show the client (you can't tell them—that's an exercise in futility if not self-inflicted humiliation) that you understand their business and the legal environment in which they function. In other words, they are efforts to demonstrate that what you offer could be, at the right time and place, germane to the client's legal needs.
The trenchant and always-reliable Bruce Marcus has written about this, more than once. The heart of the matter is this:
"The truth is, you probably can’t specifically articulate what you think you know to be better about you or your firm, because without tangible evidence, there’s no way to be credible. You can’t say, “We do better briefs and write better contracts,” or “We do better audits,” or “We’re better litigators.” "You can’t say these things because they’re outrageous and self-serving statements. Because you can’t prove it, in most cases. Because the Canons of Ethics won’t let you. And for most clients, because the real difference between one professional and another is not what you think it is – it’s what the client thinks it is."
Essentially, the goal of all the marketing tools we started with—the articles, the golf games and dinners, the speeches—is to create opportunities, through action not assertion, to demonstrate to the client that your firm stands ready to be truly useful when legal needs arise.
Marketing, in other words, gets you a seat at the consideration table. But you and your partners still have to "close the sale" in person.
And there won't be any "differentiation" or "branding" pixie dust in the room with you.Posted by Bruce at March 9, 2006 12:25 PM TrackBack

Law is the latest in outsourcing to India

LegalEase featured in the Asian Age and Deccan Chronicle
With the world getting flatter, legal eagles in India, especially here, are fighting cases for US lawyers though not side by side. Legal outsourcing to India might have gained a foothold in the US legal system. Attorneys in Grand Forks and other companies now turn to lawyers in Bangalore, Delhi, and Chennai for help in drafting legal briefs and research work for cases to be fought in American courts.
Larry Newman, author of Texas Corporation Law and corporate transaction specialist, is similarly impressed by the quality of work done by Indian lawyers. He cites them as being instrumental to getting favourable results in even the most complex of cases. He is partial to legal outsourcing from India for the cost efficiency, fast response, and good work quality — all of which explain why the practice is fast catching up. Similarly, Tariq Akbar and Tariq Hafeez, partners of LegalEase Solutions in Michigan, US, discussed the impact of outsourcing and identified the potential of combining Mr Hafeez’s legal and Mr Akbar’s offshoring experience. They hire and retain both American and Indian lawyers to provide actual legal work to American law firms and corporate legal departments.
About a year ago, West — the best-known name in legal publishing in the US — began publicly ruminating about joining the stampede to India. For the past few months, West has been running a pilot programme in Mumbai, in which several Indian lawyers are preparing summaries of unpublished US court decisions.
General Electric (Research), America’s fifth-largest corporation, has taken the idea the farthest and set up a subsidiary in India that employs about 30 lawyers. In-house law departments of some multinational firms — DuPont, General Electric, United Technologies, Bayer, Microsoft, Cisco, Oracle and Sun — are here.
India has a huge potential in legal outsourcing, with the number of jobs in the field increasing to 79,000 by 2015, a study by Forrester has said. Though India had earned over $6.7 billion in US-based outsourcing services, such as software and call centres, till March 2005, the field of legal outsourcing was largely untapped.
The study estimated that jobs in the field — which was poised to increase dramatically from about $80 million annually to approximately $4 billion — would grow to 29,000 in 2008, 35,000 by 2010, and 79,000 by 2015.
Indian outsourcing offers the following economic advantages: a significant wage differential with Indian firms report paying legal researchers around $12,000 per year and also savings in perks, overhead, and working conditions, the study said, adding time zone differences allowed for overnight and 24x7 operations.
Says Mr Akbar, chief executive officer of LegalEase Solutions, "Our offshore attorneys in India are among the brightest in the legal community and are willing to direct their talents and energy towards providing some world class products. They have been extensively trained on US law and online tools like Lexis Nexis."
"This is because Indian lawyers are positioned to assist the US legal market," claimed Rocky Dhir, whose Atlas Legal Research has lawyers in Bangalore. "There is no difference between Indian and American advocates. The quality of work is the same," said attorney at law Jay Ethington, specialising in criminal defence.
A former assistant United States attorney, Mr Ethington said he had tried Indian advocates to do research and complete the paperwork for about half-a-dozen cases. "Results have been very good all the time," he said.
Indian advocates do not fight the case directly in US courts. Sitting thousands of miles away, they do the research work, analyse the case and draft the legal brief for advocates, who fight the case in US courts. This saves a lot of time and energy, besides money, for American attorneys.
The advantage is, Mr Dhir said, "India, like the US, has a common law jurisdiction." The fact that the entire legal system, from studies to debate to court orders, is conducted in English is also an advantage. Also, the time difference between India and the US is appropriate.
"While our legal research associates are busy preparing the case, US lawyers sleep. As such our company works 24 hours," Mr Dhir said. It would also be an added advantage for a large number of Indian companies, too, like Infosys, Tata and Wipro, who have business in the US, to access this legal facility. With the help of lawyers from India, these companies can very well compete with their rivals in courts here and that too at a fractional cost.
This proves that offshoring is benefiting both sides and Americans are opening up after much dissent. Agrees, Mr Akbar, "The practice of law requires court time, client development meetings and a certain amount of personal research and writing. You cannot replace an American attorney. We help American lawyers tap the intellectual capital of the world to meet the demands of the legal market through outsourcing. There are small law firms who could definitely use the affordable legal support and there are large ongoing expensive litigation cases (case in point Enron) which continue to consume millions of dollars which can be made a lot more cost effective."
So far, the legal services work consisted of paralegal, secretarial and litigation support. However, according to financial consulting firm Fulcrum Financial Inquiry, Indian firms now offered more valuable services, including contract review and monitoring, document review for due diligence, patent drafting, simple filings and legal research.
According to a report published last year by the University of California at Berkeley, paralegals and legal assistants based in India earn on an average between $6 and $8 an hour, compared with the nearly $18 an hour their counterparts in the US make. "But it is more than what a lawyer in India would make. I took up working for an outsourcing firm because the money is definitely double," says Ms Nadini Pai, a lawyer in an outsourcing firm in the city.
Will this boom in India too fizz out like the dotcom boom did? "The boom will have to level out as with everything else. There is a demand supply logic which commands the world economy. Once the demand and supply levels off, the boom will subside but the need will continue. BPO is not an industry per se but a concept which will cease to be an attention grabber but more of the norm of things to come as the world continues to get flatter," says Mr Akbar.
- By Raziqueh Hussain

The outsourcing wave hits investment bankers

Watch out--the outsourcing bug has bit the financial industry, namely the behemoths of the likes of JP Morgan Chase, Citigroup and Morgan Stanley. Not only are back office functions being outsourced to India, but more and more, high-end analytical research and overseeing foreign-exchange trades and complicated credit derivatives contracts.

The outsourcing wave hits investment bankers

It's not just IT support anymore. Banks increasingly are taking their research analysis operations abroad -- and deal-making may be next.
By Shaheen Pasha, CNNMoney.com staff writer

February 22, 2006: 9:45 AM EST

NEW YORK (CNNMoney.com) - First came IT outsourcing. Now comes investment banking.
After years of outsourcing technology support and other back-office operations to countries like India and China, financial institutions are increasingly looking to move large portions of their investment banking operations abroad, according to a recent report by Deloitte Touche Tohmatsu.

Faced with a dearth of skilled workers and shrinking profit margins, banks that want to remain competitive in the global marketplace can't afford to miss out on high-quality -- and cheaper -- foreign talent, the report said.

As a result, what began as technology support is now morphing into more analytic operations.
"Most of the large financial institutions were in the IT side of outsourcing but as they leveraged that experience, they got more interested" in moving more of their investment banking and research activities abroad, said Niket Patankar, chief executive of outsourcing firm Adventity Inc.

Among the leaders in outsourcing and offshoring are the big investment banks: Citigroup (Research), Morgan Stanley (Research), Lehman Brothers (Research) and JPMorgan Chase (Research). Typically, those banks have moved their research analysis operations offshore in order to take advantage of the time difference between the U.S. and Asia as well as the cheaper labor.

"Investment banking has a lot of number crunching that to a large degree can be done anywhere," said Alenka Grealish, manager of the banking group at Celent LLC. "By taking press releases and data feeds and digesting them offshore, the components can be made into basic analyst reports" that are available to clients early in the morning.

Going one step further JPMorgan Chase, however, is taking its investment banking activities abroad a step further. The company was one of the first investment banks to not only transfer the company's back-office and call-center operations but to also hire research analysts in India, Hong Kong and Singapore to complement its U.S.-based research team. After piloting the program in 2003 with about 1,200 employees in India, the company announced late last year that it plans to have a total of 9,000 employees in India by the end of 2007, with one-third of those employees working for the company's investment banking unit. Not only will the Indian workers handle research and analysis for the bank but will also be responsible for its foreign exchange trades and its highly complicated credit derivatives contracts.

Some experts expect that as banks become more comfortable with their offshore operations and foreign talent becomes more attuned to the companies' way of doing business, financial institutions may even shift some deal-making responsibility onto its foreign employees.
The Deloitte Touche Tohmatsu report indicated that offshore operations give financial services companies a foothold in new and emerging markets such as China, where there are more revenue opportunites than mature markets like the U.S. The report also predicts that driven by the need to take aggressive cost-cutting measures, the financial services industry will move 20 percent of its total costs base offshore by the end of 2010, compared to the current average of 3.5 percent.

Although no numbers are yet available, Peter Lowes, principle and head of outsourcing advisory services at Deloitte Consulting LLP, said in a few years, banks may increasingly rely on offshore talent to conduct due diligence and to screen prospective clients for investment banking business.

And while there is no single, authoritative source on the specific number of U.S. investment banking jobs that could be lost to offshoring, Forrester Research predicts that within 10 years, at least 3.3 million U.S. jobs across industries will be shipped to lower-cost and developing countries such India, China and the Phillipines.

A competitive necessity

"I believe the industry has reached such a level of globalization that it matters less and less where the actual (research) is generated and matters more what the cost of generating those products are" said Richard Bove, analyst at Punk Ziegel & Co. "Banks can't afford not to do (outsourcing) anymore."

It takes about three years for banks to see full benefits from an offshoring program, said Deloitte's Lowes, as companies overcome the initial learning curve of doing business abroad and gradually build their scale. Firms that aggressively expand their scope and scale will deliver much higher returns on the foreign investments than those that simply dabble in the practice, he said. Top performers can see cost savings of up to 60 percent while bottom performers report savings of less than 20 percent, Lowes said.

Lowes added that those companies that reinvest some of their cost savings towards continuing to expand their operations offshore are going to be the true long-term winners.
"The economics (of offshoring in banking) are strong and the risks are being successfully mitigated" he said. "Today it's a competitive necessity."

Litigation Budgeting Helps In-House Counsel Control Costs

Having spoken to a number of general counsel over the past few months, its easily apparrent that litigation costs are among the top concerns of in-house counsel. Not only the sheer cost of litigation, but also the unpredictability of costs is unsettling at best for general counsel. We did speak to a few general counsel who have actively kept their outside counsel on a budget. One in-house lawyer, a director of litigation for a Fortune 100 company, explained that he bid out legal work to law firms, and awarded the work to the firm with the best value. Moreover, he kept his outside counsel on budget.

This practice of budgeting litigation is certainly the way to go for general counsel. While you may never be comfortable with the high cost of litigation, with legal budgeting, you need not lose sleep over the final bill.

Litigation Budgeting: No Crystal Ball RequiredDavid J. LevyThe Corporate CounselorFebruary 15, 2006

Litigation may be simply one of the costs of doing business, but it's no secret that the difficulty in predicting those costs adds to the frustration in corporate legal departments. Concerns about costs and how to control or predict them weave their way throughout a survey of corporate litigation trends commissioned for the second consecutive year by Fulbright & Jaworski, and conducted by an independent research firm. (The 2005 survey was comprised of written responses from 354 in-house attorneys, including 50 in the United Kingdom. Most of the respondents held the title of General Counsel, Legal Director or a similar senior-level position in their respective legal departments.) This article discusses one of the most effective, yet surprisingly underutilized tools for managing litigation costs: the litigation budget from outside counsel.

A RECURRENT THEME: COSTS, COSTS, COSTS

Even when not directly addressed in the survey questions, the survey participants often injected the subject of litigation costs into their answers. For example, when asked for specific examples of their top litigation concerns, nearly one in five mentioned the costs of litigation as one of their top concerns rather than any specific type of litigation. In fact, costs were among the top two concerns mentioned across all eight industries that were represented in the survey. And litigation costs ate up the biggest chunk of the total corporate legal budget in the manufacturing, energy and insurance industries.

It is not surprising, then, that "cost efficiency" was ranked second only to "results" among the criteria used in measuring the success of legal departments, as well as that of individual attorneys in the department. Survey participants also expected more litigation and rising costs in the future. Participants, therefore, want future surveys to continue to inquire about ways that corporate legal departments are trying to manage and reduce litigation costs.
In fact, when asked for the one message they would like to deliver to their outside counsel, the most frequent answer involved "controlling costs." The verbatim answers ranged from the metaphorical ("Sharpen your pencil"), to the direct ("Cut your fees"), to the diplomatic ("Be very careful in your billing practices and keep legal fees as reasonable as possible"). Others emphasized the need to be updated regularly on costs ("Keep me informed of your day-to-day activities so that I am better able to estimate costs" and "Communicate with us, let us know how we are doing"). And when asked what one phrase they most hate hearing from their law firm, the answer often centered on cost surprises ("Sorry, we have gone over budget," "It cost more than we expected") and uncertainty ("Can't estimate the costs").
However phrased, the answer across industries, geographic regions and size of companies was clear: Litigation costs -- and especially the unpleasant surprises from them are an ongoing source of tension between clients and outside counsel.

E-DISCOVERY COSTS AND LIABILITIES

Adding to the dilemma of cost control is the fact that a growing component of litigation costs — and one that needs careful consideration in budgeting -- is electronic discovery. To be sure, the initial estimates from outside firms for document collection and management process may often sound reasonable (e.g., $2000 per gigabyte, or $200 per hour). But in a complex matter, that bill may quickly soar to six figures, or even seven, especially after adding per-page charges for putting documents into a database, converting them to appropriate file formats, producing them and other related charges. Indeed, in large cases, seven-figure e-discovery costs are not uncommon -- especially if the costs are not properly managed.

Thus, particularly in class actions, multi-district litigations, patent litigation cases and other complicated, document-intensive cases, clients need to closely examine their outside law firms' capabilities and experience in creating and managing the electronic discovery process. This includes the ability to most efficiently and effectively use document repositories and otherwise handle document production. If they do not have sufficient experience, they may not achieve the cost control or predictability that clients want.

Companies can also have a hand in reducing their e-discovery costs. Those corporations that have established an internal procedure for locating, organizing and producing documents without the need for outside help can save substantial amounts of money. This may be beyond the bandwidth of smaller legal departments, but it can be an important cost saver for companies with the legal infrastructure to do it.

However, even small companies can save money by taking a proactive approach in their normal business operations with written record retention policies and litigation hold policies designed for today's electronic data world. Hanging over the process of e-discovery, of course, is the threat of spoliation (intentional destruction of, or failure to preserve, evidence for pending or reasonably foreseeable litigation). Spoliation can have a major impact on the outcome of a case, since one of the possible sanctions is an instruction from the judge to infer that the "destroyed" documents in question would have been adverse to the party's case. Other sanctions, ranging from monetary fines to striking of all pleadings can also have disastrous consequences and cause a case to turn on how it was handled, as opposed to the underlying facts and laws.
The cost of not being well prepared at all times for litigation in the management of information has been demonstrated in several high-profile cases in recent years. The notorious labor/employment case, Zubulake v. UBS Warburg LLC, resulted in a $28 million jury award and a series of rulings by the judge outlining more clearly the duty-to-preserve responsibilities and actions that both in-house and outside counsel should take to meet them. Last year's finding of document/data destruction in Coleman v. Morgan Stanley was part of the reason for the approximately $1.5 billion damages award. In both cases, and others, the failure or inability of companies to produce all of the documents subpoenaed in a timely manner contributed significantly to the negative outcome of the case.

The good news is that the survey findings showed that companies are getting the message. Three-quarters of the companies in the survey had litigation hold policies in place, and 45 percent of those had revised their policies in the past year. The same was true with written records retention policies where 82 percent of the total sample had policies and 62 percent of those companies had revised their policies in the past year. The high level of revisions probably indicates an appreciation that electronic discovery is a rapidly changing area of the law and requires close monitoring.

Litigation hold policies, however, do not help to control costs. Indeed, the Catch-22 is that the preservation of vast amounts of data for litigation is more likely to increase not only the litigation costs, but also their unpredictability.

BUDGETING: SOLUTION, NOT PROBLEM

Despite the obvious cost concerns, the Litigation Trends Survey showed that efforts to predict and manage litigation costs are sketchy, at best, in the corporate world. Surprisingly, just 37 percent of the companies in the survey require a budget from their outside law firms for all their litigation matters; and only another 11 percent require budgets more than half of the time. (Tracking time-to-resolution for litigation matters is another practice that is apparently far from universal. Although 22 percent of the sample said they always track time-to-resolution, more than half never do it.)

It is certainly true that unforeseen events occur over the course of a matter, and no one has perfect vision when looking out 12 to 24 months, or more, into the future. Still, experienced litigators -- and in-house attorneys -- can draw on their collective experiences in projecting what tasks will need to be performed and estimating how many attorney hours will be required for each task, what the expenses for each task will be, and how long each "phase" of the case will last — if only they would take the time to really focus on it. Working together, outside and in-house counsel can therefore formulate budgets and make the relevant assumptions with reasonable accuracy, as long as they are methodical in going through each stage of litigation and the steps they entail.

Counsel should be able to estimate, for example, the attorneys who will be needed, their levels (partner, senior associate, associate), and their respective rates. Counsel should also be able to estimate the approximate volume of documents that will be involved, the number of fact witnesses and expert witnesses who will need to be interviewed and deposed, the number of deposition hours required, when they will begin taking depositions, when they will file non-dispositive and/or dispositive motions, and so on throughout the duration of the matter. It is simply a matter of using past experience and methodical analysis to break the case down into its parts, then estimate the costs and relevant time period for each part.

For example, in a breach of contract case, counsel might estimate that a partner and associate will interview a key employee/fact witness for eight hours, then later prepare the witness for her deposition for six hours and then have the partner present the witness for deposition for six hours. By simply multiplying the hourly rates of the partner and associate by the number of projected hours they will spend interviewing, then preparing, then presenting the witness -- counsel can calculate the budget for this aspect of the case.

SIMPLE TOOLS HELP

Regardless of all the various software products being marketed for litigation budgeting, they are only as good as the information that is input into them. Simple Excel spreadsheets that break a budget down into key tasks and phases of a case work perfectly well. For example, using the ABA task codes can be an excellent way of focusing on all the steps in the litigation process. And by using the formulas in Excel, counsel can easily modify the budget by adjusting one or move variables (e.g., attorney's hourly rate, or estimate time spent on a task), which will then adjust the other variables and figures, as necessary.

Some budgeting tools incorporate deadlines and the ability to look at previous work in analyzing costs and budgeting future items. Of course, people will inevitably record some functions differently, which may put certain tasks over-budget and others under; and the inherent unpredictability of litigation can always cause events to be delayed, pushed up, short-circuited or extended. But just because budgets are not perfect, that is no reason not to use them. If nothing else, they force counsel to think hard about the time and resources committed to a case.
Indeed, it's very much like doing a family budget. When expenses approach budget limits, it's time for lower-cost alternatives, such as sending an associate -- instead of a partner -- to a meeting or deposition (when appropriate). Time-and-expense tracking and promptly notifying the client when costs begin to bump up against the budget is the way to reduce those unpleasant surprises that can harm counsel-client relationships.

Any relationship, however, is a two-way street, making it important for in-house and outside counsel to agree on their expectations of what constitutes a "fair" budget. Will the budget become a de facto, maximum-fee arrangement? What happens if outside counsel is too far under or over budget? How will that be handled internally, and how will it be handled with outside counsel? No one can predict the future with complete accuracy, but they can establish guidelines of fairness and protocols for what to do when estimates are significantly off the mark.
Finally, a modest proposal to corporate legal departments: Offer to pay for outside counsel's time spent preparing a budget. Have that time included in the budget and offer to work with outside counsel in preparing a thorough, carefully considered budget. That will help make the point that budgeting is important to the client, as is continuous communication about any needed ad-justments to it as the matter progresses.

If both outside counsel and client approach litigation budgeting in a methodical way, drawing on their respective personal and institutional experiences, then litigation budgeting shouldn't require any clairvoyance or pain medication. And in-house attorneys responsible for their own legal department's budget will finally be able to sleep at night.

David Levy is a partner in the litigation, international, and intellectual property and technology departments at Fulbright & Jaworski. He is also the co-chair of the firm's firm's Asia Pacific Practice Group. Levy focuses his domestic and international trial practice on complex litigation matters that range from class actions to patent infringement cases.

Legal Outsourcing Taps into 'intellectual capital'

LegalEase Solutions featured in the front pages of the Detroit Legal News

B CHRISTINE L. MOBLEY Legal News Legal outsourcing has been profiled as an easy way for attorneys, law firms, and even large Fortune 500 companies to save not only money but time as well. Michigan is home to three fledgling legal outsourcing firms. Among these outsourcing service providers is LegalEase Solutions L.L.C. According to Tariq Akbar, CEO of LegalEase Solutions L.L.C., the company began in 2004 and has three offices worldwide: one in Canton, Mich. and two others in Cochin and Chennai, India. One advantage to legal outsourcing would be that projects could be done in a more time efficient manner. “With a company like ours — where we do a third of the work here in the United States, and the rest of it is done offshore — you virtually have a 24-hour workforce,” Tariq Hafeez, LegalEase Solutions L.L.C. president and general counsel, said. “Basically, around 10 p.m. here, in Michigan, is 8 o’clock in the morning in India, so we can have our attorneys working here until 5 or 6 p.m. in Michigan and then after a four hour gap, the work is picked up again in India. So we can get large projects done, or even short projects done; at a much shorter time than it would take otherwise.” According to the LegalEase Solutions Web site, once a client has contacted LegalEase Solutions and their information is collected, the information is transferred over to lawyers in India, the project is then researched and prepared and reviewed, and then given back to the client for their review and use of the product. The India-based attorneys have access to Lexis Nexis and other online research tools in order to complete projects from any jurisdiction, according to the site, and India-based legal professionals must have a minimum of five years experience before being hired by LegalEase Solutions.
“The people we’re working with are truly some of the smartest and brightest people we have met internationally;’ Akbar said. “These are really smart, creative, and talented people and what we’re doing is tapping into their intellectual capital. You’re actually tapping into this huge, vast resource of the rest of the world who are willing to direct their creative talents, their minds towards making the entire legal industry a little more efficient.”
“Lawyers have just begun to realize that outsourcing can benefit them just as outsourcing has benefited other industries in the United States,” Hafeez said. There may be those that are concerned or unwilling to turn to legal outsourcing for fear of displacement, however, Akbar disagrees and believes that legal outsourcing is not only a “new trend” but “it’s becoming a necessity” “So much of the law is not just sitting at a desk writing and researching — so much of it is actually active negotiation, face-to-face contact, being in court, and none of that is going to be threatened by outsourcing,” Hafeez agreed. “What we serve to do is make the process a lot more efficient:’ Akbar said. “Nearly all kinds of law firms and legal departments can use our services in some capacity,” Akbar noted. “Our main clients today are firms with a lot of litigation work who need the litigation support and corporate legal departments who are interested in cutting costs and keeping some work in-house.” “This is probably a good time for lawyers and law firms to try legal outsourcing out because a company like ours is really willing to engineer our processes around our clients. If we have a client who wants things done in a very specific way — we’ll make sure to do it that way because were new enough and we want to’ bring on. as much clientele as possible,” Hafeez said. “We don’t even invoice our clients until they are satisfied with our work, so it’s really a no risk proposition.” For more information on LegalEase Solutions L.L.C., call1-866-534-6177 or visit their Web site at wwwiegaleasesolutions.com.

Challenges of Going Solo

Young Attorneys Who Go Solo Face Hurdles but Reap Rewards
Hope Caldwell
The Legal Intelligencer02-06-2006

A new year always pushes people to make resolutions -- some vow to lose weight, find love or quit smoking. For young attorneys, starting one's own firm or business might be a goal, but for some it always remains just that: a goal

For attorneys working at firms, finding time to meet all of the requisite billable hours is the stressor that overtakes each day. However, for the solo practitioner, the stressor in their day is not limited to the billable hour but rather to a myriad of other concerns: marketing, administrative work, filing motions, arguing motions, answering the phone and paying the office bills, to name a few. The list goes on for solo practitioners trying to start their own business while providing a valuable service to their clients.

For solo practioners, more so than attorneys at firms, time management and optimizing one's use of time is paramount. Time-intensive legal research and writing and general document review is often times a crucial aspect of most solo attorneys' work load. Solos should really take a hard look at how legal outsourcing can help them manage their workload and still do a quality job for their clients.

LegalEase Solutions' client base consists of a healthy number of solo practitioners, who often times rely on LegalEase's research and writing services to get work completed on time. Moreover, as solos often don't have the luxury of having someone to ask for advice, the inexpensive use of legal outsourcing companies can help solos cope with the knowledge and experience deficit they often times inevitably have.

www.lgles.com

Legal Demographics

Last night I attended a meeting of the American Inns of the Court , The Michigan State University College of Law American Inn of Court chapter. They featured a panel which showcased the trends in legal demographics and included some highly experienced, qualified and erudite lawyers .... and Tariq Hafeez. Tariq was easily atleast 30 years younger than the next youngest member of the panel.
What made the organization so interested in Tariq Hafeez was what he was trying to do with the legal profession - outsource it! Partners from some very large firms shook their heads in disbelief as the very concept. Yet at the very same time people were able to grasp the simple logic of its possibilities. But it has become more than a concept and is a reality.
Lawyers are becoming more cognizant of the changes within the legal profession. Another interesting fact that came out of the meeting was that there is an ever increasing number of International students who are stuyding American Law. In a new global economy and there seems to be emerging a truly global workforce of professionals networked from different parts of the world working toward common goals.
The forum had an excellently organized event which encouraged discourse and dissemination of knowedge.

Appeals Do Work!

We are seriously trying to grow our appellate practice!

















Copyright www.STUS.com

Baker & McKenzie leads a trend which is more a necessity

Few law firms have been as innovative as the largest behemoth of them all - the 1.35 billion dollar Baker & McKenzie. They are actively outsourcing some of their work to their offshore outfits, point and case the Manila office which is currently providing rontline IT support and computer maintenance, marketing support for the firm around the world, word-processing, as well as clerical tasks, some translation work and the icing is - the office undoubtedly will provide full-blown legal research and document drafting for Baker & McKenzie in the U.S
Business Week carried an article to that effect where John Conroy Jr., chairman of Baker & McKenzie's management committee has quoted on legal research and writing "I don't think it's a question of whether, I think it's just a question of when,"

Additionally, Thomas Lifson who is a contributor for The American Thinker concurred to that effect by analyzing the issue and saying ".....it makes perfect sense that certain legal functions, as well as administrative ones as in the case of Baker & McKenzie, can be outsourced. Unless regulatory barriers are errected, this should become a trend. "

This leads to an extremely important observation: Large/Mega firms can benefit from legal outsourcing just as much as smaller firms and in-house counsel. It may seem like a stretch--why would a mega firm with hundreds of nameless associates at its disposal, need legal outsourcing? The simple reason is cost.

More and more in-house counsel are bidding legal work out to law firms on a fixed budget. Straight billing is no longer as common-place as it once used to be. Companies like Cisco Sytems require law firms to bid on and then work within a defined legal budget. Legal outsourcing allows firms to work within these constraints, and just as importantly, to maximize profit. In other words, if a law firm is put on a $100,000 budget, and the actual cost to the law firm to complete the work required is probably between $80-90,000. By using a legal outsroucing provider, the law firm can brings its actual cost down significantly, thus maximizing its profits in any given contract.

First salary hikes - Now bonuses?

Dont get be wrong. Its not a case of sour grapes. Kudos to all who earned those bonuses. But one begs the question - is the end cost to the client really an issue with the legal community? Among the top 5 things clients are looking for from law firms was cost saving initiatives. One can only think this is not really a priority for most large law firms. Associates are getting as much as 100% of their base salary in bonuses. According to Law.com's recent article As Times Get Better, So Do the Bonuses law firms increased the base salaries of their attorneys this year as well as their bonuses some to the tune of $150,000.

Lightened workloads getting heavy praise

by Tariq Hafeez, Esq

In today's Detroit Free Press, columnist Margarita Bauza writes, "Companies that respond to deamnds for reduced-worl arrangements are being rewarded with increased productivity, talent retention and improved employee relations, says Ellen Ernst Kossek, a workplace researcher at Michigan State University". She goes to cite a study undertaken over the last six years which finds that reduced work loads increased in 60% of firms polled and finds:

• Retention of talent was the top reason for reduced work load arrangemnets
• Hard economic times did not have a negative effect on reduced-load arrangements

Law firms will probably be slowest in adopting reduced work load for their associates, who ironically, likely need it the most. The billable requirements for associates at law firms nation-wide are almost impossible to attain without significant sacrifice in either quality of work or quality of life for associates, or a mix of the two. Much attention is being called to the system of billable hours and the absurdity of expecting associates to honestly bill for work when billable requirements are essentially impossible to reach (see the post dated 11/28/05 "The Billable Hours: Are its days numbered?"

By utilizing outsourcing as a tool to reduce workload pressure and strain on associates, law firms, can stand to gain significantly in morale and job satisfaction of their attorneys--all the while increasing productivity which results in happier clients. Law firms, no matter how huge can improve the quality of life of their associates by integrating legal outsourcing into their work. 15 years ago, heads of law firms would have laughed/scoffed at the idea that associates could reserach law on their computers without opening a single library book. Today those same law firm heads have realized the immense benefit of using Lexis and Westlaw. Similarly, while legal outsourcing may have its detractors now, it's only a matter of time before law firms realize that the last laugh is on them.

Fixed Fee Vs Billable Hour

During a recent conversation, the Director of Litigation of a Fortune 100 company indicated that he had a fixed fee contract with his law firm for litigation support. How great is that idea? It sure did not work for Walmart - well nobody gets sued like Walmart.
Nonetheless, taking cue from the Wired GCs recent post...
"If we are only talking about “overseeing” litigation (whatever that really means), perhaps I can find a lawyer who will do this on a fixed fee. We assume that it is not a lawyer at the primary litigation firm. It should come as no surprise that most litigation is billed the good ol’ fashioned way–by the hour. I don’t know how many lawyers would want to “oversee” litigation for a fixed price when the underlying case is being billed by the hour. Part of me thinks that if you need someone to oversee a case, you may have the wrong person handling it in the first place."
There is bound to be some level of compromise somewhere. Let’s discuss some hypothetical scenarios.
Scenario 1: The workload substantially increases a particular month (Sarbanes Oxley has become omnipotent). How does the law firm handle the fluctuation? Scramble to find temporary lawyers or keep highly paid attorneys on its staff on call?
Scenario 2: The workload is minimal for a few months - free money for the law firm but the GC is under pressure to get the bang for his buck
Corybantic management on both sides.
Some amount of legal work needs to be commoditized for the lack of any other term. You need to slice up the work and compartmentalize wherever possible. However small that chunk is - only then can you even start budgeting something like that efficiently.
A large portion of legal work however will continue to be based on the billable hour but why not build efficiencies where you can?

A New Balance

An excerpt taken from an article, taken from Legal Week, a UK based publication for UK lawyes, discusses a subject that corporate counsel in the US can relate to: the drive to cut legal costs, often times by legal departments taking on increasingly more work without going to outside counsel. Outsourcing routine legal work, as the article mentions, can help legal departmets control legal costs without giving up control to outside counsel. Case in point--Accenture UK, which has a captive off-shore in the Mauritius Islands.

Author: Ed ThorntonSource: Legal DirectorStart Date: 19/01/2006End Date: 16/02/2006

Law In Business: Law firms take note: in-house legal teams are taking on more and more work themselves, at the expense of their general advisers. Specialist external advice will remain in demand, but corporate counsel are confident of taking on major deals without law firms holding their hand. Ed Thornton reports

When BOC Group and Marks & Spencer (M&S) sealed a £1bn outsourcing contract in November, outside counsel were strangely absent from the line-up of key players. This was surprising, given that the deal was described by the two FTSE 100 companies as one of the largest food distribution contracts in the UK, seeing BOC deliver food to approximately 420 M&S stores until 2011. The BOC team was led by senior counsel Andrew Brackfield, an ex-Linklaters corporate partner, who worked alongside associate counsel Robert Breedon. Meanwhile, in-house lawyer Carolyn Lock led the M&S team. While Stevens & Bolton advised BOC on some property aspects of the deal, this was a deal where outside counsel played second fiddle to the in-house legal team, at best. Adrian Thurston, head of legal at MFI, thinks this may be symptomatic of a wider trend. "There is an ongoing realisation that it can be cost-effective to do work internally," he says. "[But] even well-stocked departments do not have the back-up of resources for a deal like that [that a law firm would have]. I expect it was quite a challenge." Nonetheless, with a legal department of 40 lawyers worldwide, BOC was convinced it had the resources and expertise to manage the deal in house — particularly since outsourcing was one of its strengths. "As business lawyers, we aim to know the business really well and provide a service," says Brackfield. "Economically, it makes sense to do as much in house [as possible]." . ........
Accenture’s 30-strong UK legal department found a creative way to control legal costs and bring Nevertheless, the trend among corporate legal departments to retain a greater volume and quality of work in house should cause law firms to take notice. In-house lawyers appear to be increasingly eager to try their hand at complex deal work sometimes thought to be the preserve of private practice specialists. At the same time, the Accenture example shows that the routine, day-to-day work can be outsourced further afield than the City.
Author: Ed ThorntonSource: Legal DirectorStart Date: 19/01/2006End Date: 16/02/2006

Salary Hikes Galore!

Seems like most top law firms in the country are going to follow suit. Salary hikes mean
- firms will want more bang for the buck
- will mean they will either have to increase the number of billable hours required for their associates or increase their billing rates (if the partners want to continue making the same level of profits, which I assume they do)
- Might be a strategy to retain and attract the brightest(of which there are only so many) to maintain/increase their billing rates
- Might be a strategy to fight competition posed by avenues like legal outsourcing (a losing battle eventually)
Bottom line: Nobody retained market position very long by just paying more. Clients will realize that a plethora of legal work is not necessarily the most complicated and hence requires the best lawyers in the country. They will look for and demand cheaper alternatives. Score one more for legal outsourcing/offshoring.
An excerpt from an article in Law.com....

Keker Matches Associate Salary Hikes
Petra PasternakThe Recorder01-17-2006

Days after two big L.A. firms hiked base salaries for associates, San Francisco's Keker & Van Nest announced it was matching the raise.
Keker partner Christopher Kearney said last week that the 50-lawyer litigation firm would increase the base pay for first-year associates to $135,000 to compete with three L.A. firms that announced hikes in the past month.

Personal Injury - A Valid Case

Another funny from the Washington Post...

Don't Gloss Over The Very Real Benefits Of Legal Off-Shoring

by: Tariq Hafeez, Esq. (Partner and General Counsel of LegalEase Solutions)

Off-shoring of legal work, while easily overlooked, is an important development in the legal field. For one, it has allowed US lawyers to tap into the intellectual capital of lawyers all over the world. Just as important, it has and continues to help US attorneys save significantly on costs, often times resulting savings to clients.

Case in point: Prominent US based charity: We are currently handling an appeal in the DC Circuit for a US based charity which had its assets frozen. LegalEase recently started up an appellate division, and has teamed up with a brilliant appellate attorney in Detroit-Rubina Mustafa. Rubina brings with her over 10 years of state and federal appellate experience. The federal district court ruled against the charity and its attorney, based in the Detroit area, needed to appeal the ruling. This attorney, who is a top-notch trial attorney, did not have sufficient resources or funding to file an appeal. He turned to LegalEase's appellate services to handle the appeal, from filing the summary of the arguments to the actual appellate brief.

We have a team of attorneys working on this case, all managed by Rubina. We are billing the trial attorney less than $50/hour for this high level work--and this is only made possible because of legal off-shoring. Hope this makes you think twice before glossing over legal off-shoring. I would like to read your comments on this.

The Five Most Likely Outsourcing Trends of 2006

Sometimes even I just cant keep up with the hype. Yet another indicator toward the 'ever expanding' LPO market. An excerpt relevant to the legal outsourcing market....

In fact, a recent ValueNotes report on legal offshoring predicts that employment in legal outsourcing in India will grow more than ten-fold by 2010. Another ValueNotes research shows that the number of employees in publishing outsourcing will grow 5.6 times by 2010.

CNN/IBN proflies the Legal Outsourcing Industry

Below are some highlights from a recent article appearing on CNN/IBN website on January 8, 2006 profiling the legal outsourcing industry:

They are among the more recent entrants to the outsourcing party. They are the Indian lawyers. If industry reports are any indication, the country's legal eagles could well give much muscle to India's knowledge process outsourcing growth story. The legal services sector is tipped to be the next big offshore destination and corporate lawyers are increasingly hopping on to the outsourcing bandwagon and are handling prestigious international clients.

Recent industry reports peg the annual value of legal outsourcing at $80 mn and predict that it will rise up to $4 bn by 2015 - that translates to almost 80,000 more jobs for lawyers in India.

"Indian law is based on common law and the common law governs the basic law everywhere in the world. Indian lawyers are much in demand right now due to their sheer understanding of the law," Gunjan, a partner with ZeusPro, says.

With a just a couple of thousand employees spread across less than 50 firms, LPO outfits in India offer paralegal and research support, draft and revise contracts, handle patent filing and prosecution for Multinational Corporations (MNCs) like GE, Oracle and Sun and international law firms.

The opportunities are immense and the new breed of lawyers swear by it. "I would say it is very exciting and there are tremendous opportunities for us," Gunjan says.

LegalBulk

I found this rather hilarious cartoon in the New Yorker which I felt is fairly representative... (might actually need to read Acme LegalEase)

Five Questions Law Firms Face in 2006

The following is an excerpt from an article from the Legal Times. Among the five big - "What will happen?" 's is (not surprisingly) - CAN COSTS BE CUT FURTHER?. It is interesting that most of the articles continue to mention outsourcing as a tanglible option but the legal industry is a slow moving beast. Lawyer's habits are hard to change. Yet the change is beckoning in the horizon.

Emma SchwartzLegal TimesJanuary 6, 2006
Mergers. Firm dissolutions. Associate salary hikes. Last year was anything but docile in the legal market. With ever-increasing competition among firms, 2006 looks to be equally challenging. With that in mind, here are five issues that could be -- or should be -- in the forefront of every managing partner's mind heading into the new year.
4. CAN COSTS BE CUT FURTHER?
Even as some firms continue to raise rates, they are still looking at other ways to hold down costs.
One development likely to escalate in the coming year: outsourcing.
Firms like Howrey have already tested the waters for some electronic discovery. And there may be opportunities to capitalize on India's inexpensive intellectual assets to offshore preliminary work on patent prosecutions.
But, says Bower, "There is not a lot of confidence yet in the quality of what is coming out."
Another option may be to pare down practice groups. Firms are starting to see a greater advantage in having a few practice areas with more depth and expertise, says Robert Ruyak, managing partner at Howrey. To achieve that goal, many firms are seeking to acquire specific practice groups, such as Ropes & Gray's acquisition of Fish & Neave's intellectual property group or Jones Day's buyout of IP firm Pennie & Edmonds.
But while Ruyak doesn't see Howrey moving toward a model of having just a handful of practice groups, he believes that as firms drop unwanted lawyers, it will "have the effect of making people available for other firms."
And other firms like Arent Fox still believe that by staying small they can give better service -- and rates -- with equal quality.

The New Year Resolution

We all make resolutions personally and professionally for the New Year with one of the most popular resolutions being, I want to work harder! But is that enough?
We all want to be more successful in what we are doing. One of the factors which go into that is gaining more expertise in our fields of law. But what about being more adept in running your legal department or law firm? The legal business environment is changing fast. The order of the day is speed, efficiency, responsiveness and cost. How does one look at each of these factors individually and become better at it? There are options in today’s world. Outsourcing providers let you do just that!
While you continue to focus to gaining clients and more expertise in what you do, you have to be cognizant of the fact that you need more time and capacity to do that.
LegalEase Solutions can help you take care of your legal research and writing needs. Our services include briefs, memoranda, pleadings, document review, discovery, appellate work and patent services. As one of our clients had to say
"LegalEase saved me. As a solo practitioner my time is not infinite. Having LegalEase there is like having a reliable older partner who is willing to work through the weekend to get the brief done right. With very little information LegalEase wrote a motion and memorandum of law on a complicated point of criminal law and saw the fallacy in the State's argument. The court complimented me on my written arguments and I got to enjoy at least some of my weekend - money well spent. Thanks."
By Tariq Akbar
January 5, 2006

What Matters Most? Expertise (and COST)

An excerpt from an article in the Legal Times reveals that among the three factors which inhouse counsel for corporations are looking for from their outside counsel is: COST. We provide a very viable option to corporate counsel and it is a matter of time before they realise the cost benefit of using legal outsourcing.
THE COST FACTOR Prevalent throughout the survey responses was a concern about costs. Litigation expenses are top-of-mind for a large number of corporate counsel. For almost 20 percent of the respondents, the overall costs of litigation, rather than any specific category of lawsuit, was the leading concern. Controlling unpredictable litigation expenses poses a challenge for in-house lawyers, so much so that 43 percent don't operate under a set litigation budget. The responses from the 146 counsel who were able to report the amount of their companies' litigation budgets, however, demonstrate the significant price of litigation. Of the average legal budget of $20.1 million, more than a third -- $8 million -- is directed toward litigation-related expenses. About a quarter of the companies surveyed said that litigation spending accounts for 21 percent to 50 percent of their legal budget. An additional 12 percent reported that litigation expenses accounted for more than 50 percent of their total legal budget. How does all of this translate into real dollars? Of the $1 billion-plus companies with legal budgets that demand more than 5 percent of gross revenues (8 percent of the category respondents), 32 percent spend anywhere from a quarter to one-half of their legal budget on litigation. That's between $12.5 million and $25 million annually. For an additional 16 percent of the largest companies, their litigation budget is more than half of their legal budget, which is the equivalent of $10 million to $25 million a year. The amount of money corporate America spends annually on lawsuits goes a long way toward explaining the desire of in-house counsel to reduce expenditures. For a third of the respondents, the message they most wanted to deliver to outside counsel was "control costs." That took precedence over results-oriented messages like "win cases" or "get results." Many corporate counsel, however, are satisfied with the jobs that their outside law firms are doing, with nearly a quarter of those surveyed responding with some variation of "keep up the good work."