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NATL61_034-039 03/08/2007 09:43 AM Page 35 Mike Tchorzewski Feature Assistant General Counsel, Canadian Air Transport Security Authority Eric Miller Vice-President, Chief Legal Counsel, Domestic & International, Nexen Inc. an alternative basis at less than 25%. He blames several factors: will escalate,” says Stock.Those running corporations are look- inertia;added administration;the habit of billing by the hour;and ing at the bottom line.“Why is my legal budget going up? That’s the risk-averse nature of lawyers generally.As well,he says,“we all the only question that CEOs and CFOs ask.” talk about partnering, but then we treat our law firms like ven- They’re not just singling out legal departments, they’re examin- dors.” He advises in-house counsel to “stop complaining about ing every cost of doing business in order to stay competitive.“When your law firms charging you too much money. Start looking and they see 10% increases in unit costs,as well as an increase in volume exploring ways to make your law firms partners with you.” of work,they want explanations and they want solutions.They real- ly want to know what you are going to do about it,” says Stock. Corner office pressure Long held as the gold standard method for reducing legal Some in-house lawyers claim they’re getting more control over costs, the well-known DuPont Legal Model, or convergence costs, says Richard Stock, principal of Catalyst Consulting in process, applies business discipline to the practice of law. Toronto, but he hasn’t seen a great deal of evidence that it’s hap- Beginning in 1992, E.I. DuPont de Nemours and Co. greatly pening—at least not yet.“There are a number of good strategies reduced the number of outside law firms it employed and imple- being employed with more determination and frequency than we mented cost-control measures. RIGHT: JAZHART STUDIOS tutions pay what they’re billed without formally negotiating any strategic partnering and collaboration with outside counsel to saw three years ago.” But most of the time, corporations and insti- The model’s strengths lie in building relationships through broad-based agreements. ensure that legal resources are properly reused instead of always Stock says that the unit cost of legal services is escalating as law reinventing the wheel. Its features include offering incentives LEFT: MIKE PINDER, firms continue to charge eight to ten percent more each year. and alternative fee structures. But naysayers insist that narrowing the number of outside firms and setting tight restrictions on the Meanwhile, CEOs and CFOs continue to pressure general coun- remaining ones doesn’t necessarily guarantee lower costs or bet- sel to cut costs and to explain the rise in legal fees. ter service over time. “There’s no doubt the pressure is there and in my opinion it MARS 2007 CCCA Canadian Corporate Counsel Association 35