Page 8 - CCCA62_2011

CCCA_V5No2_Dept-Performance-FIN.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 5/5/11 11:34 PM Page 8 Performance In The Law Department Regional retainers How an uncommon fee arrangement is paying off for both sides By Richard G. Stock everal weeks ago, a full-service The prerequisites SCanadian law firm told me about a The company had spent multi-year alternative fee arrangement much of the last three years developed by one of its clients. The gathering good data about company was U.S.-based and was the number and types of expanding its North American program cases which had been with its litigation counsel. I found many referred to counsel. That features to be familiar, but there were a meant details of all legal number of others which are uncommon. fees and expenses — expert These went a long way in creating the fees, court reporting fees, confidence essential for a win-win mediator fees, travel costs financial arrangement. and more.The fees,expens- Some Canadian insurers, financial insti- es and indemnity payments tutions and several levels of government were rolled up for each region.The legal continue unchanged. use 50 firms,and a few use in excess of 100 fees covered everything that the company The firm’s proposal was asked to suggest firms. Other organizations such as CP had paid to terms, including trials and which local firms, if any, it would normally Rail, Bombardier, DuPont, Bruce Power appeals.Three years of data, thousands of use to service the portfolios of work within andVancouver Coastal Health rely on only cases divided across eight regions provid- the region.These firms were to be sourced a handful of firms.Admittedly,it is easier to ed a solid information base. from the company’s roster of local firms. concentrate the work if it is corporate- The company invited a number of its Law firms were asked to make a pro- commercial rather than litigation in nature, local counsel to consider becoming posal in the form of a single fee for a or if the company’s footprint is regional regional counsel. Those which expressed region for a three-year period. The pro- rather than national or international. an interest were provided with three years gram was designated as “retainer-based” The company had been reducing the of historical data, the number of pending because firms are then told how much number of its litigation firms from more files, and with the company’s projections revenue they are to receive when the year than 120 over a 10-year period.One reason for new files for several years forward. begins.The figure can be adjusted at the was due to a sustainable reduction in its end of the year based on experience, but volume of commercial litigation.Still,it had Proposals and selection the rules for this are made clear up front. firms in nearly every state and a number The company was large enough to desig- Once the work gets under way, region- across Canada. The time had come, they nate lawyers from its legal department as al law firms submit electronic “shadow reasoned, to “regionalize” its commercial, litigation managers.Workflows and moni- bills” detailing their hours and expenses general liability and employment-related toring could then be aligned with the for each case.The bills are used for month- litigation.That meant identifying only eight eight regional firms. Assurances were ly and quarterly audits, but they are not firms to serve as regional counsel, giving quickly given that the litigation philosophy the basis for payment. External counsel them the flexibility to retain local counsel of caring for customers and of protecting guidelines continue to apply.Only the tra- ISTOCKPHOTO should they require assistance. the company’s brand and reputation would ditional fee arrangements are changed. 8 CCCA Canadian Corporate Counsel Association SUMMER 2011