Mounting Legal Fees – A little less talk and a little more action please

Cost containment is the number one topic at every in-house counsel event I have attended, but is anything actually being done to change it? I say no. Sure, everyone is scouring their bills, proposing alternate fee arrangements and looking for any opportunity to cut costs. There is no doubt that everyone is diligently working to contain legal fees. But is that actually changing anything? All it really amounts to is managing the bills.

The key to containing legal costs is managing the cases, not the bills. Let’s face it, the cases dictates the fees. Unless in-house counsel shifts their focus to managing the cases they will continue to face exorbitant legal fees. The key to containing costs is to manage the process. You need to asses your cases honestly and decide on the most efficient method to collect the data, cull it, review it and produce it. It comes as no surprise that the most expensive component is the review and not the actual collection, processing or hosting of the data. Yet most in-house counsel I have spoken to have no strategy for reviewing documents; they depend on outside counsel without questioning their approach to document review or requesting detailed protocols, budgets, or projections. Even with detailed RFP procedures little to no inquiry is made into the minutiae of how the review will be handled.

In this humble blogger’s opinion, the solution to reducing costs is having a review protocol for every case. The most successful reviews usually start off with an effective culling of the data using a concise term list that narrows the data set based on responsiveness. Then a successful first pass review can be completed. There can be no argument that allowing first year associates at firms to handle a first pass review is typically a colossal waste of money. They - and I say this having been first year associate - have no experience, they would usually rather be anywhere else, and are completely unmotivated to deliver. So what options are you left with? Outsourcing on-shore (translation U.S. contract attorneys), outside counsels’ staff attorneys, or outsourcing off-shore. Regardless of which of these options you choose, you will still need to manage the process. Here are some suggestions:

Schedule project planning & kickoff meeting

• Set expectations at the outset of the project

• Request a written project plan with established deadlines and checkpoint meetings

• Agree on timing for completion of critical stages of review

• Discuss budget and costs

• Ask to meet your project manager

Establish agreed protocols for review

• Discuss case-specific issues such as witness or fact pattern priorities

• Identify substantive factual and legal issues that may impact review strategy

• Review and agree on parameters for “first pass” review versus substantive review

Discuss technology platforms to be utilized

• Ensure compatibility between e-discovery tool, outside counsel and review facility

• Discuss review platforms to be employed and process for production of data, if necessary

• Discuss internet speed and bandwidth connectivity to data hosting site

Review security & confidentiality practices

• Request documentation of standards and procedures

• Validate compliance with any client-imposed security or confidentiality policies

Require constant supervision and quality control checkpoints

• Meet with project manager and ensure expectations are aligned

• Ask for results of quality control checks during the project

Monitor budget & request regular updates

• Set schedule for receipt of billing information and estimates

• Discuss options for managing project costs (e.g. hourly versus per-project fees)