By Laura Kibbe and Shelley Brown, Esq., RVM Enterprises, Inc.

One of the greatest challenges facing in-house counsel today is the soaring cost of litigation. One of the primary contributors to those extraordinary costs is the ever-growing creation of data and data sources, resulting in the unpredictability of e-discovery. For years the e-discovery industry has been exploring alternative fee arrangements (AFAs). The AFA methodology was created to increase predictability in litigation-related spend. The foundation is simple: Provide cost predictability and the ability to create future budgets based on historical spend. While AFAs have certainly met their cost predictability goals, in an age of complex electronic discovery, it raises a question as to whether or not the model has sacrificed expertise and strategies that provide valuable, high-quality solutions for an overall lower cost. We think so.

Rather than relying upon AFAs alone as a solution to the budget problem, perhaps we should look toward the use of more strategic methodologies to better control costs. Strategic alternative fee arrangements (SAFAs) could be the answer. In the e-discovery world, AFAs often take the form of per document charges, an all-in processing flat fee or some combination thereof. But those AFAs do not incentivize the service provider to reduce volume (and therefore cost). Instead, we should look to implementing early case assessment and litigation readiness strategies to help mitigate e-discovery costs. At first blush, the higher initial spend in per hour analytics or consulting may seem counterintuitive to cost savings, but if the exercise results in a reduction of the reviewable universe by 40 to 50 percent, total case cost goes down. The perfect SAFA model would combine the cost-predictability goals of the AFA while encouraging new strategic approaches to traditional tasks, resulting not only in a lower total case cost but also in giving the case team a strategic advantage over their adversary. Knowing their case early on can direct case strategy.

Utopia or Reality: A New Approach

The traditional electronic discovery budget looks like a laundry list of unit prices and assumes, for the most part, that a linear process will be followed: collection, processing, search terms, maybe analytics and a review of the resulting data. In this model, ensuring that each unit price is as low as it can be will lower costs and create predictability, but at what effect on total case cost? What if the collected data contained information that was particularly harmful to your client’s theory of the case? What if the collected data does not include a key custodian? What if the collection was generally overbroad due to similarly overbroad corporate data retention policies or nonexistent litigation readiness plans? In failing to take a strategic look at what the case team hopes to accomplish in discovery, those unit prices often result in spend which could have been avoided altogether. In addition, that traditional model does not necessarily identify the key documents early enough in the case to assist the client in reevaluating its strategy.

The analytics tools that are available today make it possible to spend time and resources on a true early case assessment that can result in an overall lower total case cost. Ultimately even greater savings and efficiencies could be achieved. As with law firms, engaging an experienced partner early on to help formulate strategy is important. Delegating the execution of that strategy to more cost-effective resources and engaging a consultant with specific e-discovery subject-matter expertise (and likely a higher billable rate) broad enough to span information governance, litigation readiness and e-discovery can reduce downstream discovery spend.
Continue Reading Alternative Fee Arrangements: Panacea or Problem: Delegate strategically to reduce downstream litigation costs

Interview with Damien Atkins, Panasonic Corporation of North America

Rapid turnover in the C-suite, full-blown proxy fights, merging business cultures – Panasonic’s GC Damien Atkins has borne witness to it all. He discusses his M&A successes, and one pivotal failure, along with his plans for Panasonic’s in-house operations and how to face global compliance concerns. His remarks have been edited for length and style.

MCC: Congratulations on being included in the list of the “Top 100 Most Influential Blacks in Corporate America” by “Savoy.”    I understand the magazine received over 500 nominations.

Atkins: Thank you. It was particularly gratifying because it recognizes African-Americans who not only have made an impact on corporate America but who have also contributed to the betterment of their communities.

MCC: Tell us a little about yourself and your background.

Atkins: I’m originally from Oakland, California. My father joined the Foreign Service when I was young, so a lot of my boyhood years were spent in Ecuador, Panama and a number of other countries. After graduating from Banneker High School in Washington, D.C., I received a B.A. from Stanford, then moved back east to attend NYU law school.Continue Reading Change is More Than Just Talk at Panasonic: Creating a Culture of Compliance and Collaboration

By: Rees Morrison

This article explains how you can predict the amount a company’s law department spends on outside counsel based on the revenue of the company. Such a prediction can be useful for law firms, for example, when estimating how much of a given company’s expenditures the firm receives (the so-called share of wallet) or when proposing additional work (share of future wallet). For law departments, they might want to bootstrap a comparative analysis of their own spending against competitors who will not divulge proprietary information.

To explain how we make these predictions, we draw on data from the benchmark surveys conducted during the past five years by General Counsel Metrics, LLC. Specifically, the data set covers the outside legal expenditures and revenue for 145 submissions by 105 different law departments in the energy or utilities industries (the power industry, when grouped together). Collectively, the companies reported 2,916 lawyers and $670 billion in revenue; 89 of them are U.S. companies, 33 are Canadian and seven are British.

To predict spending on law firms (and the small portion on other service providers), we use a powerful statistical tool called linear regression. Regression predicts the value of a response
Continue Reading Using Stats to Predict Outside Legal Spending