BLG Gets Nod from ACC: Value Champion

The Association of Corporate Counsel has announced its 12 “Value Champions” for 2013 — and a major Canadian law firm has been recognized for its innovative pricing structure.

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Borden Ladner Gervais LLP is the only Canadian firm mentioned as part of the initiative — which honours co-operation between firms and law departments — for its partnership with Healthcare Insurance Reciprocal of Canada. The company negotiated a six-year partnership with BLG in 2011 based entirely on value-based fee arrangements.

The 12 winning partnerships are selected from 75 nominations, and highlight important trends in alternative fee arrangements. General counsel reported an increased reliance on legal-process outsourcing firms for high-volume matters (such as contract work), while they bring more complex and strategic work in-house.

Relationships with law firms are still fundamental, of course, but corporate departments are more than ever looking to build long-term relationships with “preferred firms” that are willing to negotiate value-based pricing structures. Some corporate law departments, in fact, have reported moving 50 to 80 percent of their external legal spend to value-based fees.

Other cutting-edge cost-saving strategies included the use of project-management software, as well as engagement in class actions and multi-party litigation. In one instance, 13 legal departments pooled their resources in joint defense litigation.

“The ACC 2013 Value Champions send a powerful message about what general counsel value most in law firms,” said Veta Richardson, the ACC’s chief executive officer.

“It demonstrates that the in-house legal community increasingly demands value-based fee structures that create alignment of objectives and incentivize more effective use of resources. The legal marketplace is changing and more and more corporate lawyers around the world are both driving efficiency in their own departments and moving beyond the billable hour.”

Other winners announced in the ACC’s press release include:

  • ACEA SpA (Italy) While improving the legal department’s reputation for internal client service, achieved 100 percent budget predictability and 31 percent decrease in lawyers’ fees via a legal work risk assessment platform and implementation of outcome-based fees for external counsel.
  • Bank of America Moved to alternative fee arrangements (AFAs) for more than 80 percent of their litigation docket and centralized defense litigation work with 30 firms, down from hundreds. Its client/panel collaboration model improved results, including in the expensive e-discovery arena.
  • BT Global (U.K.) Shifted 30 percent of legal work requests to a legal process outsourcing (LPO) provider for end-to-end handling, freeing inside counsel for high-value projects. Also employed a “legal front door” triage system and moved experienced lawyers closer to company growth markets.
  • China State Construction Engineering Corporation (Dubai) Insourced all contract work, gained efficiency with technology and employed new law firm management practices. The company uses fixed fees with success bonuses for outside counsel, a switch that enhanced recoveries by 60 percent and saved 50 percent on external legal fees in 2012.
  • “Hot Fuel Litigation” with Shook, Hardy & Bacon13 defendants including 7-Eleven, Circle K, Marathon Petroleum, QuikTrip and Kum&Go teamed up to share costs and collaborate on strategy to achieve a favorable ruling in high-profile multi-district litigation. Defendants who decided to bear legal costs alone settled prior to trial.
  • Marsh & McLennan CompaniesReduced outside legal spend by 56 percent over four years — a time period including international growth and acquisitions for the company. Implemented a preferred provider program using AFAs with partner firms, while also focusing on internal efficiency through technology implementation, data analysis and benchmarking.
  • Mondelez International with AxiomSaved millions in legal costs related to ensuring the integrity of all contracts during the company’s spinoff from Kraft Foods through fixed-fee billing methods supported by carefully crafted workflows and playbooks. Both companies took away a better contract management system/database for long-term use.
  • NetAppImplemented a multi-faceted plan that included new technology, a focus on analytics and dashboards, employing value-based fees and leveraging vendor relationships to exponentially increase efficiency and cost-effectiveness. Improved cycle times by 350 percent in one legal work area.
  • Nike with Seyfarth ShawDramatically improved efficiency and cost-effectiveness with a formal, technology-driven process to select the right legal provider for each project. Reduced contracts turnaround time from 15+ to 2.6 days, an 83 percent increase in efficiency, while freeing up in-house counsel for more sophisticated work.
  • Office DepotReached a tipping point, with more than half of external legal spend now under value-based fees, and reduced outside legal spend by 30 percent over three years by consolidating portfolios with preferred firms under AFAs. The company also assembles joint defense groups to handle patent troll litigation using AFAs, which has saved approximately 65 percent in legal fees.
  • United Technologies CorporationWith relentless focus, UTC has moved 70 percent of external legal spending to fixed fee arrangements. The company implements this strategy globally, and in addition to lower costs, has enjoyed better partnerships with its firms.

For more information, contact Lee Betancourt (betancourt@acc.com)

David Dias

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