Measuring the Effectiveness and Value of Your Litigation Spend Session 1007 Wednesday, October 19, 2016 | 11:00 AM – 12:30 PM Deanna Kwong – Hewlett Packard Enterprise Dawn Wagner – Zurich North America Douglas Luftman – Lecorpio, LLC Sara Brody – Sidley Austin LLP

TOPICS Alternate Fee Arrangements Budgeting and Forecasting Cost Effective Use of Litigation Tools

Alternative Fee Arrangements Alternative fees arrangements – a hot topic for discussion. What’s wrong with the billable hour? It lacks the predictability that clients are looking for; It is hard for clients to manage costs; and There is a potential misalignment of client’s and law firm’s interests.

Alternative Fee Arrangements (Cont.) Types of Alternative Fee arrangements: Discounts straight discounts tiered discounts based on volume Blended Rates brings down partner rates; reduces “sticker shock” simplifies budgeting can misalign interests Fixed or Flat Fees for projects, phases or tasks, entire case provides predictability mutual understanding of scope is essential

Alternative Fee Arrangements (Cont.) Fee Cap not to exceed set fee for task, phase or case hourly rates accrue against the fee cap but stop at the cap sometime used with a collar Retainer or Recurring Flat/Fixed Fee fixed priced paid in equal installments covering a defined scope of work generally used for routine or advisory matters can be used for a regular set of similar matters important to agree on scope and quantity

Alternative Fee Arrangements (Cont.) Bonus/Success/Contingency Fee can be in combination with discounts or fixed fees payment tied to specific outcome (results or timing) seen as aligning interests Risk Collar a “risk sharing” arrangement for tasks, phases, entire cases done in combination with discounts and fixed fees firm and Client agree to a fixed amount for the scope and collar (percentage above/below the fixed amount) that allows for a percentage adjustment if the fees fall above or below the collar acts as a buffer for unexpected developments that impact the complexity or amount of work requires joint understanding of scope and communication of change in circumstances

Alternative Fee Arrangements (Cont.) Best practices when proposing/structuring an alternative billing arrangement Determine what is a successful outcome? What is the risk involved? What is the purpose of the AFA? Define and document the scope, including key phases/tasks, anticipated timelines, in-house and/or local counsel responsibilities, etc. Noting what is excluded can be just as important as what is included. Consider the unexpected outcome and discuss that. Document key assumptions used in setting the terms of the AFA, highlighting phases or tasks with the largest amount of uncertainty that may be most likely to vary from initial expectations. Include option for “good-faith” adjustment (in either direction) as deemed necessary due to a significant change in assumptions

Alternative Fee Arrangements (Cont.) Once the arrangement is in place – Communicate the terms and scope of the arrangement to the key team members (of the internal and external teams). Closely monitor time/tasks being entered to proactively detect unexpected time entries or “scope creep.” Communicate regarding any significant changes in the underlying assumptions that may result in the need to renegotiate the original fee terms.

Budgeting and Forecasting

Budgeting Plan Monitor Assess

Planning Billing Guidelines should include litigation plan and budget requirement Budget should be defined and/or sample provided “The budget should provide a detailed estimate broken down by categories of activities (e.g. pleadings, discovery, motion practice, etc.)description of anticipated activities within each category of activity, estimate of attorney/paraprofessional hours required per activities and related hourly charges. The budget should also provide a detailed estimate of anticipated expenses”.

Initial Strategy Discussion An effective and strategically sound litigation plan is the responsibility of external counsel and the in-house attorney and should be developed in a timely manner. Strategy Discussion should be held shortly after counsel retention and should include developing a focused, cost-effective case management and resolution strategy reflecting facts and circumstances of the case.

Initial Strategy Discussion cont. Type of case – Active vs. Passive Defendant Staffing & Resources of firm and company Pros and cons of early pleadings Answer vs. Motion to Dismiss Discovery & Key Witnesses Checkpoints for revisiting budget

Budget categories Case Assessment, Development & Administration Pre-Trial Pleadings and Motions Discovery Settlement or ADR Preparation Trial Preparation and Trial Appeals Significant Expenses

Sample Non-Detailed Budget IX. Expenses   ● Travel -- for depositions $600 ● Court Reporter Fees $2,500 ● Mediation $1,500 ● Expert Fees $3,000 ● Document Management System Not anticipated at this time ● Other Copy charges $500 Total Expenses $ 8,100.00 Total Hours 219.00 Hourly Rate $ 215.00 135 Projected Litigation Hours/Dollars $47,085.00 $0.00

Monitor & Assess Tracking the budget Revisiting the budget Accountability Assess – Final Stage and #1 Stage

Cost Effective Litigation Tools and Strategy Norton Rose Fulbright Litigation Trends 2015 Report, May 2015

Cost Effective Litigation Tools and Strategy

Cost Effective Litigation Tools and Strategy Early case assessment What is the objective for the case? Early dispute resolution Streamlining discovery Predictive coding Remote deposition technology Contract review team Leveraging prior litigation

Cost Effective Litigation Tools and Strategy Staffing review Mock juries The inside game

Questions? Deanna Kwong deanna.l.kwong@HPE.com Dawn Wagner dawn.wagner@zurichna.com Douglas Luftman doug.luftman@lecorpio.com Sara Brody sbrody@sidley.com