ACC – Charlotte Chapter November 2, 2016 Managing Legal Spend ACC – Charlotte Chapter November 2, 2016

Approaches to Managing Spend What Works Best? Beyond the Billable Hour Today’s Topics Approaches to Managing Spend What Works Best? Beyond the Billable Hour

Common Approaches Outside Counsel Guidelines Approved Counsel Lists Legal Project Management Blended Rates

Outside Counsel Guidelines ACC Model – 4 pages: 0.1/hr. (6 min) increments Only 1 timekeeper for conferences Large Pharma Co. – 39 pages: All legal research billed at 2nd yr. associate rates Proprietary task codes required, even for flat fee work

Approved Counsel Lists Useful as a quick reference list Tracks lawyers/firms who have achieved favorable results, added value and understand the company Generally should not be used to exclude appropriately qualified new counsel

Legal Project management Define a matter’s scope: Goal Description of work Staffing Schedule Budget Monitor status and budget Address changes in scope Analyze matter outcome

Blended rates Agree to a single rate for all time keepers Blended rate more palatable to others Distorts incentives for work allocation

What really makes a difference? Budgets, especially by phase Early discussion of costs and fees Control over staffing Alternative Fee Arrangements (AFAs)

It’s about time

Today’s Law Firm Environment

The Trusted Advisor, Charles H. Green

Alignment

Predictable Fees

Transactions Transactions Department Service Offering Revenue Opportunity Supplement General Counsel/Assistant CG Monthly/quarterly retainers Value-Based Transactional Work Flat-fee engagements with defined scope Contract Management Services Subscription or per-document/page prices

Regulatory ARGA Practice Group Service Offering Revenue Opportunity Chief Compliance Counsel Monthly/quarterly retainers Regulatory Reviews/Checkups Flat-fee engagements with defined scope

Intellectual Property Intellectual Property Department Service Offering Revenue Opportunity Chief Patent Counsel Monthly/quarterly retainers PTO Searches, Patent Application Prep, Prosecution, and Filing Flat-fee engagements with defined scope PTO Litigation Value-based goal-aligned pricing

Litigation Litigation Department Service Offering Revenue Opportunity National/Coordinating Counsel Monthly/quarterly retainers Legal Process Consulting Project-based flat-fee engagements Second Opinion Advisory Services Project-based flat fee engagements Traditional Litigation Value-based goal-aligned pricing

Developing Budgets using Monte Carlo Simulation Metric Triangle Distribution Data Points Partner Associate/ Of Counsel Paralegal/ Legal Assistant 10th Percentile Minimum $15,587 $1,626 $0 50th Percentile Likeliest $125,513 $49,251 $3,718 90th Percentile Maximum $634,272 $296,397 $28,590

Partner Fees Percentile Total Fees 10% $98,000 50% (Median) $238,000 90% $456,000

Associate/Of Counsel Fees Percentile Total Fees 10% $39,000 50% (Median) $105,000 90% $211,000

Paralegal/Legal Assistant Fees Percentile Total Fees 10% $3,000 50% (Median) $10,000 90% $20,000

Total Fees Percentile Total Fees 10% $200,000 50% (Median) $369,000 90% $595,000

More to Consider Second Opinions Contingency Pricing E-Discovery Vendors /Comparison Process Analysis Secundment Inside counsel / Outside counsel /Legal Service Providers

Mark P. Henriques Phone: (704) 331-4912 E-mail: mhenriques@wcsr.com