1. 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

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

3. 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.

4. 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

5. 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

6. 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

7. 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

8. 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.

9. Budgeting and Forecasting

10. Budgeting
Plan
Monitor
Assess

11. 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”.

12. 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.

13. 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

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

15. 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
$ ,100.00
Total Hours
219.00
Hourly Rate $
135
Projected Litigation Hours/Dollars
$47,085.00
$0.00

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

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

18. Cost Effective Litigation Tools and Strategy

19. 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

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

21. Questions? Deanna Kwong deanna.l.kwong@HPE.com Dawn Wagner
Douglas Luftman
Sara Brody