GCs WANT TO REDUCE YOUR LARGEST TRIAL SITE EXPENSE?

Mass Tort Litigation

REDUCE HOTEL COSTS AND STAY AT THE BEST HOTELS

There are countless ways to save substantially on litigation fees and costs on larger-scale litigation.  It takes pre-planning but it will save you a fortune.   

Hotels are the largest trial site expense.  Here are a couple of examples of how to reduce costs AND stay at the best hotels.

NUMBER 1:  Let a company skilled in trial site services determine your hotel choices and negotiate rates and contracts for you rather than using law firm personnel or corporate travel departments.  They are recognized for their buying power and are more skilled in mass tort hotel negotiations resulting in significant savings and affording nicer hotel accommodations for your team. My experience with one of these companies resulted in hundreds of thousands of dollars in savings for a series of Philadelphia trials in one mass tort litigation.  Here are a few examples: 

•  $109 nightly rate at 5 star hotel for a series of trials.

• Over the course of 5 years, the client paid only a few thousand dollars in cancellation fees due to creative contracting.  The normal cancellation for just one one of the trials would have been $30k. 

• $200,000 savings versus using the client's in-house travel department's best negotiated rate at another 5 star hotel over the course of 4 trials.

• 3-4 suites per trial were negotiated into the contract at the price of the negotiated rate of a regular room.

NUMBER 2:  If your goal is to reduce costs, you might consider establishing a suites “policy” at a level with which you are comfortable.  It will make a big difference on your bottom line.  A no suites policy would, of course, save the most.  Or, a few suites per trial might meet with your approval if  they are going to be used for witness prep as well.  The policy does not have to be published, but whoever is handling your hotel arrangements needs to know.   

You might not realize it, but some people might already be getting suites.  It can be difficult to detect because the hotel expense for a trial is typically one large line item amount on your invoice.  Depending on how the hotel invoices the law firm, it could be difficult to tell what a given room rate is even when you are looking at the hotel bill itself.  By the way, hotels will format the invoice any way you would like so charges can be more transparent.  

Without establishing a suites policy, the cost of suites can easily creep up on you.  Here is how it typically progresses:  You might think, there are only going to be 15-20 trials in this litigation so it wouldn’t be that bad if the lead trial attorney has a suite.   Then, things change slightly and you are going to split openings and closings and a witness or two.  Now there are two “leads.”  What about the person who is doing the experts?  Now there are three.   If they have suites, the law firm is going to want to book suites for their clients who attend trial.  If National Counsel comes in to see part of the trial, they should have a suite if the other partners do.

SUMMARY:
Using skilled trial site professionals will reduce your hotel trial site expense significantly.  It would be much less expensive, particularly in the aggregate, to have a policy reducing or eliminating the number of suites even if you choose to deviate occasionally.

Law Firms: Get Those Big Invoices Paid Faster!

          Law Firms

     GET THOSE BIG
          INVOICES
       PAID FASTER!

I suspected that corporations sat on large law firm invoices purposefully to hang on to their money longer.  It’s got to add up to a pretty penny, right?

My slowest pay situation was a huge case where the client routinely took FIVE months to pay!  Not only was it difficult on the law firm, but it was it was very challenging the vendors as well.

I had the opportunity to talk with in-house counsel about it when he shared his own frustration about the constant slow pay situation.  He said the larger the dollar amount of the invoice, the more approvals were needed.  In this situation, it took the approval of the in-house attorney that was managing the litigation, his boss and his boss’s boss before the invoice could be submitted for payment.  Most of the time the invoices were sitting in an in box with several other huge invoices.  

After our conversation, I started sending a simple email recap every month to the attorney managing the litigation.  It was something like this:

Subject:  [Law Firm], [Case name] and [Month] Invoice

Dear Sam,

The fee amount of  the invoice i                                        $________

The expense amount is:                                                     $________

The total amount is:                                                           $________

The budgeted amount for this month is:                          $________

The variance is:                                                                  $________


The primary reasons for the variance were:

1.  _____________________________________________________

2.  _____________________________________________________

3.______________________________________________________


Most of the fees were spent in these main areas:

• ___________________________________________________

•  __________________________________________________ 

• ___________________________________________________

•  __________________________________________________

• ___________________________________________________

If you have any questions or would like more detailed information, please let me know.

Thanks.

The invoice recap helped shortened the payment cycle from 5 months to 2 months.   It contained information that made it faster for each person to approve the invoice.  The recap might have gotten the invoice moved to the top of the stack because it was easier to approve.  In any event, you might consider finding out what the hold up in the approval process is of your routinely slow-to-pay invoices so you can proactively address the situation.   It is more effective than calling to follow-up on payment status.   Give it a try.  I hope you achieve the same results! 

3 Things Every GC Should Know About Reducing Larger-Scale Litigation Fees 

SAVE A FORTUNE ON LITIGATION FEES!

1.  At least 25% of your litigation fees are due to inefficiencies!

The more people there are working on your litigation, the more inherent inefficiencies there are. 

Law firms are focused on the end result of the service they provide you.  As you well know, often times they are not even aware of how many people were involved, how many hours it took, or the process of how the work was done.  They are concerned with the quality of their work product and do not necessarily associate a cost with the work product.  It is a different way to run a business for sure, but they do provide a service you need.   

Even though it seems self-serving that law firms do not operate more efficiently, they do not know how or they would be more profitable on alternative fee cases (“AFAs”).   They think they are being efficient, but they don’t know what they don’t know.  As long as billable hours are the core of their business structure and they continue to use billable hours as criteria for advancement and bonuses, they will not have the proper incentive to change.  It is ingrained in their core and a part of their culture, so it stands to reason that it will likely be a while before there is a paradigm shift.

What can you do about it?

2.  Designate someone to focus on increasing efficiencies to reduce fees and costs on your cases

Implementing more efficient procedures, practices and creative solutions for the most consuming time drains will save you more in fees than anything else you can do.  The results are measurable and significant savings are realized in a matter of weeks.

Law firms might have practice group managers, project managers, pricing analyst, case managers, etc., but they do not have someone dedicated to improving efficiencies and reducing your fees.

My experience has been that in-house counsel are able to remedy some inefficiencies but given the magnitude of their responsibilities they do not have the capacity to work hands-on with the firms and vendors on a granular level.  

Improving efficiencies is a way for you to reduce tens of millions of dollars a year per litigation.  It deserves a dedicated person skilled in litigation and law firm operations in order to maximize your results. 

When law firms did not comply with client demands to reduce e-discovery costs, corporations had to step in and either do it in-house or outsource the work.  Increasing operational efficiencies within your own litigation is the next big cost control frontier because there is so much at stake.

3.  Multi-layer your approach to reducing fees

You know more than anyone how large of a problem litigation fees are.  The best solution might be to have a multi-layered approach from several different angles.   Consider incentivizing your in-house teams to keep an open mind and continue implementing additional cost saving measures that would provide the most value.  

Many of you are already handling e-discovery in-house or are using e-discovery vendors.  Other cost saving measures being used are Legal Process Outsourcing, legal department advisors, initiatives, continually discounting rates, budgets, AFAs, legal spend and matter management software, limiting the number of law firms, utilizing “virtual” law firms and litigation efficiency/operations experts.  The methods that save the most, cost the least and are the least time consuming for your team to implement, use and maintain need to be identified and managed.  When is enough enough?  When your litigation fees and expenses are at an acceptable level.

Summary

• Designate someone to specifically increase law firm efficiencies to: 
• reduce fees and costs significantly without sacrificing the quality of the litigation
• provide you with the highest value for your litigation fees
• enable your law firms to work more efficiently, getting cases better prepared, increasing the likelihood of better outcomes.
• Multi-layer approaches are most effective.  Incentivize your team to implement additional cost saving measures.
• Methods that save the most, cost the least and would be the least time consuming to implement, use and maintain need to be identified and managed.