Involving Clients, Partners And Associates In Partnering To Achieve The Most Effective Cost Control

Monday, February 1, 2010 - 01:00

James W. Quinn, an accomplished trial lawyer, co-chairs Weil Gotshal's 500-lawyer global Litigation practice.

Editor: What is the firm's attitude with respect to hourly rates?

Quinn: In the wake of the financial crisis, the world has changed significantly. Consequently, there are enormous pressures on our clients to hold down litigation costs, and we are trying to be flexible and receptive to that. We are willing to talk about a variety of different alternate fee arrangements that range from blended rates to volume discounts for very significant volume.

Frankly, we prefer not simply to discount. We have had arrangements with flat fees for particular projects. Among other things, we have entered into deals where we do offer certain discounts if there is an opportunity to be awarded bonuses based on outcome. There are now a wide variety of alternative fee arrangements that we have entered into, some successfully and some less successfully. I should add that there are certain kinds of work, say, representing a debtor in a typical bankruptcy case, that typically have to be done on a pure hourly rate. Similarly, we are not going to discount trial work unless there is a significant bonus involved. We are unlikely to be very flexible on anything that we consider to be truly cutting edge. It really is a supply and demand issue.

Editor: Are clients involved in the budget process?

Quinn: Yes. We do that on a regular basis. They often want budgets, and we are sure to update them periodically. If we do give a fee estimate at the beginning of the engagement, we examine the estimate on a rolling basis and make changes when necessary. A basic rule governing how we operate is very simple: "no surprises." Clients hate surprises, especially with regard to fees. If they understand what you are doing, why you are doing it and you involve them in the process, you avoid surprises and tend to avoid fee friction.

Editor: To what extent do you encourage mediation and exploration of settlement?

Quinn: I think that now, particularly in major cases, we generally do encourage mediation. In fact, we often suggest it early on to avoid running up significant litigation costs. Early exploration of settlement is often the best way to save litigation costs. But, there are certain kinds of cases that, for whatever reason, go to trial. For example, I just litigated a three month trial because of the issues involved, and we are awaiting the verdict. The allegations related to fraud, and our public company client was not going to settle. So, not all cases can settle; sometimes they must go to trial.

Editor: Do you use client satisfaction surveys?

Quinn: We have used client's satisfaction surveys, and we find them useful. Among the most interesting feedbacks we've received recently from a satisfaction survey was an overwhelming desire on the part of clients to get to know and work directly with our associates. The sophisticated clients understand that the associates are the ones doing a lot of the work. They want to know who they are, meet them and judge their competence for themselves.

We recently began to focus more and more on doing just that so that the associates are not just faceless names on a billing sheet; we want our clients to know them. Clients know they are getting value added because these associates are really good and make extraordinary contributions to the final outcome. It means a lot for the client to get a chance to interact and actually see the people who are doing the work, particularly now where you have very sophisticated inside lawyers who might otherwise feel that they are lost in the workings of a complex and large organizations like ours.

Editor: To what extent does the firm encourage the client to do more work in-house?

Quinn: What we found in the last few years, particularly with a number of our large Fortune 100 companies, is that we really do partner with them. We often have inside lawyers working directly on teams with our lawyers on a variety of different things. For example, I had a jury trial not long ago where one of the inside lawyers was at the table with us as part of the trial team and both put on and cross examined trial witnesses. We find that partnering with the inside lawyers is something that is very valuable, and you develop terrific relationships. They get to see us, and they have a better sense of what we are doing, and the value that we are adding. They are less likely to be concerned about the litigation costs when they know what is actually happened. They see that it is not a lot of busy work. It is real work that is contributing to a favorable outcome.

Editor: How does the firm assure continuity of experience and knowledge of the client's organization and needs?

Quinn: We develop teams of lawyers, whether they are partners or associates, who work with particular clients and get to know the client's business. Having a level of continuity is something that the clients appreciate. They want to have associates or younger partners they like work on their matters so that through continuity of experience these attorneys will learn not only about the client's business, but also come to know and be accepted by its managers. They are not reinventing the wheel each time that the client sends them a matter because they understand the complexity of the company, such as a health organization in today's regulatory climate. We want our attorneys to understand not just the client's organization, but what its goals are and how they want to achieve them. Having client teams with continuity of experience with a particular client is also an advantage in controlling litigation costs.

Editor: Would you like to comment on e-discovery?

Quinn: The ideas expressed by Judge Holderman in this issue of your publication make a lot of sense to me. People should be forced at the beginning of the case to focus on e-discovery and determine what it is that they actually need. The parties should look at the case and determine what the case is worth. Is it worth a million, ten million, or a hundred million? It's absurd to force a company to spend five million dollars on e-discovery on a million dollar case. It should be determined proportionately. Judges, magistrates and the parties have to recognize that the costs are such that somebody has to be looking at this early on in the matter to avoid this type of problem.

It'll be interesting to see how it plays out. My initial reaction is that it certainly makes sense to get the facts on which the plaintiff bases its case before hold orders, the scope of discovery and everything else gets totally out of hand. It is important that somebody, either the magistrate or the judge, makes a decision about how much of this stuff is actually going to be done. That seems to be the essence of the Seventh Circuit's Pilot Program.

Editor: It will take some time to get rules in place that will put reasonable limits on the scope of e-discovery, but what is the firm doing now to assist its clients to better control e-discovery costs?

Quinn: We have preferred e-discovery providers that we very carefully interview to ensure that we've actually negotiated rates with them that are well below market. We've told them, based on our experience with them, that we're willing to recommend them to a client, but they need to give us reduced rates, which of course is a saving to the client. In addition we have, like many other firms, a team of specialists who focus on e-discovery if its significant in a case. Obviously, it's not significant in all cases, but it certainly is in a lot of major commercial disputes, such as antitrust and securities matters. We typically have at least one lawyer very experienced in e-discovery on most major matters in which there is lot of e-discovery.

Editor: Are you folks involved, in any way, in any of the efforts to eliminate e-discovery abuses? It's not only the Seventh Circuit, but the rule revision proposals by the American College of Trial Lawyers (ACTL) and the Institute for the Advancement of the American Legal System (IAALS) are also of great importance.

Quinn: I'm familiar with the American College rules proposal because one of my colleagues is working on that. I guess that from what I have said earlier in this interview that our firm's focus has always been on benefiting our clients and partnering with them on policy issues of importance to them like those being considered by the Seventh Circuit and by the American College.

Over the last year, we have had a number of seminars for clients. For example, based on the experience that we've had, we take clients who may be less sophisticated or haven't gone through all the pitfalls yet, and we've held seminars for them. I'm pleased to say that our seminars have gotten a lot of favorable feedback. In addition, my partner David Lender co-authored the leading treatise on e-discovery.

Editor: In addition to e-discovery have you used other technologies to control litigation cost?

Quinn: One of the things that we have done is to create an in-house graphics group for trials and hearings. They do all the in-court graphics rather than our going outside and paying extraordinary fees. We use our own terrifically talented people, and they are as good as or better than anything you get outside. That can save a client an enormous amount of money.

Please email the interviewee at james.quinn@weil.com with questions about this interview.