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When Preferred Vendor Programs Go Bad

It has become quite common for major corporations to institute preferred vendor programs for their legal representation, under which a limited number of law firms pre-qualify to do legal work for the corporations and the corporations turn exclusively to these law firms. As an article on the American Bar Association’s website noted in 2014: Companies create preferred counsel lists not only to cut costs but also to build relationships with subject-matter experts relevant to their industries in their most important geographical areas. By consolidating work across fewer firms, companies deepen their counsel’s familiarity with their issues and get more consistency in their representation. Corporations are also using preferred vendor programs to select other types of outside professionals – including, significantly for our purposes, litigation consultants, jury consultants, litigation graphics consultants, and trial technicians. A few years ago, in fact, we published an article here suggesting no fewer than 17 best practices that should apply to the implementation of a preferred vendor program for trial consultants. The third of these suggested best practices perhaps should have been listed as the first, since the way I see things in our industry, it is the most relevant to what is going on today. It was: Remember, litigation is generally a one-time thing: You never want to be so focused on price that you overlook this. For trial support, you generally only get one bite at the apple, and vendors, especially new ones, can be a risk. So, as you consider procurement, be mindful of quality. Trust me, all firms are not created equal in this industry.

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At A2L, we work on many disputes and trials of various types and sizes. Before starting work, we routinely provide our customers with estimates of what we think it will cost to engage us to conduct a mock trial, prepare trial presentations, assist in the development of the opening statement, and run the courtroom technology.   While it’s never easy to estimate the final costs of fast-moving complex litigation, it's something that firms like ours and large law firms do every day. We've been doing it for 24 years, and we've even pioneered some innovative pricing strategies for litigation graphics and trial tech work. However, I've noticed two schools of thought when it comes to estimating, and one of them seems to lead to better outcomes.   In shorthand, I'll call these two methods a top-down method and a bottom-up method. In my experience, the top-down method leads to more successful engagements, more wins, and much better and trusting relationships.  

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Any time it is feasible, I prefer to price our work using alternative fee arrangements (AFAs) of some sort. They give our customers, which are generally major law firms, predictability and a sense of control. In addition, they provide predictability and control to the ultimate client that is paying the bills, which is typically a large corporation. For A2L, alternative fee arrangements, such as fixed fees, fee structures with a floor or a ceiling, or bonuses for winning a case, offer enormous benefits as well. We achieve the same financial predictability that our clients seek, and AFAs allow us to create closer relationships with our clients. And for firms like ours, our clients, and their clients (the major corporations), alternative fee arrangements do something much more important than creating financial controls. They return the focus to winning.

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by Ken Lopez Founder/CEO A2L Consulting Imagine a world in which the best trial lawyers work in small boutique litigation firms and charge clients half of current rates. Many people have imagined such a world for a long time, and even though we're not there yet, we're closer than we used to be. Today, a few of these smaller firms do exist. They are being run by some of the world's best trial lawyers, and these lawyers do in fact charge a lot less than they used to. However, this does not represent a new type of law firm; this type of firm has always existed. After a while, these firms either become large law firms with a refreshed culture of entrepreneurialism (e.g. Boies Schiller) or they get absorbed into a big law firm (e.g. Bancroft LLP into Kirkland & Ellis). Only a small handful of firms have found something of a middle ground and are able to deliver large law firm results without a lawyer headcount in the thousands (e.g. Bartlit Beck and Williams & Connolly). Working closely with boutique law firms as we do, I see that large companies are getting much of what they hoped for. They get exceptional lawyering, better rates, and that big-firm swagger that unmistakably contributes to winning cases. There are some gaps, however, and the best of these firms acknowledge it and fill it with litigation consultants. It turns out that sometimes the resources and scale of a large law firm are precisely what is needed to overwhelm and overrun an opponent. A large enough army can always overrun even the most elite small special forces team. However, this is only true if the elite group does not have a means of bringing in more support on a moment's notice. The best in-house departments see this nimbleness as a strength.  Our litigation consulting firm is often called upon to serve in this role. So here are 12 ways that we can make a litigation boutique as powerful as a very large law firm. We help keep prices down. If you're a big law firm, built into every hour billed is a cost for marketing, all those offices, and all that support staff. That is not true for a small firm. The small firm does not need to keep full-time staff on hand for services that are more efficiently outsourced (e.g. litigation graphics, trial technician services, and other trial consulting services). See 17 Reasons Why Litigation Consultants Are Better at Graphics Than Law Firms. We amplify the skills of the best members of the trial team. Part of our role for many of the top trial lawyers is to help them hone their skill set. See Your Coach Is Not Better Than You – in the Courtroom or Elsewhere. We amplify the skills of other members of the trial team. In the new litigation boutiques, there are often a handful of superstars, but there are always some lawyers who can benefit from learning the best practices of the best trial lawyers. Firms like A2L are in a unique position to transfer skills from one top trial team to another. See How to Get Great Results From a Good Lawyer. We free up the busiest trial lawyers to do what they do best. When you're one of the elite, management of your time is essential. Saying "no" and letting go becomes the new "yes." See How Valuable is Your Time vs. Litigation Support's Time?

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by Ken Lopez Founder/CEO A2L Consulting At A2L, we have worked with thousands of clients over the last several decades. When we first started, almost no trial lawyers had experience with litigation consultants. However, as time went on, the majority of the people we work with have used either jury consultants, litigation graphics consultants, or trial technology in-court specialists at some point in their careers. All these years later, perhaps 20 percent of our clients are first-time litigation consulting users. Not surprisingly, first-time users exhibit many of the same fears that newcomers have shown for decades. Most of these fears are simply fears of the unknown, not actual problems with using litigation consultants. At the core of these fears is a fear of being out of control. But when is a client ever really out of control? Never. We service providers strive at all times to make our clients happy.  Still, many fears persist about using litigation consultants the first time. Fear: Costs will spiral out of control. Reality: In my opinion, some of the firms who have failed in our industry helped create this fear. At our firm, we strive to be completely transparent about costs. To that end, we've developed alternative fee arrangements, we've developed loyalty programs, and we are deadly serious about telling our clients everything they need to know about costs. Fear: I'll be revealed for who I really am. Reality: Most good leaders struggle with imposter syndrome to a degree, myself included. In my experience the best litigation leaders not only question their approach regularly but they invite that type of questioning. See, 10 Criteria that Define Great Trial Teams. Fear: I don't want to be told what to do. Reality: Only a non-savvy litigation consultant would tell you what to do. Remember, you're the client. Yes, winning is a priority but so is building and maintaining a relationship with you.

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  by Ken Lopez Founder/CEO A2L Consulting In recent years, I have seen in-house counsel become increasingly involved in litigation. Gone are the days when in-house would simply hire the top name litigator and hope for the best. Today, in-house counsel help determine trial strategy, they closely manage budget, they assist in choosing litigation support consultants, and they sometimes take a leadership role on the trial team. However, since trials are relatively rare and not many in-house counsel are trial lawyers themselves, how are in-house counsel supposed to effectively contribute in a litigation environment beyond simply managing the purse-strings? Enter this new and free book, The In-House Counsel Litigation Toolkit, a first of its kind for A2L Consulting. We have published more than a dozen wildly popular books over the last several years that have been collectively downloaded more than 100,000 times. However, this new 172-page book is the first A2L book designed for in-house counsel and their outside counsel. It contains 50 hand-curated articles focused on litigation and the role of modern in-house counsel.

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  by Ken Lopez Founder/CEO A2L Consulting Earlier this week I published, 25 Things In-House Counsel Should Insist Outside Litigation Counsel Do. I realized something important while writing that article and while participating in follow-up discussions with readers and colleagues. It's an important realization as I think recognition of it might just lead to better litigation results and money savings for in-house counsel. Here it is. Because of the current state of the relationship between most in-house counsel and outside litigation counsel, outside counsel are not asking for budget for everything they believe would help win a case. This is leading to short term savings and longer term major expenses.

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by Ken Lopez Founder/CEO A2L Consulting A little more than a month ago, I surveyed our readership and asked, "how does in-house counsel hire outside litigation counsel?" Six possible answers were presented in random order. In-house chooses the lowest priced firm from a group of approved firms. In-house hires the best litigator based on prior experience. In-house hires the best litigator based on their reputation. In-house hires their litigator friends and former (or future) colleagues. In-house hires the litigator most likely to generate a win. Finally, a write-in field for other responses answers Having worked in the litigation industry for more than 20 years and seeing favoritism trump skill plenty of times, I expected some cynicism to show through in the answers provided. However, even with that expectation, I was still very surprised with the results.

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