Editor: What types of litigation get most of your attention today? What future trends do you see?
DeGroote: Like most companies, we face a smattering of employment and commercial cases and the occasional personal injury matter. In addition, we deal with the types of cases that you might expect for a consulting firm specializing in systems integration and managed services, such as intellectual property disputes. Occasionally, our company is asked to respond to a subpoena from one of our customers asking for help in litigation against a software supplier. Often the subpoena asks us, as the integrator, about what representations may have been made by the supplier.
One trend I have seen is the use of in-house trial lawyers for portions of a company's docket. BearingPoint has found this strategy particularly effective - from both a cost and a results standpoint - in complex technology litigation and other specialized matters.
Barry: We, too, have a little bit of everything, including business, commercial, personal injury, property damage and employment litigation. One trend that I have noted is that law firms are becoming more responsive to the need to keep costs down. Recognizing that management is a two-way street, they are checking with us before incurring costs on a case and in other ways making sure that they are in sync with in-house counsel's strategy for the case.
Denniston: Class actions are getting a lot of my attention. I see two varieties. The first I call "plaintiffs du jour," which focus on the cause of action fashionable at the time. Others are of a more commercial nature. On the plaintiff's side, we are pursuing our claims more proactively than in the past.
Although the volume of our litigation has remained flat, even as our company has grown, the judicial system in recent years has seen an exponential increase in the number of cases and size of judgments. Until there is civil justice reform, I suspect the growth in litigation externally will continue.
One of the areas in which I anticipate an increase in litigation is intellectual property because it is so critical to modern business. I think that we will also see more arbitration of international disputes as the economy continues its global expansion.
Editor: Where do you see the greatest need for civil justice reform?
Denniston: A root problem is elected judges. I would like to see all judges selected by the systems used in states like Missouri where the governor appoints judges until a specified retirement age or for life. In addition, the judges must be reasonably compensated. Appointed judges with reasonable compensation tend to be the most independent and least affected by fashion and fad.
Since it is not likely that the states that elect judges will change their selection process any time soon, more practical areas for reform include class actions. Among a variety of other things, I would change the standard "opt in" to "opt out" procedures. The current "opt out" procedures result in such big numbers of plaintiffs that they create a disproportionately great threat. I would also like to see caps on punitive damages and venue reform.
Editor: What litigation-management techniques do you find most useful?
Denniston: Early case analysis is a key. Where are the areas of strengths and weaknesses in the documents, witnesses and defenses? The tendency is to find the answers as the case goes along. In most cases, it makes sense to try to resolve the dispute quickly. With an early resolution, relationships are less frayed and burdens on management are fewer.
Barry: We use mediation as a primary litigation management tool. Mediation works both as a method of resolution as well as an opportunity to understand your opponent's case. Through the process you not only gather information about the opposition's view of the facts, but also mediation helps you understand both where the other side is coming from and their theory of the case. Even if mediation does not resolve the case, it may be able to help you to narrow the scope somewhat.
DeGroote: I agree with Brackett that getting to the heart of the case as soon as possible is the key. In addition, we usually meet very early in the case with opposing counsel to determine whether the case can be narrowed, and whether something short of full-blown litigation can be used to bring the parties together before unnecessary costs are expended.
Editor:How has technology impacted litigation management?
DeGroote: We find programs that allow a live feed of deposition transcripts over the Internet to be exceedingly helpful, as they have enabled our in-house lawyers to attend non-critical depositions remotely, which reduces travel costs and lawyer downtime. Technology also has enabled litigators to do more document production electronically but, while it may sound old-fashioned, it is important to keep in mind that there are still many instances where there is no substitute for reviewing hard copies of the documents and looking your witnesses in the eye.
Denniston: Like John, I think that technology is less of a panacea than people might suppose. For example, searching documents electronically for key words can be very helpful in discovery. The electronic search, however, is limited by the key words you choose. A manual search may reveal terms being used that were not included in your key words.
Perhaps the biggest advantage contributed by technology has been in communications. Information can now be shared any time and anywhere in less than three minutes. Another huge advantage is storage and retrieval of documents, and their display at trial.
Barry: For those of us who travel a lot, International Paper's web-based matter management system is a real advantage. It enables us to access our whole litigation file without having to carry around our paper files. We can search our electronic library from anywhere to pull down briefs, pleadings and other documents. The system also enables us to collaborate with outside counsel. International Paper's matter management system was designed by Tymetrix, and they keep improving it every couple months with new tools that make it even better.
Editor:How is your litigation team organized?
DeGroote: We are akin to a boutique firm specializing in information technology litigation. Our model is to assign an in-house trial lawyer to every matter. Even where outside counsel is retained, the in-house lawyer handles the bulk of the work in most instances. Depending on what the matter is, the role of outside counsel runs the gamut from providing periodic advice all the way to serving as the first chair.
Denniston: Our legal department is organized like the rest of our company with each business unit having a team of assigned attorneys. The litigators have a dotted line reporting relationship to our centralized group in Fairfield. Our in-house litigators are highly experienced. Many had been partners in law firms and/or state or federal prosecutors.
Barry: We recently reorganized our litigation group, with the main litigation group reporting to me here in Memphis. My group is responsible for business, commercial, personal injury, property damage and employment litigation. We have litigators assigned to business units to facilitate understanding of the business goals and creating a team approach.
As part of the reorganization and in an effort to cut our outside fees, we are bringing our single plaintiff employment litigation in house as well as a good bit of the discovery in our other cases. Our main philosophy is to do a case assessment as early as possible to decide whether the case should be settled or defended and therefore avoid incurring unnecessary attorneys' fees.
To develop metrics to validate what we are doing, we are relying heavily on our Tymetrix e-billing system. Using this tool we can demonstrate what we are saving by doing the work internally.
Editor: Do you encourage the attorneys on your team to do pro bono work?
Barry: Yes. It gives corporate counsel the opportunity to do something that is a little out of the ordinary and helps them to be more innovative. It keeps their skill set sharp, as well as being a good thing for the community. There is a huge need and more corporations have been joining the pro bono effort. It is a trend that I hope will continue to grow.
I am on the Board of Directors for the Memphis Area Legal Services. We started a program for in-house lawyers training them to do no contest divorce work. Organizations such as Corporate Pro Bono.org and the Pro Bono Partnership in the New York area make it easy for corporate counsel to become involved. They offer opportunities outside the traditional pro bono options in areas that are comfortable for in-house counsel. There is a lot of pro bono work that can be done for nonprofits that is within the normal in-house lawyer's skill set.
Editor: Do you look for law firms that do pro bono work and have a diverse workforce?
Barry: When we send an RFP to law firms, we are very interested in their diversity programs and we want a diverse team representing International Paper. While we have not extended our formal requirements to pro bono, I think the day is coming when it will play a part. All the law firms we do business with keep me informed about what they are doing in the pro bono arena.
Denniston: As well as looking closely at a law firm's diversity programs, we look at how our work is being handled. We expect diversity not only in the firms but also in the staffing assigned to our cases.
DeGroote: Diversity is important to us, as it should be to any company. I can't imagine working with a firm that does not share that view.
Editor: What is the key for successful relationships between in-house counsel and their law firms?
DeGroote: The right mindset is critical to success. This means working as a partnership and taking a long-term view. Three examples come to mind: McKool Smith in Dallas, McGuireWoods here in Virginia and Skadden Arps in Washington, DC.
Denniston: The key is to work in close collaboration. The in-house lawyer should not just pitch a file to the law firm. A successful relationship requires working together in drafting pleadings, preparing arguments, appearing in court and all other aspects of the case.
To control costs, in-house counsel must understand how the case is being staffed. I recommend looking closely at paralegal costs because I think they do not have to be as expensive as they have been.
It is also important to drive deals with your firms. We use preferred firms and legal service providers. They are the best in the business, and we negotiate economic incentives with them to achieve cost efficiencies.
Barry: We require a budget from our outside counsel and monitor it very closely as the case progresses. We also require that outside counsel do an early case assessment to guarantee that the strategy is aligned with our company's business goals. We strive to have a collaborative relationship with the outside firms we use to ensure that the litigation progresses as we intend and that it proceeds in an economical fashion.
Published January 1, 2004.