Law Practice Management
DuPont Shifts From BigLaw Model, Hires More Smaller Firms
Posted Apr 6, 2009 6:51 PM CST
By Martha Neil
Not that long ago, the in-house legal department at DuPont Co. was implementing an efficiency strategy concerning outside counsel that called for the corporation to use a smaller number of large global law firms.
But now, DuPont—which is viewed by other corporations as a bellwether on legal cost-cutting—is reversing course, at least to some extent, and looking to retain a larger number of smaller law firms, according to Bloomberg.
Partners at firms of no more than 300 attorneys often charge less than major BigLaw competitors, the news agency notes in a lengthy article about the revised DuPont Legal Model. Plus, DuPont is pushing for fixed fees and discounted rates.
“At a time when general counsel are looking for alternative billing arrangements, the playing field has been leveled, so smaller firms can make pitches to big clients that would have fallen on deaf ears before,” says DuPont's general counsel, Thomas Sager, in an interview with the news agency.
Related coverage:
ABAJournal.com: "Some Lawyers are Reducing Fees as Corporations Seek Discounts"
ABAJournal.com: "‘Convergence’ Can Benefit Law Firms as Well as Corporate Clients"
ABAJournal.com: "In-House DuPont Lawyers Post Profit"
DuPont Legal (archived): "The DuPont Legal Model Leaps Ahead"
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Comments
B. McLeod
Apr 6, 2009 7:15 PM CST
Wether: a male sheep castrated before sexual maturity ; also : a castrated male goat (per Merriam Webster). A good old word of 12th Century vintage. Once you have a wether, you then pretty much have to hang a bell on it to get the rest of the flock to follow it, hence, “bellwether.” Good for you, DuPont (but I hope I am never so regarded by my colleagues).
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Debra Veoli
Apr 7, 2009 5:42 AM CST
Thank God my firm does NOT do any work for Doupont. We bill VERY fairly, and do not get complaints.
Why is it that companies are so picky, because we are getting there work done for them?
Nowadays, I guess it’s fashionable to nickel and dime us, but it’s getting very boring to read about these guys trying to sound as if THEY just figured it out. They are not original, no way.
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In House Twerp
Apr 7, 2009 8:39 AM CST
DV, the feeling is mutual. First you learn to spell the client’s name, then you fix your spelling and grammar, then you pitch for the work.
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In house - General Counsel
Apr 7, 2009 10:13 AM CST
I don’t tend to respond to any of the comments I read on this web site (though I enjoy reading them as a break from real work) but I feel compelled to respond to Ms. Veoli’s comment. Companies “are so picky” because they are paying upward of $400 an hour for you to be responsive, responsible, through and detail oriented. We are looking for counsel who not only know how to “bill fairly” (as it is the ethical thing to do) - but to assist us in our business - that takes more than billing by the hour. I don’t believe requiring outside counsel to be effecient is “nickel and diming” you. If your firm does, please remind me to delete such firm from our roster of approved counsel.
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Thomo
Apr 7, 2009 12:48 PM CST
Some lawyers charge for results, some just charge for their time. Not too many gripes about the pay-for-results model of billing.
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beth
Apr 10, 2009 2:06 AM CST
Fixed fees make sense for many types of assignments. Hopefully, this model will spread. Our profession has been undermined by the focus on the billable hour.
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Ethan S. Burger
Apr 10, 2009 5:39 AM CST
Generally, the larger any organization becomes, the less accountable its management is for its performance, the more difficult it is to ensure quality control and effective-risk management, and the less responsive it is to clients’ needs. Frequently, law firms “over lawyer” matters that are not particularly complex and assign lawyers to projects to keep them busy, irrespective of their expertise.
Dupont’s new approach reflects economic conditions. Just as Wallmart dictates sales terms to its supplies, it makes sense that consumers of legal servies asserts control over the entities they hire.
It has always been my view that law firms should remain below 150 lawyers in general and avoid the establishment of new offices (especially abroad) as it complicates law firm management tasks and often reduces quality unless it is opening an office to be nearer existing clients—which is less important in todays high-tech environment.
The value of legal services are determined in the marketplace. The users of legal services do not need the “prestige” of using large well-established law firms with fancy offices. Rather users of legal services need competent and responsive attorneys whose costs are reasonable. The higher the overhead of the law firm, it is usually less likely that the client gets the legal product and advice it needs at a low price.
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New name same posts
Apr 10, 2009 6:37 AM CST
I think we have a new “Ellen Barshevsky”. Isn’t that right “Debra Veoli”? Even using the RANDOM caps and everything.
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InHs
Apr 10, 2009 6:41 AM CST
I’m in house and view biglaw as a last resort - basically only for those very large jobs/transactions where you really need a lot of bodies. For everything else, a smaller to medium sized firm does better work for a lower price - using biglaw for this kind of work is nothing but a giant waste of money.
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Bill Dugan
Apr 10, 2009 6:50 AM CST
Ellen Barshevsky—we love you, whereever you are! Debra Veoli you are not as charming.
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B. McLeod
Apr 10, 2009 7:13 AM CST
DV and AV are probably close friends of EB.
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B. McLeod
Apr 10, 2009 7:15 AM CST
PS - Perhaps as a “Peeps offering,” EB submitted “GRASS Ceiling” for the Peeps gallery.
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Bird Smack
Apr 10, 2009 7:29 AM CST
I don’t like getting nickel-and-dimed either, Debra. To avoid it, I do good work at a fair rate and don’t complain about my clients.
I have also learned to spell and use grammar properly (for the most part).
BigLaw (which occasionally breeds high-maintenance whiners like Debra) Rules!!!
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J. Bloom
Apr 10, 2009 7:48 AM CST
I would like to examine the daily billing records for all of you who have the time to read and respond to these comments. It might be interesting to find out who is paying for this good use of time.
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Pete Clarke
Apr 10, 2009 8:07 AM CST
Despite the snide comment, I hope there is some Love in Bloom.
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Another in house
Apr 10, 2009 8:09 AM CST
All very interesting. By the way, I’m off today because of Good Friday. I noted the grammar and spelling in Debra’s comment as well. After reading other comments I decided to find out who Debra Veoli is and did a Google. I found mostly posts on other blogs, some about how to avoid using the #4 train to get to a particular restaurant and that we shouldn’t eat hamburgers because they are too messy. I wondered the same thing as J. Bloom. Is she spending her day bloging and charging the client? But the spelling and grammar are really the things that caught my eye, Debra. Be that sloppy in a brief and an educated judge will think a lot less of your argument.
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Raleigh
Apr 10, 2009 8:12 AM CST
The undiscovered country is small firms; we charge half as much, pay twice as much attention because of the value of a large client to a small firm, and our legal work is neither better nor worse because there are a hundred other bodies in the building
and J. Bloom, the only reason I still read these is the laugh I used to get from Ellen Barshevsky. Its clear that everyone misses Ellen, what happened to her? Maybe we will hear from our infamous boyfriend?!
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Another in house
Apr 10, 2009 8:20 AM CST
Releigh reminds me that we have been distracted by Debra. I will echo Raleigh’s comments. I worked in a small firm and fought battles in court with BigLaw on a fairly regular basis and usually won. The facts of the case and the capabilities of the attorney are the important factors. When it comes down to it, the small firm appreciates the business from a large client and work hard to retain that business.
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HVB
Apr 10, 2009 8:34 AM CST
Re: spelling and grammar
Some of the grammar in the posts, generally, is atrocious. Usage flaws abound (“waist” for “waste”; “it’s” for “its”). Those deserve reproach. However, many of the spelling and typing mistakes are a function of this ridiculous small and light gray font on a white background, so let’s have a truce for the obvious ones. Like “Releigh.”
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Bill Dugan
Apr 10, 2009 8:47 AM CST
Raleigh, Ellen was banished from the website by the editors. Now all we get are 2 bit whiners like the Veoli twins, at best tawdry imitations of the real McCoy.
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Sembance
Apr 10, 2009 9:04 AM CST
As in-house counsel in a large corporation, who used to work at a BigLaw firm, I am appalled when I see the bills we get. Having “been there” and seen some real shenanigans, I know we are getting charged far more than than the actual work being done. I would be very happy if my own company followed this “bellweather” or, even better, kept more work in-house. Contrary to popular belief, we have the time and skills to do it.
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Small firm lawyer
Apr 10, 2009 9:15 AM CST
As a member of a 40 person law firm, I have no problem with client expectations that I be efficient and fair in billing. I would expect the same if I hired an attorney. In addition, small firms can and often do provide as high a level of representation as mega-firms, at a tremendously lower cost to the client.
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AD
Apr 10, 2009 9:37 AM CST
I am a 57 year solo practitioner. I have litigated against BilLaw firms and have found them unimpressive. I have had BigLaw representing same side parties as I and have seen their billings. I bill fairly and make a decent living. I am appalled by what BigLaw bills for the same hour as I and that includes a partner and an associate for the same hour. Quality and not quantity should rule.
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ETA
Apr 10, 2009 10:06 AM CST
In 30-plus years as General counsel of well-known corporations, I never found BigLaw to be as efficient or dedicated as MediumLaw or SmallLaw. I agree BigLaw may be necessary for handling of giant cases (and disgustingly overpriced). In my experience, BigLaw spends a lot of time and effort convincing the CEO and directors that they should overrule my choices of firms.
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EarnestT
Apr 10, 2009 10:13 AM CST
Its about time that corporate America realizes that small firms do exceptional work at a reasonable cost. The premier litigators in this country are predominantly found in small firms.
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Cunyon in Chicago
Apr 10, 2009 12:57 PM CST
To #21, who is now in-house but was once at BigLaw: You say that you’ve “been there” but do not say whether you’ve “done that,” by which I mean the shenanigans that resulted in charging for more than the firm did. May we assume that you stood up to management and refused to engage in the shenanigans. Based on your tone, I know that you confronted them, threatened to report the wrongdoing to the disciplinary commission and immediately packed your bags and marched right out the door. Your integrity is worth more than a fat paycheck. Yeah!
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Allen Shepherd
Apr 10, 2009 1:59 PM CST
I work in house. I know the out-house lawyers charge alot. But we can’t do the work inhouse so we go outhouse. What iare we to do if it’s expensive? Do it oursevves?
We can’t do it.
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Jim S
Apr 10, 2009 2:49 PM CST
The so-called “Big Firm” model could not be sustained over the long term in any economy, let alone the current crisis. It is amazing how cavalier outside counsel are to the amount of their bills. Money that goes to lawyers could drop to the bottom line and improve the over-all performance of a company. When the GC’s indicate concern, these firms claim they are being “nickel[ed] and dime[d]” Try running a business before you start talking about costs. As the hourly rates and minimum billing increase, consumers will look for alternatives. Savings that one might expect from the consolidation of large firms is not being passed on to the consumers and average hourly rates among large firms have continued to increase. This creates a great market opportunity for talented, small firms.
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First poster
Apr 10, 2009 2:56 PM CST
#27 apparently you can’t do it yourself based on your spelling.
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B. McLeod
Apr 10, 2009 5:14 PM CST
Obviously, # 27 does not work at DuPont, and, as they say, “If you’re not the castrated lead sheep, the view never changes.”
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Kalifornia Arnold
Apr 11, 2009 1:55 PM CST
DuPont complaining about ethics violations, being treated fairly, and over billing harming people? Excuse me if I’m wrong, but isn’t this the same company that manufactured AGENT ORANGE? Of course they have made amends to our servicemen who were the receipients of their wonderful chemical expertise.
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Kalifornia Arnold
Apr 11, 2009 1:57 PM CST
And servicewomen (excuse me)
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Al Veoli
Apr 12, 2009 6:23 AM CST
It was Dow Chemical Company, Kalifornia Arnold. You were close, but get your “D"s Straight, man!
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RaveOnJohnDonne
Apr 12, 2009 5:34 PM CST
This legal catastrophe is all Bush’s fault. Maybe Obama will fix everything with his new programs.
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yeah, right!
Apr 14, 2009 11:47 AM CST
I have personal knowledge of what goes on at DuPont, and they speak out of both sides of their mouths. For large transactional matters, the company routinely hires BIGLAW firms like Skadden. The company uses Crowell and Moring for commercial matters a lot The company hires a lot of small law firms for more routine matters, and only calls when and if they want to. You can bet that on most occasions, a NY BIGLAW firm will represent DuPont on a big deal (and even some smaller ones). Doesn’t this contradict all of this smallaw talk? In reality, DuPont uses small firms only sparingly and only for small, not high paying work. Oh, and they DON’T like to pay lawyers, either.
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