Corporate legal departments don’t need to pay hundreds of millions in outside legal fees and have a DuPont size legal team to desire greater efficiency, Tom Sager, partner at Ballard Spahr LLP and former general counsel at DuPont, shared this insight during an Association of Corporate Counsel (ACC) webinar on the topic.
According to Mr. Sager, in 1992 during his tenure at DuPont, the company was in the midst of what he referred to as a “tort tsunami” which became the precipitous for developing the DuPont Legal Model, widely lauded as the go-to playbook for achieving best practices in corporate legal efficiency.
“We were trying and losing 12 cases a year and senior leaders were not happy with how we were conducting business,” said Mr. Sager of the situation.
The first step in DuPont’s path to greater efficiency, he said, was to streamline the company’s outside panel of law firms. At the time, DuPont was working with well north of 300 outside firms, which was overwhelming to manage.
“We weren’t meeting the needs of the firms because we had too many,” he said.
In addition to streamlining its panel of outside firms, the DuPont legal team took the time to clearly define its vision for partnering successfully with outside counsel which centered on some of the following key goals:
- Strategic Partnering on Alternative Fee Arrangements (AFAs)
- Greater Efficiency and Results
- Technology to Drive Collaboration
- Hiring Retention and Diversity
The process took three and a half years to implement and was not an easy one, said Mr. Sager, but once the DuPont legal department clearly defined its vision, things started coming into place. In other words, the legal team began partnering only with those firms who shared their similar vision.
“It was painful and expensive,” Mr. Sager said of the law firm vetting process, but it became the foundational piece in developing what is known today as the DuPont Legal Model, defined as:
A framework within which the company’s in-house counsel and external providers have clearly defined roles and both understand our business objectives.
3 Takeaways the DuPont Strategy
The DuPont Legal Model is celebrated for many reasons, perhaps most notable—the legal team’s savings of more than $170 million in outside legal fees and whittling a one-time gargantuan panel of 360 outside law firms to just 38. No small feat. However deep, expensive and complex the journey, as Mr. Sager recalled it, three important business lessons emerged:
- Invest in a Dedicated Network of Providers. By investing in a smaller pool of outside firms who shared their vision and in using technology to work more collaboratively together, the DuPont legal team was able to secure greater accountability and investment from their law firm partners. In other words, the more they invested in a smaller pool of firms, who shared their similar goals, the better and more dedicated those firms were to serving their business. The strategy ultimately helped the DuPont legal team grow their business.
- Consider Alternative Staffing. By identifying and putting capable paralegals in charge of leading various practice areas, throughout the process, the DuPont legal team was able to save millions. Not to mention, empowering talented professionals to take a greater stake in the business. As a result, paralegal utilization at DuPont broadened and deepened.
- Use Accomplishments as a Performance Guide. By keeping track of outside counsel accomplishments, the DuPont legal team was able to better manage firms with a sense of entitlement and celebrate those who provided exceptional service to the business. This helped DuPont’s legal team make business decisions based on work outcomes and clearly identify which firms were most committed to advancing the business.
Today Mr. Sager serves on the flip side of the house as Partner at Ballard Spahr LLP.
“I didn’t realize how competitive the market is, joked Mr. Sager, which is both fun and challenging.”
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