Each week, Bulletproof Blog features exclusive interviews with thought leaders on issues of critical importance to companies and countries.
This week, with current economic conditions forcing corporate law departments to fundamentally change their approaches to legal services outsourcing, we talk to Skip Miller, a Partner in the law firm of Miller Barondess, LLP in Los Angeles, to discuss how law firms can best conform to meet the evolving needs of corporate clients.
With more than 38 years of experience, Mr. Miller is an accomplished litigator and top trial lawyer who has tried cases in state and federal courts throughout California and around the country, and has argued appeals in both state and federal courts. As a top attorney who is implementing creative solutions to meet the needs of ever-more vigilant clients, he shared his insights with Bulletproof™:
In these tough economic times, are you seeing changes in the ways that corporate law departments make their buying decisions? If so, what’s driving those changes and how is the legal services landscape changing as a result?
Skip Miller: I’ve noticed that corporate counsels are keeping a closer eye on their litigators. Since many legal budgets have been cut, corporate law departments are being much more hands-on when it comes to the staffing of their lawsuits. They don’t want eight attorneys billing on their case if three are adequate.
Corporate law departments are also following case details more closely to see that the case is on track. We recently handled a case where the opposing party let their litigators run wild with a bad claim – and they ended up dismissing the case on the eve of trial with prejudice. Since our client had incurred substantial fees in defending the case, we filed suit to recoup attorneys’ fees. That company likely spent more than a million dollars in unnecessary legal fees.
I would encourage all general counsels to be very hands-on with their cases and have open and constant communication with their litigators. We discuss expectations up front and throughout the case with our clients and ensure that all cases are managed tightly and staffed leanly.
Recently, there’s been much discussion about alternative billing in the legal services industry. Do you see major changes on the horizon with respect to how law firms bill their corporate clients?
Skip Miller: I have already seen a difference in requests for alternative billing arrangements and I expect these changes to continue. We understand that many of our clients have taken financial hits during the downturn and we are doing our part with creative billing arrangements to accommodate them. We are doing more contingency work, some full contingency work, and some partial contingency work with blended rates. We’ve also started doing blended hourly partner rates, blended associate rates, and blended rates for all attorneys. We’ve even done flat fees with a smaller contingency amount.
At the end of the day, we have strong relationships with our clients and are motivated to work out a deal that is mutually beneficial. Our client relationships are more like partnerships. We collaborate to get good results.
What are some of the major misconceptions about boutique law firms?
Skip Miller: The biggest misconception is that they are not equipped to handle big cases. Many bigger firms staff their cases with more lawyers than they really need, thus making bills higher. But the truth of the matter is that cases are run more tightly and efficiently if you can keep the number of attorneys low. This also causes bills to be lower, which our clients appreciate – especially in these economic times. And in the majority of our cases, the big, well-known firms are our adversaries. We frequently have two or three attorneys on our side battling against six or eight on the other side, and we still win. The number of attorneys isn’t what gets results; it’s creative legal strategy and team work.
Another misconception is that with a small firm, you may not be getting the same caliber of attorney. This may be true of some small firms, but certainly not all of them. Our attorneys come from and have been trained at top firms and have graduated from top law schools. Our attorneys feel a sense of ownership in Miller Barondess – and I think that motivates them to work harder and provide better client service. I’m very impressed with the level of intellect of our lawyers and have never worked with such a smart, motivated, cohesive team in all of my thirty-eight plus years of practicing law.
In your estimation, what developments are likely to create the most significant corporate legal exposures in the coming months and years? Are there issues emerging that all corporate law departments need to be aware of?
Skip Miller: We’ve seen major fallout from the credit crisis, and a good amount of our current cases have resulted from the economic downturn. We have been successful in representing clients that have had their businesses destroyed because of financiers pulling the rug out from underneath them at the eleventh hour. We’re also seeing the courts respond differently in dealing with the covenants required for foreclosures due to the economic changes, especially in the area of real estate.
For example, we represented a large Southern California-based developer with an 82 condominium unit project. The loan agreement on the project allowed the lender to foreclose on the property if a certain number of condominium units were not sold at minimum prices. No units were sold and the lender sought to foreclose on the property and take the developer’s interest. We filed for a preliminary injunction on behalf of the developer because the credit crisis made getting mortgages and selling units at the minimum prices impossible and frustrated the purpose of the loan agreement. The injunction was granted, blocking the foreclosure sale, and the order included a quote from Alan Greenspan who said in testimony before Congress that “We are in the midst of a once-in-a-century credit tsunami.” This case allows real estate developers to assert the equitable doctrines of impossibility and frustration of purpose to prevent lenders from foreclosing on real estate projects in light of the economic crisis.