Mark Harrington is seeing more in-house lawyers showing up on files where they didn’t before, even on more complicated cases. An insurance defence lawyer for Torkin Manes LLP, Harrington is a 30-year private practice lawyer who does work for companies that don’t necessarily have in-house departments. He’s seen a range of litigation trends over the years and watched in-house departments at insurance companies rise and fall.
“I have also noticed my clients are still sending me the cases against the best plaintiff lawyers even though they have in-house departments. I see cases from Thomson Rogers, Oatley Vigmond, Mcleish Orlando — they send me those files, they don’t keep them in-house,” says Harrington.
The big complex files are still coming his way — it’s the threshold cases/commodity work “slip and falls” that law firms are losing on the personal injury side because it’s cheaper for the insurance companies to handle them in-house. “But are they getting the same quality they would from lawyers outside? I’m not so clear on that,” says a skeptical Harrington. “It’s certainly true they are taking a hardball approach.”
Harrington says it’s the way the sector is headed to keep costs down.
The trend is also impacting the lower echelon of lawyers in law firms like Torkin Manes.
“I have an entire insurance department full of young lawyers who need trial experience and taking those [smaller] files away is going to cause a further loss of my juniors’ ability to get the trial experience they so desperately need,” he says. “So I think it’s going to have a significant impact on the training of our younger professionals because they won’t get the opportunities they had before.”
In fact, litigators who were once in private practice are taking their expertise and going in-house where they can do trials on a much different platform — one that allows them time to do it without the pressure of docketing (see cover story page 20).
External firms are becoming all too aware that some of their larger clients of all kinds — not just the insurance companies — are placing more focus on addressing litigation matters and costs in-house. In resposne, many firms are deciding to embrace the opportunity to work differently with clients who are going down this path, cognizant of the fact they must also evolve and adapt.
“Most in-house departments are run by pretty savvy people who know what’s within their capacity and what should be sent out. We don’t really see them as competitors but as collaborators,” says Carolena Gordon, litigation partner at Clyde & Co in Montreal. “They want to deal with some of the business litigation themselves and use us for other things. We see it as an opportunity to get to know their business and meet in the middle and see what they need at a price that suits them and deliver services in a way that works for them.”
Because some in-house clients now have more expertise in litigation themselves, they want to be involved in talking through the pros and cons of the various strategic decisions in litigation instead of just being told what their external litigation partners think they should do.
“We’re certainly seeing the legal departments of large clients like the banks, for example, doing smaller litigation in-house,” says Catherine Beagan Flood, commercial litigation partner at Blake Cassels & Graydon LLP.
Occasionally, she says, she gets a call from a client who wants to “gut check” their approach because they have taken on something in-house that they maybe should have sent to an external firm. “We’re starting to see the scope of work done internally changing at some clients and I think that affects our work in a few ways. I do have clients call to use me as a sounding board for matters they are handling themselves. If you are the only litigator or one of a few in an in-house department, sometimes you need an external adviser to talk through difficult decision points with you or just to add some objectivity to some decisions you’re making in your own litigation.”
On larger files, Beagan Flood finds that if a client is also a litigator they will often want to be more involved in the litigation strategy at a much more granular level. “We tend to talk through the pros and cons of various options and work out the strategy in collaboration rather than me giving them a recommendation and them giving me instructions,” she says.
Taking on more litigation in-house can bring added pressure for those lawyers at companies where they have decided to support the business units in their quest to defend more actions internally.
“When you’re representing your own team, I think it’s harder to be objective about what the risks on the other side are — in part because you are representing your own business team,” says Beagan Flood. “I think one of the advantages of going to an external adviser is that they can look at the counter-arguments with more objectivity and don’t have the same personal pressures based on defending their colleagues. Some of my clients are very aware of that and will call and describe the fact scenario and say ‘Have I drunk the Kool-Aid? Or do I have as good a case as I think I do?’”
The litigation working experience with clients is developing in a number of ways to become quite different, and some firms have found that there has been opportunity for new types of work.
“We’ve seen a shift in the last 10 years and you really have to invest in the front end of a discussion about where everyone wants to go and what the options are and what are the costs,” says Gillian Scott, partner, client relations and business development litigation at Osler Hoskin & Harcourt LLP.
As part of the cost pressures clients face, Scott says, external counsel have a responsibility to sit down and do early case assessment with clients to propose how the client and external counsel might work together and map it out between them.
Osler is even helping clients who are handling large numbers of small litigation matters with process-mapping software, which has turned into a form of litigation consulting work. “We’re using our litigation expertise in non-traditional ways,” she says.
The firm has also been working on developing a program where clients with in-house litigators send them to Osler for “boot camp” sessions on skills development in areas such as how to argue a motion, conducting a cross-examination or tips for drafting a pleading, for those who may not have done litigation before or have become rusty.
The firm is also providing software tools for litigation support, for automating different parts of litigation.
“Some might say, ‘Are you not training people to eat your lunch? I’d say the answer is that the way businesses are going, if they are going to do a certain part of their litigation then we want to be able to support that and be a resource to them so that when the issues they are dealing with reach a level of complexity that they can’t deal with in-house, they will have seen us as supporting their initiatives and their needs all along and will hopefully also invest in us when they have complex litigation,” says Scott.
Gordon of Clyde & Co agrees that in helping clients manage work they have decided is in their best interest to manage in-house, they may be more likely to stay loyal and continue to hand off more complex work.
“We work with clients in a collaborative fashion,” says Gordon. “Where larger matters still go external that’s where lawyers need to get more creative in responding to those needs. There needs to be a better understanding of what client needs are.”
Clyde has a document review platform it uses with clients where clients can have access to the documents as well and leave comments.
“I have clients now where they want weekly phone conferences and then they are kept informed on progress of the case we are dealing with that week,” says Gordon.
At the end of the day, a law firm that can adapt to clients being more directly involved is the responsive law firm that will be the most successful one, says Gordon.
Clients are also getting savvy about the data they have in their systems on past litigation matters and they want to use it in the decision-making process and risk assessment process, says Gordon. “I think that is something lawyers also need to respond to — we need to look at our own data and the value of that data is an untapped resource.
“No doubt when you look at the landscape right now clients are very sophisticated and they know how much litigation costs and how much they are prepared to spend and to do it more efficiently. What they are saying is you have to jump into this dialogue and start offering different ways to get things done, not just the traditional way. They’re asking us to take on risk, get better at assessing risk — get stuff done quicker.”