ALM Properties, Inc.
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Best Legal Department 2012: Best of the Rest
In 2006 Vail Resorts Inc.'s law department had little control over its management of outside counsel. The Bloomfield, Coloradobased ski resort operator had 93 law firms on its payroll and no quality assessments or fee negotiations in place. GC Fiona Arnold knew that there had to be a better approach.
Over time, Vail Resorts cut its core roster down to just three firms. Through the reduction process, Vail got a handle on outside spending. Its law department now uses alternative fee arrangements for more than 60 percent of its billings. Excluding inconsistent real estate costs, the department spent an impressive 27 percent less in 2011 than it did the previous year.
It was a busy year for the 12-lawyer team. Vail Resorts saw unprecedented growth last year. Its acquisitions included an online ski shop and a seventh resort, Kirkwood Mountain Resort, south of Lake Tahoe. After any M&A transaction, lawyers who work on a deal take charge of the transition. Arnold said the practice ensures "that those who are analyzing the deal are also going to live with the outcome."
With growth comes additional day-to-day work for the lawyers. Two years ago, the department put a new system in place to handle a rising litigation load. Two experienced trial attorneys replaced business lawyers as litigation heads. Instead of merely overseeing cases, these lawyers partnered with an outside lawyer to handle a significant portion of the litigation. The change paid off; the department saw immediate cost savings.
With an enhanced reputation as tough litigators, Vail predicts fewer lawsuits. And that's the kind of cut that every GC is happy to see.
Initiating the first-ever virtual clinical trial is just par for the course for New Yorkbased Pfizer Inc., an innovator in the pharmaceutical world. The novel approach to testing allows researchers to recruit subjects, dispense medicine, and collect data almost entirely via the Internet and telephone.
GC Amy Schulman's legal team did a lot of behind-the-scenes work to make it happen. Members of its 336-strong law department (242 in the United States) advised clients on everything from Food and Drug Administration review to the legal implications of dispensing a drug remotely.
Other company successes have featured the law department even more prominently. Pfizer had big courtroom victories in 2011, including the defense of its Viagra patent in a federal district court in Virginia. Other favorable outcomes included dismissal of a securities class action complaint and two defense verdicts in its ongoing hormone therapy litigationbringing its MDL record to six wins and one loss.
The law department also had a productive year on the M&A front. Its transactions group worked on more than 30 deals, closing a $3.6 billion acquisition of King Pharmaceuticals Inc. and selling its Capsugel business unit for $2.4 billion.
Part of the secret to Pfizer's success is its effective use of outside counsel. Pfizer's alliance of 19 firms operate as a unified bloc and deliver better legal outcomes while saving the company money.
The law department is also planning for the future by creating opportunities for younger lawyers. There's a program that rotates first-year lawyers between Pfizer and its firms. What's not to like?
Long before Zynga Inc. launched its $1 billion initial public offering last December, the legal department was working tirelessly to get the company ready. The provider of online social games turned to its lawyers to develop a system to handle what at that time was the second-largest technology IPO in history.
GC Reginald Davis's team had a variety of tasks as they prepared to go public. Some were routine, like training employees to help them understand how going public would change what they do. But some were far from ordinary. Zynga lawyers had to explain to people at the Securities and Exchange Commission how the company would earn revenue by selling virtual goods.
Like the rest of the San Franciscobased company, Zynga's law department has grown exponentially in a few short years. What started as a one-person operation back in 2009two years after the company was foundedis now a department of 17 lawyers, 16 of whom are based in the United States.
For a small law department, Zynga's packs a punch. Its lawyers completed 13 strategic acquisitions last year and aggressively took action to protect Zynga's intellectual property rights. We were particularly impressed with the department's cost control. It actually turned a profit, thanks in part to dogged pursuit of litigation with high-value settlement potential.
The young legal team is also trying to develop good habits. Last year it organized its knowledge into databases of experts, tech terms, patent info, and more. Its lawyers focus not just on winning an immediate case, but on what they can apply to future matters. Sounds like a mature approach to us.