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Kia Motors Drives Technology Test for Outside Counsel
Law Technology News
Note: This story has been updated with new information from D. Casey Flaherty.
Is your firm in a beauty contest for work for Kia Motors? To get and keep the work, you'll want to quickly identify your sharpest associates, and be prepared for them to fail a four-part audit of their technology skills. At a Thursday afternoon panel at the second annual E-Discovery Institute's 2012 Leadership Summit, held at the Ft. Lauderdale, Fla., Ritz Carlton, a lively and very interactive panel and audience discussed the hiring tactics, which no doubt send more chills down Big Law than the scariest Halloween costume.
D. Casey Flaherty, corporate counsel at Kia Motors, was scheduled to participate at the panel that was framed around his company's screening program, but had a last-minute scheduling conflict and could not attend the conference. But the other presenters did an excellent job explaining the concepts, including moderator Shannon Spangler, a Kansas City, Mo.-based attorney and consultant, who previously was vice president and associate general counsel at Altria Client Services Inc. and a partner at Shook, Hardy & Bacon; Farrah Pepper, executive discovery counsel at GE Corp. in New York, previously of counsel at Gibson, Dunn & Crutcher; Chicago-based Jason Fliegel, director and senior counsel, e-discovery and records management at Abbot Laboratories, and previously an attorney at Mayer Brown; and Memphis-based Edward Efkeman, senior counsel at FedEx Corp., and previously an attorney at Richards McGettigan Reilly & West.
Like most of the panelists at the two-day conference, all gave the de rigueur disclaimer that they were speaking as individuals, and not on behalf of their employers, at the hour-long panel, "Auditing Outside Counsel's Efficiency: Methods by In-House Counsel to Securing Compliance With Ethics Guidelines."
In August, the American Bar Association added calories to its Model Rules of Professional Conduct's language requiring lawyers to understand and embrace legal technology tools to best serve their clients. The Kia Motors audit program puts this concept to a literal test, to assess how cost-effective its outside counsel are in handling basic, frequently recurring billable tasks. The four-part audit measures how well the firm leverages technology, such as Microsoft's Office tools. Flaherty said he conducts the audit with the outside counsel he retains and supervises. "It is not an official Kia practice," he told LTN Monday.
The firm's sacrificial lamb associate is asked to perform four mock tasks, and Kia Motors evaluates her or his performance.
Examples of mock activities:
The test is designed to evaluate, among other skills:
Ready to grab the Maalox? Guess how many of the nine firms that have participated so far have passed the test with flying colors? None. What does that mean for the firms? They may still be in the running for the work, but they may face requirements to implement "best" technology practices, or at least get to "better." And they may have to agree to an across-the-board reduction of their expected fees. The panelists summed it up: Companies like Kia Motors don't want to pay for the time it would take lawyers to learn how to use basic technology tools such as Microsoft Office's Excel or Word; they want lawyers to already have these skills.
Flaherty declined to identify the firms that have taken the plunge. "I will say that two are ranked in the AmLaw Top 10 (gross revenue), and six are in the AmLaw 100," he said. "The only one of the nine outside the AmLaw 200 was by far the best," he noted.
The panelists stressed that the idea was not to send a key associate to the unemployment line, but rather to help the firm identify areas where productivity could be improved. Granted, the concept gives new meaning to the sports adage, "Take one for the team."
GE's Pepper expressed the palpable group empathy and angst about the pressure put on the selected associate: "Can you imagine the conversation after the associate fails?" Efkeman, noting that FedEx handles all litigation in-house, chimed in "and when they ask for a 15 percent reduction."
Pepper observed that "by and large, the largest firms are not training [associates in technology]. "Maybe what corporations should be asking for is a mandated training course for firms working on their case."
Fliegel, of Abbot Laboratories, observed that these sorts of audits can help firms and their corporate clients decide on cost-savings policies, such as bringing in contract lawyers or managed services for document review, instead of using associates; and setting up "preferred" law firm and vendor programs. "Build relationships, so you are not starting from scratch every time," he counseled. Those relationships also make it easier to "push back" when necessary.
"Corporations need to take control of their lawsuits," proclaimed FedEx's Efkeman, which led to an audience member suggesting that "law firms should know their strengths, and how they will staff a case." And when staffing those cases, said Fliegel, firms should know the strength of their associates' skills in brief writing, motions, etc.
GE's Pepper cited the increasing popularity of alternative fee arrangements, where "you shift the burden efficiency becomes the problem of the people doing the work," and value becomes a dominant factor, "not just the lowest price."
Another audience member noted that many firms are now creating e-discovery counsel (see, "True Grit," February LTN.) New time codes, and updated e-discovery rules, are also changing the terrain, said panelists and audience members.
As for adopting legal project management, legal organizations "are notoriously bad at it," but it is beginning to gain traction, said Pepper. "Project management is the key to success for most efficiencies." (See "The Eureka Moment," August LTN.)
The conference wraps up today with sessions addressing data breaches and protection; litigation risk; international issues including data transfer and privacy; information and knowledge strategy, internal investigations; diversity; legal issues with technology deployment; managing collections costs; and more.
For information about next year's event, which will be held at The Lowes Hotel in Santa Monica, Calif., visit www.edileadershipsummit.org.
This article originally appeared in Law Technology News.