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Pursuing class action settlement claims isn’t the only change at the legal department of E.I. du Pont de Nemours and Company. The chemical giant is also transforming how law firms will be chosen for those claims: Starting this month, the department plans to hold e-auctions. The idea for having firms bid for cases came from Catherine Thompson, a DuPont corporate counsel who works closely with the company’s purchasing arm. This winter she suggested to DuPont litigation chief Thomas Sager that he ask outside law firms to bid electronically for some of the company’s legal work. At first, Sager hesitated, because he thought having firms bid against each other would strain the “family” relationship he tries to foster among them. But the more Sager thought about it, the more he was intrigued. Class action claims seemed the perfect test for an e-auction, says Sager. For one thing, the claims would be an entirely different source of business for DuPont’s 42 core law firms, so no firm would be at risk of losing work. He adds that every network member-indeed, only network members-will be able to bid. Here’s how it will work: The law department will craft a formal request-for-proposal, which will be posted on DuPont’s secure Web site. The lawyer in charge of the auction will set the parameters, including a bid deadline, which can be anywhere from ten minutes to several hours. The law department will notify the network firms by e-mail about any upcoming contest. The proposals will not set the fee terms explicitly, although Sager says he wants firms to take the cases on contingency or some other risk-sharing fee scheme. And an important factor will be which firm offers the lowest take in the event of a victory. Once the auction begins, firms’ identities will be anonymous but they will be able to see where their bid stands compared to other bidders. That way, firms will be able to change the terms of their offer and modify it, if they wish. If bids come in at the last minute, the auction period will be extended to allow time for contenders to counteroffer. Not everyone embraces the idea. An attorney from one of DuPont’s core firms, who requested anonymity when asked about the e-auction plan, wondered whether holding auctions was better suited to commodity work than such specialized cases as class actions. For all the emphasis auctions typically place on price, Sager says that the winning bid won’t necessarily be the one offering to take the smallest cut. Instead, the DuPont in-house lawyers will assess a handful of the top bids and consider factors such as a firm’s experience. At press time Thompson and Sager hoped to conduct the first auction by the end of June; they hadn’t yet chosen which case will be the test. And they’re taking a wait-and-see attitude about the process. “It may be a flop,” says Thompson, citing the prospect of technical glitches or lack of interest, “or we could decide it’s fantastically successful.”

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