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The army of law firms once used by Microsoft Corp. is now just a platoon. The huge software company is evaluating the more than 100 firms it turns to for legal help. So far, 20 of those firms have made it to Microsoft’s “preferred provider” list. That’s good news for the chosen 20, which includes such firms as Arnold & Porter, Covington & Burling, Fish & Richardson and Sidley Austin Brown & Wood. But any sigh of relief that the listed firms let out was probably cut short when they heard the catch. Firms would have to renegotiate their billing structures as well as provide detailed data on diversity and staffing, according to new uniform guidelines established by Microsoft. The company also imposed a rate freeze until the program is finalized sometime toward the end of the year. “We needed to find ways to control the cost of litigation and at the same time consolidate our work with firms who did the best work for us,” says Thomas Burt, who heads up litigation for Microsoft. He declines to give specifics but says costs have been increasing across all litigation areas, particularly in the patent and antitrust arenas. Microsoft is currently involved in about 35 active patent cases. Kevin Harrang, a deputy general counsel at Microsoft, describes the company’s recent spending on legal matters as the equivalent of a “wartime budget.” Microsoft began making its abbreviated law firm list more than a year ago, and it’s still a work in progress. Although only preferred providers will get work from Microsoft, local counsel will still be chosen on a case-by-case basis, says Burt. The list is divided into two tiers, one handling the larger volume of work and the other handling regional matters. The selection process was “largely internal,” says John Gartman, a partner at Fish & Richardson, one of the preferred providers. “We were not privy to it.” Microsoft hasn’t publicly released the list — Harrang says that will happen at the end of the 18-month selection process — but the firms mentioned in this article have confirmed they are on it. Tamara Loomis is a freelance writer in New York who contributes to various ALM publications, including IP Law & Business magazine.

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