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Rather than immediately cutting jobs in its in-house legal department, Delta Air Lines will ask its outside counsel to cut their fees. Walter A. Brill, Delta’s vice president-associate general counsel and one of the company’s 44 in-house lawyers, says the legal department has recommended to senior executives that there be no layoffs or furloughs as part of the 13,000 jobs cuts announced Wednesday. The department instead will attempt to eliminate as much in-house and outside discretionary legal work as possible. “Our philosophy is that we can do work a lot more efficiently and less costly in-house than outside. The way we manage our costs typically is to limit our use of outside counsel,” he says. “One thing we will probably do is seek some rate reductions.” Those reductions will be spread equally among the company’s outside law firms, Brill says. They’ll be based on Delta’s relationship with each firm and the type of work. For now, the legal department won’t know if it will need to cut legal jobs until the company learns the effect of the voluntary leave programs that Delta said will be part of its plan to reduce jobs. The layoffs result from the Sept. 11 terrorist attacks that have caused thousands of would-be travelers to curtail flight plans. The airline is not expected to learn how much it will save from the voluntary leaves until mid- to late-October. ‘MANAGING THE COSTS’ Though it will request rate cuts, Brill says Delta won’t be cutting law firms from its roster: “We don’t have that many law firms, and we don’t see a need to whittle them down. It’s more a matter of just managing the costs.” Brill says that Delta, which is headquartered in Atlanta, uses a number of Atlanta area firms, including Troutman Sanders on airport and environmental matters; King & Spalding and Long Aldridge & Norman, which do transactional work; Kilpatrick Stockton on labor and employment work; Rogers & Hardin for employment and commercial litigation; and Bondurant, Mixson & Elmore for antitrust and other commercial matters. “We haven’t had any discussions with anyone about rate reduction or any specific plans,” says Kilpatrick Stockton litigation partner William H. Boice, who represents Delta. “I guess my thought is, these are difficult times and we’ll do whatever we can to help the company out.” He says his firm has handled Delta work for more than 25 years. Hunter Hughes, a partner with Rogers & Hardin who also handles work for Delta, says his firm would have no problem with a discount. “We feel fine about it, and we would be amenable to it. It’s obviously a time of crisis for the airlines, and we’re happy to assist in any way we can. In fact, we suggested it to them,” he says, explaining that within a few days of the Sept. 11 terrorist attacks, “we offered a substantial discount during the period of crisis.” Hughes, whose firm has represented Delta since about 1976, says Rogers & Hardin also offered the air carrier rate reductions in the mid-1990s, the last time Delta instituted major job cuts. Between 1994 and 1996, the company sought to cut 12,000 to 15,000 jobs as part of an effort to reduce annual costs by $2 billion, according to contemporaneous reports in The Atlanta Journal-Constitution. When Delta’s mid-1990s financial difficulties ended, Hughes says, the company approached his firm and offered to pay more. “That’s how a partnership works,” he says. “A firm could take the cut and just keep it forever, but that’s not the way Delta works.” EMPLOYEE RESPONSE Hughes, Boice and Brill all say they don’t expect to see a huge spike in labor and employment suits against Delta as a result of the job cuts. “We never know what to expect, and we don’t speculate on it, but when we had our last downturn … we did not have a rush of labor and employment suits,” says Brill, a 26-year Delta veteran. He adds that no lawyer jobs were cut in that earlier downturn. Delta has tried to minimize the impact on its employees by waiting to announce job cuts — at least five airlines preceded it — and by offering employees voluntary leave packages that include some benefits. The company also has very few unionized employees — just the pilots and two other small groups of workers, he says. Hughes says Delta did several things right in the mid-1990s that helped avoid litigation. First, it cut as many jobs as possible through voluntary programs; second, it communicated well with employees, explaining why cuts were needed, what its goals were and how it intended to reach them; and third, it kept its promises involving severance and other termination issues and benefits. Boice, though he referred specific questions about layoff-related litigation to Delta, did say his firm isn’t gearing up in anticipation of suits against the airline. “I think everybody understands that these are difficult times,” he says. “If layoffs are handled in a fair, nondiscriminatory way, you shouldn’t have any problem.” Whether or not the job cuts spawn labor and employment litigation, Brill says the in-house legal department’s already high workload is likely to rise because of many changes in the airline industry right now. “It certainly is a tough time,” he says. “But I think the mood in the law department is — I guess ‘determined’ is the way to say it. Everyone has a lot of work to do. … They really feel like they’re a part of the company.”

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