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When Michael Eng arrived at his new job in December 1997 as associate general counsel in charge of litigation for New York City-based Dime Bancorp Inc., he was faced with a dilemma that would take up much of his time his first year on the job. The bank was a party in “a couple hundred pieces of litigation” at the time, he said, with an unwieldy more than 100 litigation counsel representing Dime. “It did not appear to me that many of these law firms knew the bank’s business, philosophy, culture, people, much less my own philosophy on how to litigate these cases,” said Eng, explaining that outside counsel would spend too much money preparing for litigation without properly assessing the bank’s costs if the case went through lengthy discovery and possibly trial. So Eng, aware from his previous in-house experience at Ernst & Young and Long Island Utility Co. that this current situation would not work, set out to fix it. He spent months calling all the firm’s 100 or so outside counsel and then visited as many of them as he could from his Long Island, N.Y., office. Then he began a severe weeding-out process with a detailed request for proposals (RFP). In describing the types of litigation that the firm was involved in — check and Uniform Commercial Code-related from its Dime retail banking division and mortgage-related from its subsidiary North American Mortgage Co. — Eng stressed the importance of being creative when discussing fees. Forty firms responded to the RFP, and 10 to 12 were interviewed. The process came to an end in the winter of 1998 when Eng and his colleagues at Dime selected six firms to handle the bank’s litigation. The six included three that had worked for the bank previously — White Plains, N.Y.’s Jackson Lewis Schnitzler & Krupman as national employment counsel; and New York’s Cullen & Dykman and Somerville, N.J.’s Norris, McLaughlin & Marcus for retail banking and general litigation. The three new firms were Pittsburgh-based Kirkpatrick & Lockhart for national mortgage banking and class action litigation; Uniondale, N.Y.’s Rifkin Radler for general litigation; and New York’s Satterlee Stephens Burke & Burke for retail banking and general litigation. These six firms were selected, Eng explained, because they “offered high-quality legal representation at extremely economical rates.” All six firms are still the bank’s chief outside litigation firms. James Ryan, the lead partner for Dime Bank at 120-lawyer Cullen & Dykman, said Eng’s RFP approach a few years ago stood out because of its detailed request for alternative fee structures for different types of cases. “He was certainly one of the first, if not the first, I’ve dealt with on this,” he said, adding that the detailed request is more commonplace now. Eng’s approach to outside counsel is also unusual, said Scott Baken, Dime’s lead attorney at Jackson Lewis, because of Eng’s close participation in settlement discussions. “He presents himself as the bottom line in negotiations, and that’s unusual,” said Baken, adding that he thinks Eng’s experience as a litigator before going in-house helps him understand cases. Eng would not discuss the details of the billing arrangements Dime has with the six firms, but he said they fall into three categories: a volume discount, meaning the more work the firm gets annually, the less it charges; a flat hybrid rate, a balance between an associate’s and a partner’s rate for all work done; and a single discounted hourly rate, charged by all attorneys at the firm — partners and associates. He estimates that the 7,400-employee, $25 billion company, by working with the six law firms, has saved several hundred thousand dollars annually in attorney fees in the last few years and at least that amount every year in reduced settlements.

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