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The army of law firms once used by Microsoft Corp. is now just a platoon. The Redmond, Wash.-based company is evaluating the more than 100 firms it turns to for legal help. So far, 20 are on its “preferred provider” list. That’s good news for the chosen 20 — which in the IP litigation realm includes Arnold & Porter, Covington & Burling, Fish & Richardson, Klarquist Sparkman, Sidley Austin Brown & Wood, and Woodcock Washburn. 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 structure, 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. Details of the arrangements are confidential, said Thomas Burt, Microsoft’s head of litigation. “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,” Burt said. He declined to give specifics, but said 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, the Microsoft deputy general counsel in charge of the program, describes the company’s recent spending on legal matters as the equivalent of a “wartime budget.” A WORK IN PROGRESS Microsoft began making its list last spring, 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, Burt said. 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,” said John Gartman, a partner at preferred provider Fish & Richardson. “We were not privy to it.” Microsoft hasn’t publicly released the list — Harrang said it plans to at the end of the 18-month process — but the six firms listed above have confirmed that they are on it. These same firms were named by Microsoft as its primary IP litigation counsel in a survey IP Law & Business conducted last year. With the exception of Portland, Ore., IP boutique Klarquist Sparkman and Covington & Burling, none of the firms had appeared in the IPLB survey the previous four years. All six are handling big IP cases for Microsoft.

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