Confidentiality:
Only individuals authorized by registered corporations and law firms have access to eLawForum’s website. A registered corporation can view the database of all registered law firms but cannot see the names of other registered corporations nor the Prospectuses posted by other corporations. A registered law firm may only view a Prospectus that a corporation has authorized it to view; registered law firms cannot see the names of other registered law firms or corporations.
Corporate Registration:
A corporation registers with eLawForum, without charge, by completing a short on-line registration form with basic information (e.g., corporate name, street address, web address, and telephone number). The person registering on behalf of the corporation is then sent an e-mail to validate the user’s e-mail address; the individual enters his or her user information upon returning to the site.
Law Firm Registration:
Law firms also register, without charge, by completing an on-line registration form with contact information as well as other data about the firm (e.g., location, firm size, bar memberships, and technological capability). The person registering on behalf of the law firm is then sent an e-mail to validate the user’s e-mail address; the individual enters his or her user information as well as the firm’s areas of expertise upon returning to the site. Information about the firm may be seen by registered corporations researching outside counsel. At any time after registration, the registrant can grant privileges to others in the law firm to see the Prospectus that the firm is reviewing, submit proposals, or view proposals previously submitted by the firm. In addition, the law firm may provide its diversity profile and/or participate in the Minority Corporate Counsel Association Benchmarking Survey hosted on eLawForum’s website.
The eLawForum Process™
In working with its corporate clients, eLawForum performs three roles: consultant, deal-maker and market-maker.
As a consultant, eLawForum works closely with the client to identify potential opportunities to leverage the corporation’s market power through aggregating demand for legal services. Each practice area is analyzed for aggregation opportunities.
Data Collection
The eLawForum Process begins with the collection of historical spend data. The reason is simple. Because the law firm is being asked to place its profit at risk, it is only fitting that the corporation provide its business partner with as much information as possible to evaluate the commercial risks of the joint venture. eLawForum drafts a Prospectus, which describes the objectives of the joint venture and the overall business deal. The Prospectus includes data assembled from available sources, ranging from invoices to web-based systems for tracking legal service cost (fees and expenses) and results (settlement/indemnity) amounts.
Spend Analysis
eLawForum analyzes historical spend looking for aggregation opportunities. eLawForum’s examination includes law firm fees and expenses, per case fees and expenses, total fees and expenses, indemnity averages and distributions, case shelf life, jurisdiction and practice area.
Deal Structure
After analyzing a client’s “spend” data, eLawForum focuses on aggregations with the potential for the greatest savings. eLawForum analyzes a number of different deal structures to determine the best way to realize that potential. Deal structures address the principal factors that govern profit and loss for the joint venture parties - volume, payment schedule, distribution risk, outlier risk, engagement duration, practice area, geographical coverage, and success criteria.
eLawForum deals have the same basic structure. The traditional outside counsel relationship is replaced with a joint venture. The venture’s purpose is to manage total cost. The venture recognizes the corporation’s interest in buying results rather than hours. At the same time, the venture recognizes the current market reality that the most qualified defense attorneys - unlike the plaintiff‘s bar - will not work for a 100% contingency fee. The joint venture, therefore, balances risk and certainty in law firm joint venture partnership compensation. The firm provides the certainty of a fixed fee - a proxy for its time. To align outcome incentives, the law firm partner is given the opportunity to share in any savings from improved results. The corporation continues to assume the liability risk and the legal service cost up to the amount of the fixed fee. In-house lawyers continue to focus on their role in directing outside counsel and making business judgments (e.g., whether to settle, and for how much). But in-house counsel’s role as traffic-cop on hourly billings disappears because the law firm partner assumes the risk that legal service costs exceed the fixed fee.
eLawForum competitive sourcing further ensures performance-based compensation. The law firm partner is given the opportunity to share savings from improved results. Competition drives the fixed fee down and forces the law firm to earn its profit through performance. The corporation wins upfront on the legal service cost and both parties to the joint venture win on reducing liability costs.
Proposal Analysis
After each round of a competition, eLawForum provides both quantitative and qualitative analysis of law firm proposals. While the corporation ultimately determines what firm to select for the engagement, the volume of data collected in a competition is substantial. eLawForum’s analyses permit the corporation to focus on those proposals that are most competitive in terms of both quality and price.
Fairness Opinion
The final step in the eLawForum process involves a review of the competitive process. eLawForum renders an opinion stating that the corporation has employed a methodology that resulted in the selection of cost-effective counsel. The fairness opinion shields the corporation from any allegation that the Board of Directors has permitted management to waste corporate assets. The opinion states that the duty of care has been properly exercised through the competitive sourcing of significant spending for legal services.
Having determined which legal services to aggregate, eLawForum drafts the appropriate documents to make the deal work.
Prospectus
The first document is the Prospectus. The Prospectus describes the scope and duration of the deal. It lays out what the corporation seeks in the representation. It explains the structure of the fixed fee and the results incentives. It discloses the material information the firms require to offer the most competitive proposals. Asking law firms to commit to a price upfront is analogous to selling securities - the corporation provides the history and the market sets the price.
Questionnaire
Based on the deal described in the Prospectus, eLawForum drafts a Questionnaire that seeks specific information so that proposals can be evaluated on a common set of criteria. Every eLawForum Questionnaire requires that law firm proposals:
Identify the team responsible for the engagement. The joint venture partner will ultimately be selected on the basis of the quality and experience of its lawyers. This requirement goes beyond the general reputation and brand name of the firm. The firm may not substitute lawyers without the consent of the corporation. Detail the track records of the team members in terms of relevant experience and success in particular matters. Describe the proposed strategies for accomplishing the goals of the corporation. Cost-effective representation includes use of local counsel, technology, infrastructure, communication and litigation avoidance counseling.
Data Set
To provide the information firms need to evaluate the costs and risks associated with the venture, eLawForum creates a Data Set reflecting the corporation’s past experience with matters within the scope of the engagement.
Documents
eLawForum provides additional documents that enhance the ability of the firms to evaluate the deal. Important documents might include files for cases that will be transferred to the firm, form documents and relevant coverage provisions.
Joint Venture Agreement
At the close of the competition, it is important to avoid negotiations that could compromise the savings in the fixed price deal. In consultation with the corporation, eLawForum drafts a Joint Venture Agreement that is posted on eLawForum’s website at the beginning of the competition. The winning firm and the corporation execute the Joint Venture Agreement at the conclusion of the competition.
Qualify Firms
To create a competitive market for the deal offered in the Prospectus, eLawForum works with the corporation to identify the field of qualified firms. In addition to incumbent firms, eLawForum draws on its extensive experience to propose the most highly qualified firms. Since not every invited firm will elect to participate, it is important to invite as many qualified firms as possible to establish a market price.
Proprietary Platform
eLawForum has developed a secure, robust web-based proprietary platform for conducting competitions. This enables the transfer of huge quantities of data required to make the market function efficiently. It allows communication to take place without direct contact between competing firms and the corporation. Prohibiting ex parte communications and using eLawForum as an intermediary are essential to obtaining truly competitive fixed price proposals.
Manage Competition
As the competition proceeds, eLawForum works with participating law firms to enhance the quality of the proposals. In addition to technical support, eLawForum provides timely responses to inquiries and requests for additional information about the deal, soliciting input from the corporation on substantive issues only as needed.
Sell Deal
As a market-maker, eLawForum sells the advantages of the venture to competing firms. eLawForum communicates directly with firms to encourage the most competitive proposals. Throughout the process, eLawForum identifies risks and recommends alternatives that can be priced to enable the corporation to select the most cost-effective deal.
Best Value
The traditional law firm relationship leaves the corporation entirely at risk for both legal service and liability costs. Sole-source, cost-plus (billable hour) pricing inflates legal service cost. The traditional relationship creates a conflict of interest between lawyer and client. The law firm is in the business of selling hours. This provides an incentive to increase the shelf life of a case. As discovery and motion practice drag on, liability risk and settlement costs increase.
The eLawForum process ensures that corporations obtain the most cost-effective representation. eLawForum joint ventures are designed to manage total cost - legal service cost and liability cost. Competitive-sourcing, fixed prices, results-oriented compensation maximize the corporation’s control of legal cost.
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