Canadian Lawyer InHouse

budgets to clients but often the in-house lawyer would receive an invoice and it was difficult to allocate invoiced items to the budget. "There might be four different docket entries all lumped into one hour, or they code things inconsistently," says Gutelius. RBC insists firms use the standardized Uniform Task Based Management System codes and reduced the number of codes firms can use. For each phase of litigation they are budgeting to, they can only use one code. RBC did this because it holds the belief it would never get all outside counsel to accurately use all the UTBMS codes. "So when we get an invoice and it says X hours on discovery, whether it's witness prep or document review, it has the same code so we know how they are doing against the budget. It makes a big difference in trying to manage the expense," he says. From the law firm's perspective, it's been an evolution many litigators have come to expect from their clients. "I think all of these things are good," says Lonsdale. "We do budgets and more thinking about how to plan out the case, talking about the strategic options and strategy about budgeting. I'm also doing a lot of reporting to budget." Lonsdale concedes that complex litigation files are large line items that businesses need to plan for and they need to have a solid understanding of the timing of the expenses. "We have to understand how we can best manage litigation for them and be efficient and outsource some labour-intensive processes when we can," says Lonsdale. "Clients want us to say what is the best way to do this and yes, they don't just want to focus on the hourly rate, they don't just want to focus on the staffing profile — those are components of the conversation but a good outcome has to be broader than that in terms of the discussion." Risk-sharing arrangements like the one RBC arrived at — sometimes referred to as a "cap and collar" — are starting to emerge more often, says Jeremy Devereux, a partner with Norton Rose Canada LLP. "We are seeing these arrangements where if you quote the price for the given stage of the litigation and then go over that you only get 50 per cent of your fees for what you go over — there's a pretty big incentive. If you get under, you get 50 per cent of the difference and that's been used in the States more often but it's coming into play here." i'm in the camp of people that say that until the companies with the large spend actually walk the walk there's not all that much incentive for firms to change their model. PeTer GUTeLiUs, rBC Devereux says it's not common in his practice, but it is something he has heard is being proposed more often. "For the simple reason that you can push lawyers on rates but pushing people on rates didn't necessarily drive efficiency and inhouse counsel came to recognize that and said, 'What we need to do is something that is going to provide an incentive to our lawyers to be more efficient,'" he says. Gutelius offers this advice to those who want to take on a creative strategy towards incentives, budgeting, and overall litigation planning: "Anybody contemplating doing this has to have the support internally. If your GC is not on board or business partners, especially in smaller organizations, that could be a problem. And if you're not prepared to work with your outside counsel to create the efficiencies it won't work." Case planning and preliminary strategy discussions have definitely become more involved, says Jim Sullivan, a litigation lawyer with Blake Cassels & Graydon LLP in Vancouver. Sullivan's work is largely head office litigation for large corporations. He's been doing major commercial and class action cases for the last decade and has seen the approach in We Bennett J. hadBENNETT J. from a spark right the beginning. 1/4 page .25 Untitled-4 1 Your lawyer. Your law firm. Your business advisor. w w w. c a n a d i a n law y er m a g . c o m / i n h o u s e june 13-02-26 10:25 AM 2013 • 23

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