Unconventional Strategy

When John DeGroote, deputy general counsel for Bearing Point, Inc., looks for outside counsel to assist on a case, take it to trial, or merely to get a second set of eyeballs to assess the strategies, he does not limit himself to defense firms.

In a move that surprises some corporate counsel, and offends others, DeGroote often turns to the other side of the bar – traditional plaintiffs’ lawyers.

In one case, his company – a business systems consulting firm – defended a huge class action in the South involving multiple defendants in which a large number of customers sued for breach of contract.

While his co-defendants hired the best defense firms in the country, DeGroote took a different approach, bringing in plaintiffs’ attorney Lewis LeClair.

LeClaire was not just any trial attorney. At the time he was best known for winning the biggest plaintiffs’ verdict in the county were the suit had been filed.

Why would corporate counsel hire the winningest plaintiffs’ attorney to do defense work?

“I knew it was a case where the story was going to be very important and required someone who knew how to connect with a jury,” DeGroote explained.

To his delight, the case never got to a jury. They reached a settlement early on – sooner and cheaper than the other co-defendants.

DeGroote estimates that he currently hires plaintiffs’ attorneys in over half of his cases.

Robert Denney, a management and strategy consultant in Wayne, Pa, who advises law firms, said he has noticed that more in-house attorneys are starting to hire plaintiffs’ attorneys.

“It’s a small trend, but we see it as very interesting,” Denney said.

“From their perspective, plaintiffs’ attorneys save money and bring better expertise,” Denney said. “For the most part they are working on contingency fee, so they do the least amount of work and still win the case.”

Flexible Fees

Paul Hanly, a New York plaintiffs’ attorney, expects in-house counsel to continue to hire plaintiffs’ attorneys, who for their part are always looking for “new pastures.” His firm recently entered into a joint venture with a Chicago plaintiffs’ firm, Simmons Cooper, to provide services to corporate counsel on business-to-business litigation.

Hanly, who specializes in mass torts claims, has seen the corporate segment of his practice increase from 5 percent to 25 percent. The firms have participated in a large spectrum of corporate cases ranging from pharmaceutical benefits to commercial litigation to patent and copyright litigation.

“The two firms’ success in the area of plaintiffs’ work has enabled us to offer to in-house counsel the ability to litigate corporate cases on a much more flexible fee basis than traditional firms,” Hanly said. The two firms work on a contingency, mixed hourly/contingent fee basis, and flat rate, but not on an hourly rate, when representing a corporate plaintiff, he noted.

For defense work, it can be tricky coming up with an appropriate formula for a contingency fee.

DeGroote generally pays an hourly rate to plaintiffs’ attorneys who are performing defense work, not unlike hiring a defense firm, although he remains open to the possibility of a mixed fee or reverse contingency fee.

One way to price defense work, suggested Bill DeVasher, a plaintiffs’ attorney in Wellesley, Mass. and former in-house counsel, is to set a minimal hourly rate, but if the case results in a win (however the parties define “win”), the hourly rate gets bumped up.

In a “reverse contingency fee,” the company defines the amount it is willing to settle for, and if the lawyer isn’t able to get the plaintiff to settle for that amount, the lawyer splits the costs with the company.

Different Skill Set

For DeGroote, the rate of legal fees is not the only measure of efficiency.

Plaintiffs’ attorneys possess skills that can add substantial settlement leverage to a case.

As a former plaintiffs’ attorney, DeGroote recognized that plaintiffs’ attorneys carry a certain mindset – one that optimizes time and money, as opposed to a reactive posture that defense lawyers often take.

“Plaintiffs’ lawyers are asking themselves, ‘How would I put this case on to get from where we’re standing to a payment in the most efficient and best way possible?'” he said.

Hiring out that instinct is a little bit like having a double agent, someone who can explain what the other side might be planning.

“I’m not saying defense lawyers can’t do it, but I’ve had a lot of luck with plaintiffs’ lawyers who put on the other hat,” DeGroote added.

DeGroote sometimes hires a few plaintiffs’ attorneys just to get their ideas on how a case might be tried down the road.

He admits that in some instances, such meetings have convinced him to change his defense strategy.

In one dispute over whether Virginia-based Bearing Point lived up to its contract to provide software services to its clients, DeGroote changed his perspective that it was a purely contractual claim after presenting the facts to three plaintiffs’ attorneys, who suggested that the client may have had unreasonable expectations.

“They said ‘Forget what the contract says. How did the clients get these different expectations? It sounds like the software vendor led them to believe the software would do things it wouldn’t do,'” DeGroote said.

In addition to scoping out counterclaims, plaintiffs’ attorneys are willing and able to try cases.

Michael Cash, a Houston plaintiffs’ attorney, said he is often called in by a corporation several weeks before a trial solely for the purpose of taking the case to trial.

In one case, he was hired by U-Haul eight weeks before the trial in an employment case, even though Cash had no employment law experience.

The company had been advised to settle for $1 million, but Cash learned everything he needed to know about employment law in eight weeks and wound up getting a jury verdict of $120,000.

Even if a case doesn’t go to trial, plaintiffs’ attorneys can leverage their reputation with plaintiffs’ lawyers on the other side of a case to resolve a dispute faster.

“Lawyers who are known as plaintiffs’ lawyers talk the same language and have a mutual respect for each other and may be able to sit down, cut through the irrelevancies and figure out the appropriate value of a case,” said DeGroote.

But DeGroote’s decision to hire plaintiffs’ attorneys has not always been well-received by his colleagues.

In one case he defended he got a call from a skeptical co-defendant.

“Did you really hire that plaintiffs’ lawyer with the license plate that says ‘CASH’?” he was asked.

“That happens to be his name, and yes I did,” DeGroote replied.

The plaintiffs’ attorney was Cash, who at the time was a solo plaintiffs’ attorney, and who has since worked with DeGroote several times.

According to Cash, DeGroote “had the last laugh” by getting his company dismissed out of the case very early on.

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Pros and Cons of Hiring Plaintiffs’ Attorneys

Pros: