Duane Morris Brings Early Case Assessment In-House

“It was a perfect storm,” Taylor says. “Litigation clients have been clamoring for something like this for years, commercial providers had not responded so early case assessment was static, and between our litigators and IT people, we had the capability to develop this in-house. The most important thing is that our litigation clients will benefit immensely from it, and it has the added benefit of giving Duane Morris a substantial leg-up in an increasingly competitive law firm environment.

“I don't view DNA as trying to keep up with the Joneses on early case assessment,” Taylor continues. “My strong sense is that we are the Joneses in that DNA allows us to offer our clients a systemized approach to predicting litigation costs and likely outcomes, rather than a back-of-the-envelope estimate.”

How DNA Works

Besides projecting costs, calculating risk and reputational exposure, evaluating the merits of each case and predicting significant mileposts throughout the litigation process, the proprietary software reviews and synthesizes relevant jurisdictional and technical issues. The DNA software considers factors ranging from proclivities of the presiding judge and opposing counsel, likely jury behavior and the potential number of witnesses to the likely volume and cost of e-discovery, damage to reputation and the impact on shareholders and financial institutions.

Firm clients ' usually in-house counsel ' then receive detailed reports, which they can review with Duane Morris litigators and share with their business-side corporate counterparts.

“This is a real technology- and practice-based system based on real analysis,” Zullo says, noting that the firm charges for the use of DNA, with costs varying based on the complexity of the litigation. As with most matters, the billing can be either hourly or at a flat rate, he says.

“DNA goes so far beyond a lawyer's belief that a given matter will require a certain amount of time and money from start to disposition,” Zullo says. “It's just this side of a scientific analysis and really amounts to a kind of financial statement and cost-estimator for a lawsuit. Business clients will now be able to see clearly the costs and likely outcomes, which will allow them to make better decisions based on cost-benefit judgments.”

The 15 years' worth of data that form the underpinnings of DNA were provided by the firm's litigators, and those litigators and staff are charged with keeping DNA current with regard to new statutory and case law as well as judicial decisions. But non-litigators play a significant role as well: At crucial intervals, DNA incorporates the insights of non-litigation attorneys who come from other practice areas, disciplines and perspectives and who can add context to the qualitative input. Depending on the case and the issues, non-litigators may be asked to weigh in on larger trends: how regulatory agencies are thinking and behaving; what is hot in intellectual property protection; pending legislation that is likely to become law; and enforcement trends at the U.S. Department of Justice.

Monitoring Costs

Meanwhile, just as the attorneys and technology specialists meshed their respective talents to develop DNA, and litigators and non-litigators join to provide input, the firm also teamed with LexisNexis to develop a companion tool called Redwood Planning, a software program that tracks litigation files' cost data contemporaneously, allowing the firm and its clients to monitor expenses.

“We have to be responsive to what our clients and prospects want,” Taylor says. “They are unequivocal about their need to measure, manage and contain litigation costs.”

That trend is hardly unique to Duane Morris' clients and prospects. A recent report by the BTI Consulting Group, BTI Litigation Outlook ' Changes, Trends and Opportunities for Law Firms, found that corporate officers and directors, under intense pressure from shareholders to contain costs, are in turn pressuring legal departments to ride herd on outside counsel and their billing practices. Those general counsel, in turn, are vociferous about their desire for resolution of litigation ' preferably early in the disputes ' before costs escalate, according to the report, which added that these trends are long-term and may heighten.

“Early case assessment is crucial to making the right decisions, saving clients time and money,” BTI wrote, advising law firms to “[p]rovide clients with proven benchmarks, tools and protocols to help them make the go/no-go choice with confidence '. Though tied in part to economic conditions, greater scrutiny of litigation outcomes is a direct result of the paradigm shift in corporate counsel buying behavior ' which will not be reversing anytime soon.”

Despite corporations' increasing desire to settle, as measured by dramatic increases in first-year settlements of commercial litigation ' 44% currently, more than double the 18% in 2009 ' DNA does not prejudge try-or-settle matrices. It allows companies to make that decision in accordance with their strategic goals, finances, willingness to assume risk and other considerations.

The initial iteration of DNA includes six phases. They measure, in order:

1. The client's business and legal objectives, both generally and specifically relative to the litigation. It also assesses the client's litigation history.
2. The second phase ' triage ' is process-heavy, establishing attorney-client privilege protocols; identifying filing deadlines, including notification of the SEC and other regulatory agencies as well as lenders; examining insurance issues such as coverage, indemnification and notification; and setting protocols for preserving relevant documents.
3. An analysis of the facts and relevant law dominates the third phase. This includes researching the opposition ' litigation adversary and its counsel ' and an early assessment of documents. It identifies possible experts and potential additional defendants and includes the beginning of the interviews of key witnesses.
4. The fourth phase ' a probability analysis ' starts to identify the range of potential results. This includes narrowing estimates of the range of possible damages. It estimates other costs, including the amount of time that management will expend on the litigation and the resulting distraction, and whether proprietary trade secrets will be revealed. It also starts to measure the likely financial obligations of co-defendants.
5. The penultimate phase generates a clear budget for every possible stage of litigation, and cost-benefit analysis of continuing the litigation, possibly to include trial and appeals. This is also the phase where the client hones in on what would constitute a successful resolution.
6. In the final phase, the client ' in conjunction with counsel ' decides whether to employ some alternate dispute resolution (ADM) model, try to settle the matter outside of an ADM setting, or continue toward trial.

Duane Morris has begun internal discussions about a DNA 2.0 of sorts ' an iteration that would allow other practice groups to use it. “We're looking at making it applicable to intellectual property, appeals, employment law, and other areas,” Zullo says. “Happy clients mean long-term clients and a healthy law firm.”

Adam Schlagman is Editor-in-Chief of this newsletter and a practicing attorney.

With a view to addressing a market imbalance ' litigation clients demanding better early case assessment, and commercial providers not developing tools to meet that need ' Duane Morris litigators handed the firm's technology team a mandate: Help us develop a system to assist our clients in the resolution of the ubiquitous try-or-settle conundrum and, in the process, position the firm to capture more litigation business.

Thus was the genesis of Dispute Navigation Analytics (DNA (sm)), Duane Morris' proprietary system that evaluates both qualitative and quantitative elements of lawsuits early in the process. DNA analyzes numerous case-specific factual and legal issues, superimposes them on larger litigation trend lines, and offers narrow-range predictability as to costs, risk exposure and outcome probabilities.

Commissioned more than a year ago by the firm's trial practice group chair, Matthew Taylor, designed by a litigation team led by partners Michael Zullo and Wayne Mack, and developed by the firm's IT specialists, DNA made its internal debut at an all-lawyer meeting in October, allowing attorneys to familiarize themselves with the system.

“It was a perfect storm,” Taylor says. “Litigation clients have been clamoring for something like this for years, commercial providers had not responded so early case assessment was static, and between our litigators and IT people, we had the capability to develop this in-house. The most important thing is that our litigation clients will benefit immensely from it, and it has the added benefit of giving Duane Morris a substantial leg-up in an increasingly competitive law firm environment.

“I don't view DNA as trying to keep up with the Joneses on early case assessment,” Taylor continues. “My strong sense is that we are the Joneses in that DNA allows us to offer our clients a systemized approach to predicting litigation costs and likely outcomes, rather than a back-of-the-envelope estimate.”

How DNA Works

Besides projecting costs, calculating risk and reputational exposure, evaluating the merits of each case and predicting significant mileposts throughout the litigation process, the proprietary software reviews and synthesizes relevant jurisdictional and technical issues. The DNA software considers factors ranging from proclivities of the presiding judge and opposing counsel, likely jury behavior and the potential number of witnesses to the likely volume and cost of e-discovery, damage to reputation and the impact on shareholders and financial institutions.

Firm clients ' usually in-house counsel ' then receive detailed reports, which they can review with Duane Morris litigators and share with their business-side corporate counterparts.

“This is a real technology- and practice-based system based on real analysis,” Zullo says, noting that the firm charges for the use of DNA, with costs varying based on the complexity of the litigation. As with most matters, the billing can be either hourly or at a flat rate, he says.

“DNA goes so far beyond a lawyer's belief that a given matter will require a certain amount of time and money from start to disposition,” Zullo says. “It's just this side of a scientific analysis and really amounts to a kind of financial statement and cost-estimator for a lawsuit. Business clients will now be able to see clearly the costs and likely outcomes, which will allow them to make better decisions based on cost-benefit judgments.”

The 15 years' worth of data that form the underpinnings of DNA were provided by the firm's litigators, and those litigators and staff are charged with keeping DNA current with regard to new statutory and case law as well as judicial decisions. But non-litigators play a significant role as well: At crucial intervals, DNA incorporates the insights of non-litigation attorneys who come from other practice areas, disciplines and perspectives and who can add context to the qualitative input. Depending on the case and the issues, non-litigators may be asked to weigh in on larger trends: how regulatory agencies are thinking and behaving; what is hot in intellectual property protection; pending legislation that is likely to become law; and enforcement trends at the U.S. Department of Justice.

Monitoring Costs

Meanwhile, just as the attorneys and technology specialists meshed their respective talents to develop DNA, and litigators and non-litigators join to provide input, the firm also teamed with LexisNexis to develop a companion tool called Redwood Planning, a software program that tracks litigation files' cost data contemporaneously, allowing the firm and its clients to monitor expenses.

“We have to be responsive to what our clients and prospects want,” Taylor says. “They are unequivocal about their need to measure, manage and contain litigation costs.”

That trend is hardly unique to Duane Morris' clients and prospects. A recent report by the BTI Consulting Group, BTI Litigation Outlook ' Changes, Trends and Opportunities for Law Firms, found that corporate officers and directors, under intense pressure from shareholders to contain costs, are in turn pressuring legal departments to ride herd on outside counsel and their billing practices. Those general counsel, in turn, are vociferous about their desire for resolution of litigation ' preferably early in the disputes ' before costs escalate, according to the report, which added that these trends are long-term and may heighten.

“Early case assessment is crucial to making the right decisions, saving clients time and money,” BTI wrote, advising law firms to “[p]rovide clients with proven benchmarks, tools and protocols to help them make the go/no-go choice with confidence '. Though tied in part to economic conditions, greater scrutiny of litigation outcomes is a direct result of the paradigm shift in corporate counsel buying behavior ' which will not be reversing anytime soon.”

Despite corporations' increasing desire to settle, as measured by dramatic increases in first-year settlements of commercial litigation ' 44% currently, more than double the 18% in 2009 ' DNA does not prejudge try-or-settle matrices. It allows companies to make that decision in accordance with their strategic goals, finances, willingness to assume risk and other considerations.

The initial iteration of DNA includes six phases. They measure, in order:

1. The client's business and legal objectives, both generally and specifically relative to the litigation. It also assesses the client's litigation history.
2. The second phase ' triage ' is process-heavy, establishing attorney-client privilege protocols; identifying filing deadlines, including notification of the SEC and other regulatory agencies as well as lenders; examining insurance issues such as coverage, indemnification and notification; and setting protocols for preserving relevant documents.
3. An analysis of the facts and relevant law dominates the third phase. This includes researching the opposition ' litigation adversary and its counsel ' and an early assessment of documents. It identifies possible experts and potential additional defendants and includes the beginning of the interviews of key witnesses.
4. The fourth phase ' a probability analysis ' starts to identify the range of potential results. This includes narrowing estimates of the range of possible damages. It estimates other costs, including the amount of time that management will expend on the litigation and the resulting distraction, and whether proprietary trade secrets will be revealed. It also starts to measure the likely financial obligations of co-defendants.
5. The penultimate phase generates a clear budget for every possible stage of litigation, and cost-benefit analysis of continuing the litigation, possibly to include trial and appeals. This is also the phase where the client hones in on what would constitute a successful resolution.
6. In the final phase, the client ' in conjunction with counsel ' decides whether to employ some alternate dispute resolution (ADM) model, try to settle the matter outside of an ADM setting, or continue toward trial.

Duane Morris has begun internal discussions about a DNA 2.0 of sorts ' an iteration that would allow other practice groups to use it. “We're looking at making it applicable to intellectual property, appeals, employment law, and other areas,” Zullo says. “Happy clients mean long-term clients and a healthy law firm.”

Adam Schlagman is Editor-in-Chief of this newsletter and a practicing attorney.