The DuPont Legal Model
A winning legal
process to grow profits, streamline operations and utilize paralegals.
By Ari Kaplan
November/December 2005 Issue
Ask anyone to explain the aspects of paralegal utilization and the
DuPont Legal Model and the answer will almost certainly contain one or
all of the following words — “leverage,” “skills,” “value” and
“opportunity.” These are qualities that have for more than a decade made
the global conglomerate a renowned example of legal efficiency and its
paralegal staff incredibly loyal and satisfied.
E.I. du Pont de
Nemours and Co. (DuPont) was founded in 1802 and primarily is a science
and technology leader in areas such as the production of
high-performance materials, specialty chemicals, pharmaceuticals and
agricultural items. Its revenue regularly surpasses tens of billions of
dollars per year, and it has more than 70,000 employees (half of whom
work outside the United States — 70 countries at last count). Some of
its most popular products include Teflon, Lycra brand spandex,
Stainmaster stain-resistant carpet, Kevlar, Corian, Mylar and Tyvek.
With its extraordinary global brand and corporate reach, its legal
concerns range from litigation (the largest), commercial and
intellectual property to securities, labor and employment, and export
controls, among others.
The
Model
To manage its vast budget and to streamline its internal operations and
relationships
with outside counsel, DuPont first introduced its legal model in 1992.
Since then, the process has received worldwide acclaim, and its guide on
the subject, “The Competitive Edge: The Growing Power of the DuPont
Legal Model,” retails for $75 and is in its fourth edition. The legal
model is a convergence process designed to encourage law firms and
corporate law departments to improve the quality, cost and efficiency of
legal services. Strategic partnering and collaboration are the model’s
hallmarks. The goal is to build relationships for the long term so
resources are reused, rather than recreated or learned, in preparation
for each subsequent legal matter. To achieve its goals, the model
contains incentives and offers alternative fee structures that
distribute risks and rewards and further the financial success of all
parties. The process is continuously improved and refined through the
use of performance metrics — a series of standards for evaluating
program compliance, efficiency and best practices.
The keys to the
legal model’s success have been its ability to streamline legal
representation through its designation of primary law firms (PLFs) and
its commitment to the utilization of paralegals as critical members of
the legal team, rather than traditional support staff.
Primary
Law Firms
According to Thomas L. Sager, vice president, assistant general counsel
and chief litigation counsel, when DuPont conceived its legal model, it
used 350 law firms and 150 outside vendors who provided expert analysis,
jury consultant services, document management, etc. to handle its legal
projects worldwide. From 1992 to 1996, the company studied its use of
legal services and reduced these numbers to 34 law firms and four
vendors, saving millions of dollars in the process. Sager said DuPont
continually evaluates its firms and needs for services. Today, there are
42 firms in the PLF network and nine vendors in the United States,
Canada, Mexico and the United Kingdom.
The convergence
process removed firms that served as mere independent contractors in
favor of true “strategic partners” of DuPont. These partnerships are
based on long-term relationships and characterized by trust,
collaboration and common vision for problem solving and client
counseling. In addition to extensive interviews, firms are evaluated on
their commitment to excellence, financial success, technological
prowess, dedication to diversity, and capacity for risk and innovation.
In the past 13
years, the firms within the network have developed almost synergistic
relationships to the point where the network relationships are essential
to the very nature of the model. For the firms, it’s more than just the
prestige of representing one of the world’s largest corporations.
Paralegal Utilization
From 1992 to 1994, the company increased its staff of paralegals from
six to almost 40. It also created an official program and a career plan
for paralegals. Marybeth D. Davies has been the manager of that program
since 1996 and said, currently, “at 120 attorneys and 60 paralegals,
DuPont Legal frequently jokes that it can be considered one of the
biggest law firms in Wilmington.” In the earlier versions of the legal
model guides, there was less focus on paralegal utilization. However, in
1999, Davies and Sager discussed this issue and it was then that this
key subset of the legal model was organized into a book.
The publication of
“The Dollars and Sense of Paralegal Utilization” in 2002 realized the
legal model’s goal of maximizing the efficiency of a legal team and its
staffing in-house and by outside counsel, and renewed the campaign to
leverage the skills of each team member. The program enhances the
utilization of individual paralegals and adds to the bottom line of the
firms that are most successful at their promotion. Davies and her team
currently are working on the second edition of “Dollars and Sense.”
A legal department
of DuPont’s size handling large-scale matters needs a protocol for
giving paralegals responsibilities commensurate with their skills,
rather than with their titles. “Wherever there are attorneys, there are
paralegals,” Davies noted. “The model relies on early case assessment
methods to shift the focus from processing a lawsuit to resolving the
business problem.”
This assessment
plan requires outside counsel to set a target for a favorable resolution
of a particular matter and outline an appropriate strategy that meets
both business and litigation objectives. Paralegals always are at the
core of these plans.
Legal Assistant
Today’s
2004 Paralegal of the Year, Barbara S. Wallace, a corporate paralegal
and antitrust compliance audit coordinator with DuPont, said, “The model
empowers our paralegal peers in the primary law firms to have their
firms utilize them to their fullest potential so that we are all working
at a high level.” Wallace coordinates the antitrust audits with each
DuPont commercial lawyer for their respective business units, including
reviewing paper and electronic files and e-mail accounts to make sure
employees adhere to DuPont’s Antitrust Compliance Program.
In addition to
staffing, the model places a premium on the use of technology and
innovation in its legal service providers. To enhance efficiency and
distribute information on a wide platform, DuPont uses electronic
invoicing, matter management integration tools, electronic discovery
resources and document imaging to support its mission. DuPont is
responsible for relationships with its vendors and consultants to
maintain control of costs. This provides consistency in the cost
structure. It also allows the company to leverage the national volume of
work and ensure receipt of the highest-quality finished product because
the vendor is a true partner. These partners also are evaluated
annually.
Since paralegals
often are the most technically adept members of a legal team, the
emphasis on digital initiatives provides additional opportunity. “Our
paralegals are highly leveraged and are very skilled. Several of the
outside paralegals are the primary contacts for some of the internal
groups,” Davies said.
Paralegals focus on
key projects such as analyzing documents for production, collaborating
on database design with outside counsel and drafting initial versions of
key documents, among others, which free the lawyers to focus on critical
issues, Davies said. “Management values paralegals. We are considered an
extension of the attorneys,” she added. Attorneys are held accountable
for their utilization of paralegals in their year-end reviews.
While responsible
for hiring, firing, discipline, career development and continuing
education, Davies also works with paralegal committees to improve job
performance and satisfaction. This focus has positively impacted life at
work — paralegals are treated as professionals, they manage their
personal schedules and have their own offices.
After six years
with DuPont, Wallace noted that the legal department offers premier jobs
for paralegals because they develop expertise in specialty areas such as
compliance, immigration, export controls, trademarks and antitrust. “Our
development is our own. There are a lot of opportunities we are given
that paralegals at other companies are not,” she said, adding that
paralegals gain greater expertise, with some leading the practice areas
previously led by attorneys. This provides an opportunity to be outside
counsel’s primary contact at DuPont. “We can take the job to whatever
level we want,” Wallace said.
From the attorney’s
perspective, “The utilization model impacts the legal work favorably,”
said Ross Schmucki, corporate counsel in litigation. “Marybeth [Davies]
is running a program that empowers paralegals to use their skills at the
highest possible level.” Schmucki echoed the theme at DuPont that the
legal team universally endorses paralegal utilization. “Paralegals are
capable, intelligent professionals, and we want to apply their talents
at the highest level,” he said. Litigation paralegals, for example, work
closely with primary law firms in a partnership, frequently acting as
liaisons with outside counsel for DuPont employees and as full members
of the PLF’s team. They also are employed in a variety of in-house
roles, from providing reports to upper management and supervising
document productions to independently managing claims.
Those interested in
moving to
Wilmington
for a paralegal job at DuPont, take note: “We very rarely hire
entry-level paralegals because we put such high demands on them,” Davies
said. They also have incredibly varied roles. Davies said each
paralegal’s job is different, and they all do more than just handle
documents. The company requires at least a four-year college degree,
generally a certificate from an American Bar Association-approved
paralegal program and at least two to four years of applicable
experience.
Schmucki, who has
been with the company for 17 years, pointed out that two of the
department’s practice group leaders are nonlawyers — one in bankruptcy
and one in customs and international trade. Practice leaders enhance
knowledge sharing among the members of a particular practice area and
make sure a consistent message is disseminated.
Emulation
“The Competitive Edge” is in its fourth edition and each edition builds
on its predecessor. Since the inception of the program, hundreds of
companies have tried to emulate the model. As an adjunct to the legal
model, paralegals are excited to promote “The Dollars and Sense.” It’s
often mentioned during press interviews and at various conferences.
Davies is a board member of the International Paralegal Management
Association and she discusses it at meetings and presentations as well.
“We share it with anyone, and we are glad to talk with
anyone who wants to
learn about it. The more companies do what we are doing, the more we can
change the legal profession,” Davies said.
Sager said that
after 13 years of offering seminars and guidance on the legal model,
four components generate the most interest: 1) creating a network of
primary law firms committed to mutual collaboration; 2) maximizing
paralegal skills and contribution; 3) generating support for temporary
staffing in large document-intensive projects; and 4) providing specific
examples of technology tools.
The company has
been particularly sensitive to these issues because “we needed to walk
the talk,” Davies said. Lawyers at DuPont and those representing DuPont
are strongly encouraged to recognize paralegal skills and utilize them
efficiently. Paralegals at DuPont or who work on DuPont matters at a PLF
take the initiative to assume responsibility for key projects and
request to be present at key meetings. Paralegal utilization also is
raised on periodic evaluations and in PLF discussions with clients.
“The best thing
about the model is that I know when I speak to paralegals at [primary]
law firms, I am speaking to the people who are working on the projects
that I am asking about,” said Walter Connor, a corporate paralegal in
the litigation division. “This is client driven — I shouldn’t have to
pay an associate for something that I can discuss with a paralegal.”
Connor said a
paralegal working with the facts and all the data might have a better
perspective on a particular issue. “It opens up an information pool that
for so many years has been closed because that is the way we were doing
business,” he added. Traditionally, Connor noted, the paralegal has been
the fact gatherer and information organizer at law firms. When the
client needs a report, however, it’s provided by an attorney managing
the case. Because the paralegal was not included in the initial
discussion regarding the information being sought, the paralegal must
rely solely on the lawyer’s interpretation and communication regarding
the request when he or she responds. If, however, the paralegal is
involved in the initial discussions, or contacted the client directly to
ask follow-up questions, the information provided to the client is more
likely to be complete, he explained.
Adherence to the Model
Primary law firms submit benchmark surveys annually indicating their:
ability to save the company money, success in the representation,
effectiveness in partnering with the company and members of the legal
network, commitment to leveraging technology, promotion of diversity,
and acceptance of alternative fee arrangements.
In-house legal
managers provide high-level reports to DuPont’s chief executive officer
and board of directors indicating how much was spent on legal fees in a
given year, the amounts paid out in settlements and totals recouped in
recoveries. They also evaluate outside counsel on their
partner-to-associate-to-paralegal ratio, the time it takes to bring
matters to closure, their ability to use technology to reduce costs and
increase efficiency, and their overall level of success. And, of course,
PLFs are evaluated on their adherence to the rigor and discipline of the
legal model. This includes assessing the case quickly and properly,
using approved vendors and paralegal staffing. Sager noted that a factor
in selecting a new primary law firm recently was “the fact that the firm
employs very significant numbers of paralegals and empowers them.” An
outside firm’s valuation of paralegals materially can help them become a
primary law firm, he added.
The use of
paralegals is the linchpin to success in all of the areas on which PLFs
are evaluated. If additional responsibility is delegated to a paralegal
member of a team, the attorneys can better focus on complex legal
analysis and strategy. Not only does this improve the
paralegal-to-attorney ratio, but it also increases the likelihood of
success on behalf of DuPont and the firm’s other clients. In addition,
there are billing and revenue advantages — better and more experienced
paralegals command higher rates.
At DuPont and
elsewhere, alternative fee arrangements are gaining popularity and
encourage outside counsel to more efficiently and cost-effectively
represent their clients. Staffing a project with skilled paralegals,
rather than junior associates, promotes the relationship. That
relationship often is scrutinized in fee awards determined by courts,
and adjustments can be made based on the value assigned to specific
tasks.
DuPont’s model
exemplifies a point that often can be overlooked in the legal
profession: Recognizing and utilizing talented individuals increases
their job satisfaction, adds to employee retention and ultimately
affects a company’s bottom line. From the firm’s point of view,
fostering a relationship with the client at all levels will build
loyalty and lead to repeat assignments. “Paralegals provide tremendous
value to the company,” Schmucki added.
The
Future
Driven by a spirit of continuous improvement, the legal department at
DuPont is working to transform itself from a cost center into a revenue
stream. It recovered $108 million in 2004 and has projected a goal of
$116 million for 2005. The company also has created a collaborative
technology tool called “The Edge,” which is applied across practice
areas and firms.
The Edge contains
digital blackboards, case management tools and virtual meeting rooms for
document and strategy sharing, both internally and throughout the PLF
network. Finally, to foster its core commitment to diversity, DuPont
continues to add minority-owned law firms to its network.
Looking to the
future is what led to the creation of the legal model at DuPont.
Encouraging investment in its legal team is what has sustained that
success.
Ari Kaplan is an attorney and
a freelance writer. His work has been published in Wired, Crain’s New
York Business and The National Law Journal, among other publications. He
can be reached at
[email protected]. |
