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The DuPont Legal Model
A winning legal process to grow profits, streamline operations and utilize paralegals.
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.
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.
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.
“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.
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 firstname.lastname@example.org.
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