Legal Feeds Blog
|The pricing deal incentivized the law firm to be more efficient, says HIROC's VP Michael Boyce.|
The team is the only Canadian duo on the list announced today, which also features firms from the United States, Italy, the United Kingdom, and China.
The savings have been “well north of 10 per cent and perhaps 15 to 20 per cent,” says Michael Boyce, HIROC’s vice president of claims.
“That’s probably very conservative,” adds John Morris, a partner at BLG.
With the help of a consulting firm, the two companies introduced value-based pricing, combining a base rate of $49.7 million over five years, with a 15-per-cent fee-based performance.
Boyce says the change has led to increased efficiencies on both sides, without adversely affecting the quality of the service being provided.
“It incentivized BLG to work harder and be more efficient, and encouraged HIROC not to over-use the services,” he states.
“We realized it’s not sufficient just to get the law firm to change their practices,” he adds, explaining how HIROC now has a completely paperless office, has reduced the “number of hands touching a file.” and relies on phonecalls instead of written letters.
BLG was able to implement the fee structure partly through using paralegals to a high degree.
“That was [already] something we were doing to try to make sure that the right work was being done at the right level,” says Morris.
But entering into discussions with HIROC provided impetus to go further. “A lot of the efficiencies have come through analyzing what we’re doing — the client giving us the licence to ask how we can do the work in different ways,” he adds.
Although the move was made easier by the two firms’ long-standing relationship and HIROC’s ability to forecast its budget based on previous patterns, the model “absolutely could be replicated with other clients,” Morris believes.
The values champions were nominated by ACC members, who are based in 75 different countries. Around a fifth of the nominations came from outside the U.S, up from eight per cent last year.
Announcing the values champions this morning, Catherine Moynihan, the ACC’s director of legal management services, said: “The traditional practice of law has been turned on its head by these departments. Gone are the days in which legal practice consisted solely of meetings, memos, and briefs.
“In-house counsel are re-engineering the legal function to maximize the strategic value of their work, resulting not only in reduced costs and higher client satisfaction, but also in improved morale among their staffs.”
Other in-house departments named as value champions included British Telecom and Nike.
They were recognized for innovations including new ways to share costs in joint litigation, the use of legal process outsourcing, switching to greater than 50 per cent alternative fee arrangements and negotiating long-term relationships.
The desire for more predictable costs was a common theme, said Moynihan.
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Cirvek Fund, the plaintiff in the case was seeking reimbursement from the defender for roughly $2 million in outstanding legal fees it incurred during an epic 2009 legal battle it won in Ontario Superior Court in a case involving a real estate transaction in downtown Toronto.
In his June 12 decision in Cirvek Fund I., l.p.c. Lombard General Insurance Co. of Canada, Quebec Superior Court Justice Stéphane Sansfaçon weighed the actions of the plaintiff and the fees charged by its lawyers in the case.
“All of the lawyers who executed their mandates, whether from the firms of Davies Wards, Davies Howe, or Paliare Roland, had the experience needed to accomplish their mandate,” wrote Sansfaçon.
“However the evidence shows that the intervention [of Cirvek’s president], demanding [to change lead lawyers] added nothing to the case except the generation of additional legal fees.”
The substitution, added the judge, changed nothing because Cirvek “benefitted already from one of the best legal representations it could have hoped for.”
The judge then listed, in paragraph 192, the fees charged by the legal team of Davies Ward Phillips & Vineberg LLP for 3,780.9 hours of billed work. The judge noted the hourly rate varied between $225 and $825 an hour, and worked out to an average of $472.60.
While acknowledging the 10-per-cent volume discount given by the firm, the judge concluded the mandate given by Cirvek to its lawyers “greatly exceeded” the requirements for an adequate defence.
“The mandate given by Cirvek [was[ to do anything to win, regardless of efforts and cost,” the judge wrote. “Cirvek wanted ‘the best of the best,’ and they got it. Cirvek wanted an extremely rapid end to the litigation, and they got that too.
“In the world of automobiles, what Cirvek bought in terms of legal services was a cross between a Bentley and a Ferrari, with the price tag included. Cirvek got its cross, and is now trying to make its insurer pay.”
The judge ruled the plaintiff be reimbursed $965,000 in legal fees — less than half of what it was seeking.
|Ildiko Mehes says focusing only on cost cutting sets up in-house counsel for failure and detracts from other values the legal group offers.|
The new No. 1 goal for corporate counsel is to transform from a cost centre to being a strategic advocate for the companies they represent.
For each of the last six years the “BTI Benchmarking Corporate Counsel Management Strategies” survey has shown corporate counsel’s top goal was to control legal costs. But this year cost control has dropped to second plac. The number of corporate counsel who now see delivering value as their top goal jumped to 31.8 per cent from 18.7 per cent last year.
Overall legal budgets went up by 8.7 per cent, but the percentage going to outside counsel continues to drop.
The data is based on BTI research conducted from March 2012 to September 2012. BTI conducted more than 300 interviews with chief legal officers and general counsel at Fortune 1000 companies and large organizations. About 12 per cent of respondents were from Canadian companies.
The survey shows corporate counsel seek to add value to the business by adopting new tactics to meet their goal, including:
• Redefining strategies to obtain permits and regulatory approvals faster;
• Planning for acquisitions before the business units engage in talks;
• Sitting on research and development committees to spot IP opportunities earlier;
• Developing settlement decision trees to get to resolution faster; and
• Redesigning legal work flows — often with law firms.
Sitting in on R&D meetings is part of the job for Ildiko Mehes, vice president and general counsel at pharmaceutical company Teva Canada. In addition to the six-member legal department she heads up she’s also responsible for scientific affairs which includes regulatory affairs and R&D.
“This is exactly how I have approached my role for the past eight years and I have advocated for other in-house counsel to not be afraid to intertwine their legal expertise with business issues,” says Mehes.”The line between legal and business is not always clear, but it doesn’t always need to be.”
She says in-house counsel, with their legal expertise, understanding of the business, and good judgment are well positioned to create value for the business.
“Simply focusing on continued cutting of legal costs not only sets up in-house counsel for eventual failure but detracts from the potential value that the legal group could be creating. Good business leaders recognize this and encourage their in-house counsel to participate fully in all areas of the business,” says Mehes.
By actively trying to assist the business in improving the bottom line in different ways, corporate counsel can find savings and even revenue opportunities that end up being more significant than rate cuts, the report said.
For their part, law firms can help out by offering risk assessments and contingency plans or just offer a different approach to a litigation file.
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“In our view, the respondents on appeal are entitled to substantial indemnity costs,” wrote Justice John Laskin in today’s ruling in Teplitsky Colson LLP v. Malamas that ordered appellant William Malamas to pay $63,861 in costs.
“Mr. Malamas has persisted in his groundless allegations of fraud, breach of fiduciary duty, and other nefarious conduct by these parties. The nature of his allegations justifies substantial indemnity costs.”
In an article today, Law Times reported on the long-standing litigation launched by Malamas over a dispute related to a Danforth Avenue property in Toronto he was the landlord of. The property had the National Bank of Greece as its tenant.In his developer days, Malamas got into a dispute with the occupant bank and sued it for rent arrears and damages for breach of the lease.In the coming years, he sued virtually all of the lawyers who represented him in that litigation and other cases he came to be involved in. According to court documents, Malamas argues the lawyers “developed an attitude of increasing malice” toward him during their representation of him.
The law firms named in various lawsuits over the years, some of which no longer exist, include McCarthy Tétrault LLP, Toome Laar & Bell, Raphael Professional Corp., Goodman and Carr LLP, Gardiner Roberts LLP, and Hodder Solicitors, according to a ruling last year in Teplitsky Colson LLP v. William Malamas.
The June 2012 court decision that declared Malamas a vexatious litigant notes he sued a total of 16 lawyers over a span of six years. That number doesn’t include the lawyers who were once the owners of a building adjacent to his Danforth Avenue property.
Last week, Malamas went to the appeal court to challenge the vexatious litigant finding. Among other things, he argued that William O’Hara, counsel for Teplitsky Colson, didn’t have instructions from all 26 parties, which included corporations, to write the affidavit. But in today’s decision, the appeal court rejected that ground. “To save time and expense, the other applicants agreed that he could represent them as their agent and make submissions on their behalf,” Laskin wrote of O’Hara.
“They also agreed that a single omnibus application would be brought on behalf of all the applicants. The application judge recognized that this was a sensible course of action. In his procedural order No. 7, he confirmed that the application was brought with his prior approval.”
Malamas also argued Superior Court Justice Frank Newbould didn’t have authority to conduct the vexatious litigant application; there were inconsistencies in his reasons; and there was no admissible affidavit evidence in support of the application. The appeal court rejected all of those grounds as well.
Malamas’ long saga dates back to the 1980s. He says he has spent more than $1 million in legal costs and argues the system has failed him. While he suggests lawyers are abusing the court process, Ray Thapar, counsel for the parties that brought the vexatious litigant application, notes he first started doing work on the case as an articling student 13 years ago. He describes the long-standing case as being the result of “an overwhelming obsession with conspiracy."
Thomson Rogers partner, L. Craig Brown combines his love of the game with a passion to help by hosting friends of the firm at Polo for Heart, an event which has raised more than $5 million for heart and stroke related charities over the past 35 years. This year’s event was held June 14-16 at the Gormley Polo Centre, just north of Toronto, with proceeds going to the Heart & Stroke Foundation and Southlake Regional Health Centre in Newmarket. In addition to international polo matches, the event also features a fashion show, art walk, silent auction, the Perfect Polo Picnic Contest and the Best Hat Contest.
Seated: (l to t) Ann Krause, Dr. Joanna Hamilton. Standing: (l to r) L. Craig Brown, Joe Pileggi, Kim Duggan, Karen Lorimer.
(l to r) Kim Doogan, Tracy Martin, Stacey Stevens, Ann Krause, Lynne Harford, Craig Brown, Judith Hall, Dr. Joanna Hamilton, Karen Lorimer, Joe Pileggi.
The teams take the field.
Polo action. (Photo: Craig Brown)
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In May 2008, Selwyn Pieters, Brian Noble, and their articling student
|This decision is ‘important to the emerging jurisprudence on racial profiling from which lawyers and other black professional are not immune,’ says Selwyn Pieters.|
According to the Peel Law Association’s policy, only lawyers and law students are allowed to sit in the lawyers’ lounge.
On Thursday, the appeal court said the Divisional Court erred on several grounds, including its application of “stricter test of discrimination.”
“This error necessarily affected the Divisional Court’s analysis of whether the evidence could reasonably satisfy the test for discrimination,” the court said.
Yesterday’s decision re-affirms virtually all findings of the Human Rights Tribunal of Ontario, which ruled in 2010 that the court officer’s actions were discriminatory and that the respondents failed to provide a credible explanation as to why the appellants were questioned. The tribunal vice chairman had also said the manner in which the librarian, Melissa Firth, approached the three men was “aggressive and demanding.”
The tribunal’s ruling was dismissed at the Divisional Court, which found insufficient evidence to prove racism was the factor that led Firth to demand that the lawyers show their IDs.
In its argument, Peel Law Association gave a number of reasons why Firth could have approached the three men. It could have been because there were people who rearranged the furniture in the room earlier and another employee had told Firth those people were sitting where the men were seated, the association said. It could have also been because Pieters, Noble, and the articling student were sitting near the door and she simply happened to approach them first because they were closest to her as she walked in.
But the Court of Appeal said the tribunal did consider these arguments and was right to reject them.
“Improperly moving furniture and entering the lounge without entitlement are two different matters. Lawyers entitled to use the lounge can improperly move furniture,” the appeal court said, noting at no point during the incident did Firth give this as the reason why she was asking for identifications.
Instead, when the lawyers asked Firth why she was singling them out, she had said it was because she recognized everyone else in the room, a statement that was later found to be false. In fact, the ruling states, some of the other people in the lawyers’ lounge had never been there before and one of them was not a lawyer.
In a key message, the appeal court said a positive test of discrimination does not require ruling out all other potential reasons for a suspiciously racist act.
The appeal court’s decision is “significant and important” as one of the first racial profiling findings by the court that doesn’t involve law enforcement agents, Pieters told Legal Feeds via e-mail.
“Whilst racial profiling in the provision of goods, services, and facilities is widespread and pervasive, there is a dearth of racial profiling litigation in Canada,” he said. “The Court of Appeal decision in this case is important to the emerging jurisprudence on racial profiling from which lawyers and other black professional are not immune.”
The Peel Law Association is “disappointed” with the appeal court’s decision, says Mark Freiman, the lawyer representing Firth and the association.
“All I can say right now is that our client is disappointed in the outcome and we’re reviewing the decision,” he tells Legal Feeds.
Although a decision to appeal to the Supreme Court of Canada has not been made, that step remains an option, adds Freiman.
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Gail J. Cohen