In a bid to cut legal costs, Pfizer is creating a stir among lawyers after selecting just one law firm to handle almost all of its employment-related litigation. Moreover, the drugmaker is reportedly pioneering a capped-fee arrangement for the outside legal work, according toCorporate Counsel.
The winning law firm, Jackson Lewis, gets paid a certain sum each month, but has agreed to forgo billable hours. Pfizer, meanwhile, gets to recoup any money left over at the end of the year, based on a monthly accounting of time the firm spends on Pfizer legal work. "Jackson Lewis got it because they recognized that we needed to find some alternative to billing by the hour. They actually brought it up before we did," Maggie Madden, who heads Pfizer's employment law group, tells Corporate Counsel.
The move was made two years after the drugmaker dumped 80 percent of its hundreds of outside law firms and continues to scrutinize legal costs. A March 2007 audit of outside legal work, for instance, found that 40 percent of invoice data was "vague and noncompliant" with Pfizer's billing guidelines, the mag writes. Pfizer was getting overcharged for copies, billed for time spent on planes sleeping (or at least, not doing Pfizer-related work), and putting together budgets.
Under the deal, Jackson Lewis gets any employment-related legal work that arises over the next two years, including single-plaintiff discrimination cases, equal employment opportunity matters, class actions, and general advice and counsel. All existing employment cases were transferred to the firm except for one single-plaintiff case and two class actions, the mag writes.