As the tort reform battle rages on in Washington, conventional wisdom says plaintiffs' lawyers and corporate America have nothing to gain from one another. But BearingPoint Deputy General Counsel and Chief Litigation Counsel John DeGroote–and his use of plaintiffs' attorneys as outside counsel–may just be the exception.

A former plaintiffs' lawyer for Dallas' McKool Smith, DeGroote says his strategy, however unconventional, is not only an effective litigation-management tool, but also an enormous cost saver for his employer, the McLean, Va.-based business consulting firm formerly known as KPMG.

“For in-house counsel, their usual outside law firm may be the safe, easy bet, but that comfort can be awfully expensive,” he says. “In every case we need to weigh the benefits of a less orthodox approach.”

Lawyers of all stripes have long gotten a bad rap for being averse to change. But soaring litigation costs for corporations and caps on damages for plaintiffs' firms may just be the catalyst for the greatest innovation of them all: in-house counsel and plaintiffs' attorneys working together.

Scare Tactics

These symbiotic relationships, DeGroote says, prove most worthwhile in big-ticket cases that need a quick resolution. Plaintiffs' attorneys, who are used to getting paid if and only if they win, do what they do best for a paycheck: cut to the chase.

“Having been on the plaintiffs' side, I know the goal is to get to a successful result with as few turns as possible,” he says.

For this type of litigation, DeGroote says it doesn't matter if BearingPoint is a plaintiff or a defendant; in each case, working with a plaintiffs' attorney has a number of advantages.

One such benefit is the perception that plaintiffs' attorneys are more than ready to head to the courtroom.

“If you know the other side is truly willing to go to trial, it changes your whole strategy,” he says. “If you have a lawyer who hasn't been there, you can't be much of a threat.”

When BearingPoint was named as a codefendant a few year ago in a breach of contract case, for example, DeGroote brought in renowned Houston trial attorney Michael Cash (now a partner at Winstead Sechrest & Minick) as local counsel. In the end, BearingPoint was dropped as a defendant–and spared the cost of drawn out litigation–in large part because of Cash's reputation.

“I got ribbed a little [by the co-defendant] for hiring a plaintiffs' attorney, but I believe the other side was genuinely scared of Mike Cash,” DeGroote says. “They had a great deal of respect for him, and they knew it was going to be a long, hard road ahead with him involved.”

In another case, DeGroote's decision to have a plaintiffs' attorney depose a witness proved crucial. “I hired a plaintiffs' lawyer specifically for one deposition,” he says. “I did not need someone to go through 300 documents. I needed someone to rip the deponent to shreds.”

The lawyer did just that and the plaintiff agreed to settle.

Firms For Hire

If all in-house counsel were like DeGroote, they would never make what plaintiffs' lawyer Jeff Cooper says is a common, but potentially devastating, mistake.

“When one company sues another, the corporation hires a defense firm to

do a plaintiffs' firm's job,” says Cooper, whose Madison County, Ill., firm, SimmonsCooper, is the country's leader in asbestos litigation.

Noticing this disconnect, SimmonsCooper and New York-based Hanly Conroy Bierstein & Sheridan–recently noted for its lawsuits against airlines and airport security companies on behalf of the victims of September 11–have set out to show companies that plaintiffs' attorneys can be useful to have on board. While keeping their mass-tort practices intact, the two firms formed a joint venture earlier this year to work as plaintiffs' counsel for corporations on a contingency basis.

Although he recognizes that a personal injury case is a far cry from a trademark dispute, Cooper says he's interested in helping those that have been wronged–period.

“There's as much injustice done to corporations as to individuals,” he says.

So far, the firms have filed or investigated more than 50 cases as part of their foray into business-to-business litigation. “We've had an enormous number of inquiries from small and large companies about potential claims,” says Paul J. Hanly Jr., one of just five partners at his firm.

Initially, the joint venture framed its contingency-fee model as an alternative for companies without the money to hire outside counsel on an hourly basis. Although many of their current business-to-business clients fit this mold, larger companies also have begun recognizing the benefits of such an arrangement.

“When companies look at pursuing a potential claim, they weigh the cost,” Hanly says. “If a corporation decides they don't want to pay any expenses up front, we have the capital to deal with that.”

Without naming names, Hanly says his firm is now working on a claim with SimmonsCooper for “a large company in the auto parts industry that employs 40,000 people and has annual sales in the billions of dollars.”

“The company is delighted to have lawyers who are willing to take on all of the financial risk,” he adds.

Risky Business

What business wouldn't be delighted with such an arrangement? Philadelphia-based plaintiff's lawyer Jim Beasley Jr.–whose firm holds the record for obtaining the largest compensatory damage verdict ($100 million) in Pennsylvania's history–is having trouble thinking of one.

“It makes sense for mom and pop companies, and for big companies,” he says, adding that he represents both individuals and businesses “who've been screwed.”

As with his individual clients, Beasley says a contingent-fee billing model can work for a range of companies. “Even for legal departments that have the cash to pay anyone they want, why not make your attorney carry some of the risk?”

For his part, DeGroote doesn't have straight contingency-fee agreements with his lawyers, but does add incentives to hourly billing arrangements. “I have offered negotiated bonuses if a case is resolved by X date for under Y dollars,” he says.

DeGroote argues that outside counsel who are operating on some sort of contingency-fee model are far more efficient in litigation than those who are working on a traditional hourly rate.

“Take a look at the incentives,” he says. “Who has the incentive to find the silver bullet?” According to DeGroote, this efficiency also has meant a huge cost-savings.

“We've saved the company a ton of money with this approach,” he says.

Of course, DeGroote cautions, there are certain types of cases in which using plaintiffs' attorneys would be a nightmare for legal departments. “For a case with a ton of documents that needs to be discovered to death, the worst lawyer for the case would probably be a contingent-fee lawyer,” he says.

And despite DeGroote's successful use of plaintiffs' attorneys, he doesn't think all legal departments could successfully replicate this approach,. At BearingPoint, DeGroote and General Counsel David Black have had management's buy-in from day one. But at companies in which management is more skeptical of such an approach, in-house counsel may find themselves questioning the wisdom of going out on a limb.

“It's inherently risky,” DeGroote says, “because if you get a bad result everyone will ask, 'Why didn't you just give the case to our regular outside counsel?'”

Some legal departments, Beasley adds, may be loath to move beyond their familiar cluster of outside counsel. “Many times, in-house counsel have had relationships for decades with these firms,” he says.

DeGroote says that the comparative instability of plaintiffs' firms is also negative for many legal departments. But most of all, DeGroote says, resistance to this approach may come from a fear of sleeping with the enemy.

“Some people criticize me, saying, 'You're letting the fox in the henhouse,'” he says. “I feel like I've been out there alone in the wilderness.”

As the tort reform battle rages on in Washington, conventional wisdom says plaintiffs' lawyers and corporate America have nothing to gain from one another. But BearingPoint Deputy General Counsel and Chief Litigation Counsel John DeGroote–and his use of plaintiffs' attorneys as outside counsel–may just be the exception.

A former plaintiffs' lawyer for Dallas' McKool Smith, DeGroote says his strategy, however unconventional, is not only an effective litigation-management tool, but also an enormous cost saver for his employer, the McLean, Va.-based business consulting firm formerly known as KPMG.

“For in-house counsel, their usual outside law firm may be the safe, easy bet, but that comfort can be awfully expensive,” he says. “In every case we need to weigh the benefits of a less orthodox approach.”

Lawyers of all stripes have long gotten a bad rap for being averse to change. But soaring litigation costs for corporations and caps on damages for plaintiffs' firms may just be the catalyst for the greatest innovation of them all: in-house counsel and plaintiffs' attorneys working together.

Scare Tactics

These symbiotic relationships, DeGroote says, prove most worthwhile in big-ticket cases that need a quick resolution. Plaintiffs' attorneys, who are used to getting paid if and only if they win, do what they do best for a paycheck: cut to the chase.

“Having been on the plaintiffs' side, I know the goal is to get to a successful result with as few turns as possible,” he says.

For this type of litigation, DeGroote says it doesn't matter if BearingPoint is a plaintiff or a defendant; in each case, working with a plaintiffs' attorney has a number of advantages.

One such benefit is the perception that plaintiffs' attorneys are more than ready to head to the courtroom.

“If you know the other side is truly willing to go to trial, it changes your whole strategy,” he says. “If you have a lawyer who hasn't been there, you can't be much of a threat.”

When BearingPoint was named as a codefendant a few year ago in a breach of contract case, for example, DeGroote brought in renowned Houston trial attorney Michael Cash (now a partner at Winstead Sechrest & Minick) as local counsel. In the end, BearingPoint was dropped as a defendant–and spared the cost of drawn out litigation–in large part because of Cash's reputation.

“I got ribbed a little [by the co-defendant] for hiring a plaintiffs' attorney, but I believe the other side was genuinely scared of Mike Cash,” DeGroote says. “They had a great deal of respect for him, and they knew it was going to be a long, hard road ahead with him involved.”

In another case, DeGroote's decision to have a plaintiffs' attorney depose a witness proved crucial. “I hired a plaintiffs' lawyer specifically for one deposition,” he says. “I did not need someone to go through 300 documents. I needed someone to rip the deponent to shreds.”

The lawyer did just that and the plaintiff agreed to settle.

Firms For Hire

If all in-house counsel were like DeGroote, they would never make what plaintiffs' lawyer Jeff Cooper says is a common, but potentially devastating, mistake.

“When one company sues another, the corporation hires a defense firm to

do a plaintiffs' firm's job,” says Cooper, whose Madison County, Ill., firm, SimmonsCooper, is the country's leader in asbestos litigation.

Noticing this disconnect, SimmonsCooper and New York-based Hanly Conroy Bierstein & Sheridan–recently noted for its lawsuits against airlines and airport security companies on behalf of the victims of September 11–have set out to show companies that plaintiffs' attorneys can be useful to have on board. While keeping their mass-tort practices intact, the two firms formed a joint venture earlier this year to work as plaintiffs' counsel for corporations on a contingency basis.

Although he recognizes that a personal injury case is a far cry from a trademark dispute, Cooper says he's interested in helping those that have been wronged–period.

“There's as much injustice done to corporations as to individuals,” he says.

So far, the firms have filed or investigated more than 50 cases as part of their foray into business-to-business litigation. “We've had an enormous number of inquiries from small and large companies about potential claims,” says Paul J. Hanly Jr., one of just five partners at his firm.

Initially, the joint venture framed its contingency-fee model as an alternative for companies without the money to hire outside counsel on an hourly basis. Although many of their current business-to-business clients fit this mold, larger companies also have begun recognizing the benefits of such an arrangement.

“When companies look at pursuing a potential claim, they weigh the cost,” Hanly says. “If a corporation decides they don't want to pay any expenses up front, we have the capital to deal with that.”

Without naming names, Hanly says his firm is now working on a claim with SimmonsCooper for “a large company in the auto parts industry that employs 40,000 people and has annual sales in the billions of dollars.”

“The company is delighted to have lawyers who are willing to take on all of the financial risk,” he adds.

Risky Business

What business wouldn't be delighted with such an arrangement? Philadelphia-based plaintiff's lawyer Jim Beasley Jr.–whose firm holds the record for obtaining the largest compensatory damage verdict ($100 million) in Pennsylvania's history–is having trouble thinking of one.

“It makes sense for mom and pop companies, and for big companies,” he says, adding that he represents both individuals and businesses “who've been screwed.”

As with his individual clients, Beasley says a contingent-fee billing model can work for a range of companies. “Even for legal departments that have the cash to pay anyone they want, why not make your attorney carry some of the risk?”

For his part, DeGroote doesn't have straight contingency-fee agreements with his lawyers, but does add incentives to hourly billing arrangements. “I have offered negotiated bonuses if a case is resolved by X date for under Y dollars,” he says.

DeGroote argues that outside counsel who are operating on some sort of contingency-fee model are far more efficient in litigation than those who are working on a traditional hourly rate.

“Take a look at the incentives,” he says. “Who has the incentive to find the silver bullet?” According to DeGroote, this efficiency also has meant a huge cost-savings.

“We've saved the company a ton of money with this approach,” he says.

Of course, DeGroote cautions, there are certain types of cases in which using plaintiffs' attorneys would be a nightmare for legal departments. “For a case with a ton of documents that needs to be discovered to death, the worst lawyer for the case would probably be a contingent-fee lawyer,” he says.

And despite DeGroote's successful use of plaintiffs' attorneys, he doesn't think all legal departments could successfully replicate this approach,. At BearingPoint, DeGroote and General Counsel David Black have had management's buy-in from day one. But at companies in which management is more skeptical of such an approach, in-house counsel may find themselves questioning the wisdom of going out on a limb.

“It's inherently risky,” DeGroote says, “because if you get a bad result everyone will ask, 'Why didn't you just give the case to our regular outside counsel?'”

Some legal departments, Beasley adds, may be loath to move beyond their familiar cluster of outside counsel. “Many times, in-house counsel have had relationships for decades with these firms,” he says.

DeGroote says that the comparative instability of plaintiffs' firms is also negative for many legal departments. But most of all, DeGroote says, resistance to this approach may come from a fear of sleeping with the enemy.

“Some people criticize me, saying, 'You're letting the fox in the henhouse,'” he says. “I feel like I've been out there alone in the wilderness.”