Portfolio fees for asbestos cases – Annual arrangement; single firm handles asbestos matters based on arrangements
with various UTC business units; payments are quarterly.
§;Fixed fees for patent prosecution cases – Fee structures include fixed fees per case; payment intervals are structured
around certain phases of the case.
§;Fixed fees for immigration matters – The law department implements a “menu” approach, with standard fixed fees
based on type of immigration matter that is being handled.
§;Target fees with bands – Used in the litigation and mergers and acquisitions context, this type of fee structure
includes negotiating target fees for a case or matter with ‘bands’ that span above and below the fee target; if
assumptions change and actual costs exceed bands, then potential for adjustment; if costs are within bands, under-and over-runs of the target are shared in agreed percentages.
§;Fixed fees with success bonuses – Used primarily in the litigation context.
§;Full or Partial Contingency fees – Used primarily for plaintiff litigation work.
OTHER VALUE PRACTICES IMPLEMENTED BY THE LAW DEPARTMENT
We have implemented the following initiatives:
§;Preferred onshore and offshore support vendors – The law department has implemented arrangements with various
external legal service providers for services that include ediscovery, document review and copying services.
§;Legal Hold and Ediscovery programs; ACE (Achieving Competitive Excellence) – Including software, internal
support teams, preferred providers and process mapping/standard work; more specifically the law department utilizes
tools within UTC’s ACE continuous improvement methodology, bringing together collaborative teams of in-house,
law firm and IT professionals to map litigation processes, and eliminate waste and unnecessary steps.
§;Expansion of access by outside counsel to UTC’s Law Trac and Foundation IP matter management – Enabling real-time collaboration within centralized platforms and creation of matter “knowledge management;” the law department
requires outside counsel to update matters in the law department’s systems, which helps centralize information and
eliminate waste. The program includes on-site training sessions with firms to help them understand how the matter
management systems work and law department expectations regarding matter updates and information.
§;Significant Litigation Management Program – Our newly implemented program is based on a gated process to
enhance coordination and leverage internal expertise. Matters that hit a certain dollar threshold qualify for this
new process, which includes an assessment of the matter, analysis of alternative fee structures and outside counsel
retention practices. The program also includes a “debrief” gate to institutionalize lessons learned, including
improvements to legal strategies/processes and business products/services.
§;Secondment arrangements – Both within and outside the United States, secondment arrangements are generally used
to help address staffing absences or to provide a focused resource if an area of the business results in an uptick of legal
work for an extended period of time. The law department generally reaches out to firms within its preferred network
to discuss secondment arrangements, and secondees generally spend some portion of their time working on site with
UTC in-house lawyers.
ESTIMATED COST SAVINGS
We have reduced UTC’s outside counsel spending as a function of revenue approximately 25 percent over the past 10+ years
of these initiatives, and although peer comparison data is hard to come by, anecdotally we believe we are in the first quartile
among peers in cost performance.
MOST VALUABLE PRACTICES; PROVIDED GREATEST RESULTS
§;Alternative fee structures that incentivize efficiency and results.
§;UTC’s Legal Hold and Ediscovery programs were developed using input from the law department, outside counsel,
corporate IT and our ediscovery vendors. We believe the end result is a comprehensive, well-integrated process
providing savings related to outside and inside costs –– all while lowering our risk profile.