The Sherwin-Williams Company & Gallagher Sharp
Deep Collaboration Positions Outside Firm as True Business Partner
By Jennifer J. Salopek
"We had successfully implemented the national counsel model in such various traditional areas as product claims and mass toxic tort, but this is the first time we used the model to defend product defect/warranty claims for highly technical coating products," says Ron Tamburrino, associate general counsel for litigation at Sherwin-Williams.
Tamburrino, who began the project in January 2011, explains that these coating products are used for bridges, heavy equipment, and military applications. "They're applied to objects that are exposed to the elements," he says.
The legal department at Sherwin-Williams saw an opportunity to lower costs and increase efficiency by applying the national counsel model to these claims. Rather than having to educate new counsel in every new case filed regarding the intricacies of the organization, technical issues involved with the products, and the projects where the products were often used, selecting a single national counsel would greatly increase efficiency.
"This is the first time we tried to approach these cases with nontraditional national counsel rules," Tamburrino says.
Claims involve highly technical and nuanced factual and legal issues. Eddy and other Gallagher Sharp attorneys attended specialized technical training side-by-side with in-house counsel and key business unit employees to develop industry certification. They gained specialized expertise about the products, their technical issues and performance characteristics.
"We really wanted to broaden their baseline technical knowledge," says Tamburrino. "The lawyers from Gallagher Sharp sat shoulder-to-shoulder with the Sherwin-Williams team."
They have also attended product specific training independent of any ongoing litigation and built relationships with key management personnel in the business unit responsible for selling and marketing these products.
The technical knowledge regarding the products and relationship building jointly completed by outside and in-house counsel has proven invaluable in defending these claims. "It really gives them much keener insight into the litigation issues to address," Tamburrino says. "They can identify those issues early, manage through them, and resolve them more quickly."
The national counsel model brings other benefits as well, such as streamlining many tasks that are common to the defense of these types of matters, such as common work product, similar pleadings, discovery, deposition strategies, and so forth. It is not a shared-risk arrangement due to the nature of the claims, but rather a hybrid retainer–hourly rate arrangement. Sherwin-Williams estimates savings to be 15 percent per case in litigation and expenses, which was calculated by looking at cases involving similar products with different counsel. "The savings were achieved by stripping away the learning curve," says Tamburrino. "We don't have to teach the issues repeatedly, and it greatly decreases the number of hours our technical people have to spend explaining things." Plus, he says, the billing model is simpler.
Legal outcomes have improved: Having an industry certified expert as outside counsel has led to better early case assessment, resulting in dismissal with prejudice of three significant matters very early in the litigation. "Involving Bob [Eddy] at the claims stage to work with claimant counsel, gathering information, allows him to sit down at the table and explain in a rational way what the real issues are. He plays a vital role in educating the opposition," Tamburrino says.
There have been nonfinancial benefits as well. The business unit has grown to respect the expertise of the combined internal/external counsel team; their legal advice is now sought regarding sales-generating activities unrelated to claims handling.
For other companies interested in implementing a similar model, Tamburrino offers these suggestions:
From the Judges
An excellent example of how the use of a single firm to coordinate designated types of matters nationwide can result in significant savings, improved predictability and improved outcomes. This is an approach all corporate law departments can consider, no matter what their size, and even if their work is far more local.