Beverly G. BaughmanAssistant General Counsel

Pfizer Inc

June 7, 2007

“Selecting and Managing a Virtual Law Firm in Global Mass Tort Litigation”

Virtual Firm: What is it?

Characteristics:

• Integrated group of law firms with expertise

• Represent same client in matters pending across several jurisdictions

• Work collaboratively with national, regional, and local firms and co-defendant

• Flexible organizational and management tool

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Virtual Firm Selection: National Coordinating Counsel

• Direct line to client

• Quarterback, manager, director

• Ensures single, consistent litigation strategy

• Uses state-of-the art technology to cost-effectively manage multi-state litigation

• Important role in budget management

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Virtual Firm Selection: Regional and Local Counsel

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PA WV

NJ

• Regional and Specialty Counsel

• Counsel organized geographically or by specialty – Case work-ups

– Expert development and discovery

– Trial counsel

• Local Counsel

• Key for hellhole jurisdictions (IL, MS, PA, NJ, WV)

• Politics play a key role

IL

MS

Virtual Firm Management: Cooperation is Key

Key is to obtain talented lawyers with a cooperative spirit

• Can be challenging

• Selection process is key

• Reputation and track record are important

• Ask potential counsel what firms they would recommend

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Virtual Firm Management: Budgeting

The 5 Step Budgeting Process:

Step 1: Set the Budget

Step 2: Track Fees and Expenses

Step 3: Analyze Data

Step 4: Respond to Challenges

Step 5: Results: Predictability and Savings

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Setting the Budget: A 3-Step Process

AssumptionsAssumptions ResourcesResources CostCost

What work needs to be done?

Who will do the work?

How much will it cost to pay for

resources?

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Tracking Litigation Fees and Expenses

What to Track:

• Projected Costs

• Actual Costs

• Both Outside Counsel and Vendors

Methods:

• Electronic Systems

• Inquiries to Counsel

• Monthly monitoring is key

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Type Total Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov

Budget

National Counsel 797,000$ 9,400$ 9,400$ 76,800$ 76,800$ 59,300$ 59,300$ 159,300$ 159,300$ 9,400$ 84,300$ 84,300$

Local Counsel 193,750$ 1,500$ 1,500$ 36,750$ 36,750$ 1,500$ 1,500$ 1,500$ 1,500$ 1,500$ 1,500$ 36,750$

Law Firm Exps 79,260$ 872$ 872$ 9,084$ 9,084$ 4,864$ 4,864$ 12,864$ 12,864$ 872$ 6,864$ 9,684$

Document Produc -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Support Vendor 123,844$ 1,363$ 1,363$ 14,194$ 14,194$ 7,600$ 7,600$ 20,100$ 20,100$ 1,363$ 10,725$ 15,131$

Indemnity -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Total Budget 1,193,854$ 13,135$ 13,135$ 136,828$ 136,828$ 73,264$ 73,264$ 193,764$ 193,764$ 13,135$ 103,389$ 145,865$

Projected/Actual

National Counsel 218,725$ 9,325$ 9,400$ 95,000$ 105,000$ -$ -$ -$ -$ -$ -$ -$

Local Counsel 97,857$ 1,457$ 1,400$ 45,000$ 50,000$ -$ -$ -$ -$ -$ -$ -$

Law Firm Exps -$ 500$ 530$ 12,000$ 9,000$ -$ -$ -$ -$ -$ -$ -$

Document Produc -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Support Vendor 46,655$ 1,355$ 1,300$ 21,000$ 23,000$ -$ -$ -$ -$ -$ -$ -$

Indemnity -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Total Projected/Actual 363,237$ 12,637$ 12,630$ 173,000$ 187,000$ -$ -$ -$ -$ -$ -$ -$

Variance

National Counsel (46,325)$ 75$ -$ (18,200)$ (28,200)$ -$ -$ -$ -$ -$ -$ -$

Local Counsel (21,357)$ 43$ 100$ (8,250)$ (13,250)$ -$ -$ -$ -$ -$ -$ -$

Law Firm Exps (2,118)$ 372$ 342$ (2,916)$ 84$ -$ -$ -$ -$ -$ -$ -$

Document Produc -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Support Vendor (15,543)$ 8$ 63$ (6,806)$ (8,806)$ -$ -$ -$ -$ -$ -$ -$

Indemnity -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Total Variance (85,343)$ 498$ 505$ (36,172)$ (50,172)$ -$ -$ -$ -$ -$ -$ -$

Mass Tort: Litigation Tracking Tool

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Mass Tort Budgeting: Analyze Data

• Identify variances

• Identify reasons of variances

• Collaboration between OC, house counsel and Legal Finance

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Respond to Challenges

• Readjust Priorities/Strategy

• Readjust Timing of Work

• Readjust Workload

• Improved Management/Coordination

• Renegotiate Fee Arrangements

• Seek Alternative Counsel/Vendors

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• Predictability

• Year end budget goals and/or savings

• Early identification of problems (no surprises)

Budgeting Results

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Requires in-house and outside counsel commitment to:

• Adequate staffing / resources devoted to budget

• Budget tracking and analysis

• Monthly monitoring regime

Results (cont’d)

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The End