Amy Schulman thrived in the traditional law firm–client relationship. As cohead of the mass tort and class action practice at DLA Piper, she reportedly had a $60 million book of business and was believed to be the firm's highest-paid partner. But when Schulman left private practice to become Pfizer Inc.'s general counsel in 2008, she set out to turn that relationship on its head. Building on the work of her predecessor at Pfizer, who had significantly shrunk the company's roster of outside counsel, Schulman created the Pfizer Legal Alliance (PLA), hiring a select group of law firms that would complete all of their work for Pfizer—from litigation to corporate matters—for an annual flat fee.
Like earlier flat fee models established by a handful of top companies, one of the main goals of the PLA was to cut outside legal costs. But Schulman saw the PLA as more than a way to save money. She viewed it as an instrument for fostering cooperation among Pfizer's outside law firms. "In the traditional model, firms are competing with each other to get the biggest dollar amount," says Schulman. Predetermining firms' compensation eliminates competition among firms and their incentive to bill as many hours as possible, Schulman says. Remove those distractions, and firms can focus on working together to get the best outcome for their client, she says.
