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Pfizer maintains business-as-usual for legal alliance as Rosenthal latest GC to depart

It was recognised at its 2009 inception as the most radical attempt to carve up the way bluechips instruct their external advisers within a fixed-fee network, but last week Pfizer confirmed Pfizer Legal Alliance (PLA) chief counsel and assistant general counsel Ellen Rosenthal is leaving, shortly in the wake of the departure of PLA pioneer, former general counsel Amy Schulman.

Rosenthal was instrumental in setting up the PLA alongside Schulman, who created the alliance that sees 19 law firms handle the lion’s share of Pfizer’s legal work on a flat-fee structure, in a still rare example of a move entirely away from the billable hour.

According to a spokesperson for Pfizer, the PLA will continue to operate as normal, commenting: ‘We are proud of the PLA’s success over the past five years and remain committed to building on its success. The PLA will continue to be an important part of how we manage our legal resources.’

Much to the envy of those who find that the success of legal networks depend on continued hard graft, the spokesperson added: ‘The Pfizer Legal Alliance has transformed from an innovative idea into a model legal community where collaboration thrives among our corporate legal team and our outside counsel. Thanks to its success and momentum, a high level of administrative oversight is no longer as necessary as when the community was being established. With an eye toward efficient allocation of resources, we have determined that we no longer need the full time role of chief counsel for the PLA. We thank Ellen Rosenthal for her valuable contributions to the PLA.’

However, the move is likely to be interpreted in the market as Pfizer scaling back on its commitment to the PLA, with Schulman understood to have been frustrated that similar initiatives have not been taken up within the pharma or wider in-house legal sector.

The network of 19 includes DLA Piper, Clifford Chance, White & Case and Skadden, Arps, Slate, Meagher & Flom – all of which are required to work together on a collaborative basis across many areas of Pfizer’s legal work for an annual fixed-fee regardless of the ebb and flow of work.

According to one partner at a network firm, the model works well, but he too expressed frustration that it has been difficult to replicate elsewhere, with US GCs generally missing the point, with comments such as: ‘Tell me about your rack rate and what discount you can give me. Is it 14% off? 15%? 16%?’

Schulman joined Pfizer in 2008 from her position as co-head of mass tort and class actions at DLA Piper. The star litigator was reportedly responsible for a $60m book of business and her exit came despite being named as head of vaccines, oncology and consumer healthcare business in July 2013, a post she was expected to assume in the New Year.

Rosenthal and Schulman’s resignation also follow that of assistant GC and head of government investigations, Gary Giampetruzzi, who joined the New York office of Paul Hastings in February as a partner in its compliance, investigations and enforcement practice.

The role of head of vaccines has been taken up by Albert Bourla, while Pfizer’s compliance chief Doug Lankler has stepped into the role of general counsel. Former associate general counsel Rady Johnson is now chief compliance and risk officer.

For more on the Pfizer project, see ‘Joined up thinking – GCs push to make collaboration more than a buzzword’