OUTSIDE COUNSEL BILLING AND STAFFING POLICY

Guidelines for Outside Counsel

Yahoo and its subsidiaries and affiliates (collectively, “Yahoo”) expect outside counsel to provide Yahoo with the highest quality of legal services in the most cost-effective manner. These Guidelines set out the principles by which Yahoo and outside counsel can achieve these objectives.

  1. Scope and Applicability of the Guidelines

    These Guidelines set out the policies and procedures governing the relationship of Yahoo with outside counsel. Outside counsel performing any type of legal services for Yahoo may depart from these policies and procedures only with the express prior written approval of the lead inside counsel assigned to the matter. Questions concerning these Guidelines should be directed to the lead inside counsel.

  2. Lead Yahoo Counsel

    In any attorney-client relationship, the client is responsible for making all substantive decisions about the matter. Accordingly, for each engagement, Yahoo will designate a lead inside counsel responsible for the matter and for participating fully in it. The lead inside counsel will identify key objectives, approve all financial terms (such as rates, budgets and fee arrangements), delegate responsibilities to other inside counsel, and coordinate contact with all other Yahoo personnel as well as keep such personnel current on the matter. Lead inside counsel also will monitor pertinent business issues and developments related to the matter. To carry out these responsibilities effectively, it is essential that outside counsel advise lead inside counsel promptly of all significant matter developments, consult with lead inside counsel sufficiently in advance of when any significant decision must be made so that a meaningful opportunity to direct that decision is provided, allow ample time for lead inside counsel to participate in the drafting and review of all significant documents, and consult with lead inside counsel prior to making any significant staffing decisions.

  3. Law Firm Engagement and Staffing
    1. Equal Opportunity

      Yahoo is committed to increasing diversity in the legal profession.

      United States Legal Professionals:

      Yahoo requests that firms provide diversity-related information for their U.S. timekeepers in our e-billing system. These fields must be completed to submit timekeeper rates and to bill timekeepers’ time on invoices.

      International Legal Professionals:

      Yahoo is committed to complying with GDPR and other privacy laws, regulations or directives. All firms, whether they are headquartered in the United States or internationally, agree to refrain from providing individual level diversity or demographic information for their internationally based legal professionals.

    2. Master Retention Agreement and Engagement Letter

      All firms must agree to Yahoo’s Master Retention Agreement and provide Yahoo with a Fee Card detailing the fee arrangement that will apply to Yahoo matters. Some matters may have matter or work area specific rates. Matters that deviate from the rate structure agreed to in the Fee Card must be memorialized on Yahoo’s form of Engagement Letter. Acceptance of these Guidelines by outside counsel is required by our e-billing system for bills to be processed and paid.

    3. Staffing

      Efficient staffing is a necessary part of obtaining and continuing to obtain work from Yahoo. Even for the most significant matters, this usually means small teams, few timekeepers, relatively few associates and legal assistants, and little turnover among team members. At the outset of the engagement, the lead inside counsel will, in consultation with the firm, determine the appropriate staffing, including the specific timekeepers that will be working on the matter based on expertise, experience, billing rates and diversity. The lead inside counsel and the law firm also will designate a lawyer on the matter to serve as the lead outside lawyer. The lead outside lawyer must be personally and directly involved in the representation. He or she is responsible for assuring that Yahoo’s objectives for the engagement are met.

      The lead inside counsel must approve all timekeepers before they may bill on a matter. Yahoo will only pay for charges billed by timekeepers approved by the lead inside counsel. Once the team is established, Yahoo expects continuity of staffing for the duration of the engagement, absent extraordinary circumstances.

      Unless approved in advance by the lead inside counsel, Yahoo will not pay for:

      • Learning time required by the substitution of attorneys or legal assistants working on the engagement;
      • Training expenses, such as attending seminars or time spent learning new systems;
      • More than one attorney attending events such as depositions, court appearances, joint defense group meetings, witness meetings, settlement conferences, and office meetings;
      • Clerical, technical support, and office support, such as maintaining document files or databases, preparing binders, locating library materials, indexing pleadings, and opening and closing files;
      • Expenses related to publications, subscriptions, library services, online research databases, or other miscellaneous or sundry expenses;
      • Team meetings to which the lead inside counsel is not invited to attend;
      • Time spent on conferences, coordination, prepping, redundancies, and communications caused by inefficient staffing;
      • Legal research memos or other documents prepared without our express prior approval;
      • Time spent on budgeting (including accruals gathering and input), addressing conflicts, responding to audit inquiry letters, and providing information required for our tracking of diversity statistics;
      • Late fees, interest, bank fees, or penalties of any kind; or,
      • Document scanning, storage, hosting, processing, copying, and printing.

      Outside counsel may engage additional service providers, such as document managers, translators, consultants, experts, accountants, or other lawyers, only with the express prior approval of lead inside counsel. Outside counsel will be responsible for any excess amount billed over budget that is not approved in advance by the lead inside counsel. Yahoo may select service providers directly, and where it does so, outside counsel will work with and use Yahoo’s preferred providers for Yahoo matters. Further, Yahoo primarily uses its own in-house personnel and technology for the collection, processing, hosting, storage, and in many cases review of electronic documents and discovery. Unless directed otherwise by the responsible Yahoo inside counsel in writing, outside counsel should not incur time or expenses for any of these services on any Yahoo matters.

  4. Compensation

    1. Types of Fee Arrangements

      Yahoo encourages outside counsel to propose alternative fee arrangements, including fixed or flat fees, discounts, performance-based fees, risk-sharing, contingent fees, and other approaches. Yahoo strongly prefers a negotiated fixed or capped fee arrangement for substantial matters. In all cases, the terms on which Yahoo will be charged for the representation will be set forth in writing both at the outset of the engagement and at any point in the engagement at which those terms are modified.

      All fee arrangements must be documented on a Fee Card in the Master Retention Agreement or an Engagement Letter. Unless otherwise specified, fees are fixed for two (2) years or the life of the applicable matter, whichever is longer. After the initial two year period, Yahoo may, at its discretion, allow for a rate increase not to exceed the percent increase in the United States Consumer Price Index.

    2. Hourly Rates

      Yahoo expects to be billed the agreed upon rate in increments of 1/10th of an hour. Block billing is not permitted. In addition, Yahoo expects that outside counsel will charge for services at net billing rates that are no higher than those charged to other clients of the firm, excluding not-for-profit or pro bono clients.  

      Shadow Billing

      For fixed fee or other alternative fee arrangements, Yahoo may ask firms to submit shadow invoices as if the firm were billing on a traditional hourly rate arrangement. Invoices should include a narrative of the work completed at the firm's market rate billed in increments of 1/10th of an hour.

    3. Billing – Budgeting

      Budgets are essential to plan and manage legal expenses effectively. Yahoo requires a budget for every substantial matter and, as noted above, strongly favors negotiated fixed or capped fees. Outside counsel will charge only those fees and expenses that are consistent with budgets approved in advance by the lead inside counsel. If unexpected changed circumstances require a budget adjustment, a written request should be submitted to lead inside counsel with a detailed explanation of why the adjustment is needed. Outside counsel are expected to update budgets whenever necessary without a reminder from inside counsel.

    4. Billing – Timing and Contents

      Bills should be rendered monthly, no later than 60 days after the end of the month in which the services were rendered. Bills should include a list of reimbursable expenses by category as well as a statement by lead outside counsel that charges for fees and expenses comply with these Guidelines. Yahoo does not fund in advance either legal fees or expenses. Yahoo, at its discretion, may require that outside counsel use ABA-UTBMS (Uniform Task-Based Management System) task, activity and expense codes. Yahoo requires firms to submit invoices electronically through a Yahoo designated e-billing system and all invoices must be submitted in LEDES (Legal Electronic Data Exchange Standard) format. Invoices must comply with Yahoo’s current e-billing guidelines and procedures.

      Yahoo will not pay for fees or expenses that are not billed on a timely basis or in the agreed-upon format. At its discretion, Yahoo reserves the right to reject invoices that are submitted late, and in no circumstances will Yahoo pay invoices from the previous year for services that were performed more than six months prior.

      Yahoo expects that bills will reflect the billing judgment of the lead outside counsel with respect to the quality and efficiency of the services rendered. Yahoo reserves the right to request copies of the firm’s billing records and supporting documentation with respect to charges to it and to conduct audits of the bills.

      All invoices must be reviewed and approved by Yahoo’s Legal Department before submission to Yahoo’s Accounts Payable. Yahoo will use good faith efforts to ensure that undisputed LEDES bills submitted through e-billing will be reviewed within thirty (30) days after they are posted. You will not be entitled to charge any late fees or penalties under this Agreement. We understand that you may desire to have expedited payment of large invoices at the end of the calendar year or your fiscal year. While we will endeavor to expedite such payments, we cannot commit to payment terms in deviation of our standard policy.

  5. Expenses & Disbursements

    Yahoo will reimburse outside counsel only for actually incurred out-of-pocket expenses with no mark-up, provided those expenses are reasonable and comply with the Guidelines set forth below. Any exception to this rule requires express prior approval by the lead inside counsel. Yahoo expects outside counsel to use its best efforts to minimize reimbursable out-of-pocket costs both by avoiding unnecessary expenditures and by taking advantage of volume discounts and bulk arrangements that may be available. For non-travel related expenses, Yahoo requires written pre-approval by the lead inside counsel of any expense exceeding $1,000.

    1. Travel

      Alternatives to travel such as conference calls or videoconferences are strongly encouraged and should be used by outside counsel whenever practicable. If travel is required, it must be approved by the lead inside counsel in advance. Yahoo does not pay for travel time unless work is performed on the matter during the travel itself. Unless authorized expressly and in advance by the lead inside counsel, Yahoo will only pay for coach airfare and mid-size rental cars.

    2. Meals and Accommodations

      If travel is approved by inside counsel, Yahoo expects its counsel to use good judgment in selecting hotels and restaurants. Personal and incidental expenses incurred while traveling are not reimbursable and must be distinguished from those expenses that are appropriately charged to Yahoo. Yahoo will not pay for meals or other incidental expenses (including taxis or rideshares home) for attorneys or staff members when they are working in their normal office location. Yahoo will pay for meals when its counsel travel for work on Yahoo matters but it expects counsel to limit reimbursable meal expenses to $100 per day total. Meal expenses submitted to Yahoo that exceed that amount will be reduced accordingly.

    3. Non-Reimbursable

      Yahoo considers such costs as rent, supplies, support staff salaries and overtime, computerized legal research, word and document processing, librarian assistance, telephone and communications charges, and photocopying to be firm overhead. These expenses are not reimbursable.

  6. Public Comment

    Unless expressly approved by the lead inside counsel, Yahoo does not authorize outside counsel to offer media or other public comment on Yahoo matters. Any inquiries or proposed public comment about a Yahoo matter must be referred to the lead inside counsel or to a designated Yahoo public affairs specialist.

  7. Other Clients

    For purposes of the rules of professional conduct barring or limiting an attorney’s representation adverse to the interests of existing or former clients, representation of “Yahoo” includes Yahoo and its subsidiary, parent, and affiliate companies and all corporations, partnerships, joint ventures or other entities controlled, directly or indirectly, by Yahoo (“Affiliates”), and all such entities should be treated as the clients of any outside counsel providing services to any one of such businesses, entities, or affiliates. See American Bar Assoc., Standing Committee on Ethics and Professional Responsibility, Formal Op. No. 95-390 at 5 (Jan. 25, 1995). A list of current Affiliates can be obtained on request from the lead inside counsel. Outside counsel should assume that any entity with a business or domain name containing “Yahoo,”  “AOL, “Apollo,” “Rivals.com,” “Flurry” or “Boundless” is an Affiliate, unless confirmed otherwise by Yahoo.

    Requests for waivers of potential or actual conflicts of interest will be considered on a case-by-case basis. Yahoo will not provide blanket waivers and all prior blanket waivers are hereby revoked. Waiver requests should be directed to the appropriate lead inside counsel and should include a complete list of the matters currently being handled by the requesting outside counsel for Yahoo, the identity of each Affiliate involved in those matters, and the identity of lead inside counsel for those matters.

    Any waiver granted by Yahoo must be in writing and will be conditioned upon (i) outside counsel’s other client providing a written agreement of waiver, acceptable to Yahoo, that it will not object to outside counsel’s continued representation of Yahoo; (ii) and agreement, if the firm is required to recuse itself, to cooperate with Yahoo, at outside counsel’s own cost and expense, in the selection and transfer of the Yahoo matter to new counsel; (iii) the establishment of ethical and physical walls to prevent the commingling of knowledge and information concerning Yahoo and the other client; and (iv) an agreement by outside counsel not to represent the other client in any litigation or other adversary proceeding against Yahoo. An illustration of a letter confirming the waiver of a potential conflict of interest can be obtained from the lead inside counsel. To the extent Yahoo grants a waiver subject to a limitation on the scope of the firm’s proposed representation of the other client, the limitation must be communicated clearly in writing to the other client at the commencement of the engagement for that client, acknowledging the limitation could require the firm to withdraw later from that engagement.

    Yahoo generally will not waive a conflict or potential conflict where representation of another client will involve the assertion of any type of claim against Yahoo. Potential claims of alleged fraud, misrepresentation, or other dishonest or improper conduct are especially inappropriate for proposing a waiver. In addition, a waiver ordinarily will not be granted if the subject of the conflicting representation involves substantially the same matter in which the firm has represented Yahoo. Nor will a waiver be granted if the firm’s access to Yahoo confidential information, including Yahoo’s business and litigation strategies, potentially could be useful to the other client.

    If outside counsel anticipates that representation of another client will involve advancing a position on a legal issue which may be materially opposed to Yahoo’s interests, outside counsel shall, to the extent reasonably practicable and consistent with that outside counsel’s confidentiality obligations to other clients, bring the matter to Yahoo’s attention in advance.

  8. Insurance

    Yahoo requires that outside counsel carry professional liability insurance coverage that is commercially reasonable in relation to the type and size of matters counsel is handling or proposes to handle.

  9. Ownership of Materials

    All materials in written, graphic, electronically stored or other form generated or prepared in the course of representing Yahoo, and all copyrights therein, shall vest solely in Yahoo. Outside counsel agrees to assign, and upon execution of an engagement letter does assign, all right, title, interest and copyrights in all such materials to Yahoo and agrees to execute all papers necessary for Yahoo to perfect its ownership and copyright interests. At the conclusion of the engagement, outside counsel should obtain direction from the lead inside counsel regarding disposition of all such materials.