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"The Legal Member of Your Business Team"

Managing Outside Counsel and Litigation Costs

Resolving disputes by litigation is time-consuming, costly and inefficient.  To remain competitive, avoid litigation through the provision of well-managed, quality products and services, open and timely communications, experienced legal advice, and prompt attention to early dispute resolution. 

Where litigation is unavoidable, conduct your litigation in a cost effective manner and pursue alternative dispute resolution proceedings which may result in faster, cheaper and no less detrimental results than litigation.  The courts should truly be your last resort, absent special circumstances. 

You, your corporate attorney, or other responsible manager, should be assigned to manage your large claims and litigation.  Guidelines like those below will assist you to effectively manage your outside lawyers.  Compliance with your guidelines will determine which lawyers are retained by you in the future. 

Outside Lawyer Guidelines: 

1.     General Approach.   Go for the heart of the matter.  Strip away the inessentials and constantly consider ways to narrow your case to your strongest issue(s).  Do not waste time and money on areas or issues which are unlikely to affect the final result.  Drop contentions of dubious merit, rather than wasting your resources proving or defending them.  Actively and constantly support reasonable settlements and alternative dispute resolution approaches. 

Your lawyers should quickly provide you a written report outlining the substantial issues, their strengths and weaknesses, their probabilities of success, and the probable range of exposure to you in dollars, additional litigation, unfavorable precedents, and the applicability of various alternative dispute resolution techniques.  This report should be updated periodically. 

2.     Control Staff.  One lawyer should be responsible, take a "hands on" approach, stay on top of the case from "day one", read the documents, take the depositions, and regularly discuss the status of the case with your firm.  Without approval, only one lawyer should attend each deposition, hearing, meeting and the like.  Other lawyers and paralegals should be brought into the case only as needed and only after obtaining your approval.  Subscribe to the "1-1-1 Rule", i.e. one partner, one associate, and one paralegal deployed in the most cost effective manner.  Do not pay for the costs of bringing replacement lawyers or staff members "up to speed". 

3.     Use Firm Personnel.  Your firm can perform many litigation tasks more efficiently than outside lawyers, such as (1) search for documents, (2) contact, schedule and interview internal witnesses, (3) assist in preparation of interrogatory answers, and (4) research facts.  Your firm will have familiarity with particular aspects which might take your lawyers substantially more time to attain on their own. 

4.     Attempt Early Settlement.  Early settlements often are as good as or better than those ultimately reached after exhaustive discovery and procedural battling.  Even if you do not settle early, you should periodically evaluate the case for settlement.  If you are named in a lawsuit simply as another deep pocket, have your lawyer immediately examine every relevant document to determine if there is any reasonable basis to tender defense of the lawsuit to another party. 

5.     Alternatives to Litigation.  Your outside lawyer should recommend an alternative dispute resolution (ADR) approach.  ADR will not be applicable to all cases, but your firm should have a strong bias toward settling disputes through ADR.  Alternatives include mediation, arbitration, mini-trials, and others.  You should include language in your contracts and purchase orders requiring mandatory ADR proceedings before any party may bring suit against you.  ADR will narrow claims, surface true issues, and motivate reasonable settlement sooner, even if ADR does not itself resolve the dispute. 

6.     Eliminate Delays.  Pursue each case aggressively, unless circumstances clearly show otherwise.  You want to make clear to your adversaries and the courts that you intend to move the case to ADR or trial as quickly as possible.  You want to pressure your adversary to (1) settle, (2) simplify, (3) accelerate their preparation, and (4) reduce your litigation costs. 

7.     Avoid Procedures of Limited Impact.  Court motions should be evaluated in light of the overall strategy of the case, additional costs and delays, and whether the motion really will determine the outcome. 

8.     Reduce Discovery Costs.  Discovery disputes delay litigation and drive up costs.  Your lawyer should establish a good working relationship with opposing counsel; reduce formalities, and exchange documents and information with a minimum of paperwork and arguments.  Opposing counsel who abuse discovery should be brought before the courts, which are becoming more intolerant of discovery abuse.  Only necessary and focused depositions and interrogatories should be taken.  All parties should concede and stipulate to essentially undisputable facts and legal positions. 

9.     Use New Technologies.  Letters cost money.  Use email.  Send documents for electronic comment and editing.  The use of “revision mode” allows everyone to immediately see any changes. 

10.     Billing Particulars.  Manage your dispute resolution costs carefully, as any sophisticated, business client should.  Require your legal billings to be regular and in sufficient detail to allow you to review what specific services were being provided.  While attorneys should profit from their hours spent, they should not profit from reimbursable costs, nor should normal overhead be billed. 

Work with experienced corporate counsel to develop litigation guidelines and to actively manage substantial claims and litigation on your behalf.  Reduced litigation will allow you to focus on your business and benefit your firm’s bottom line.

Caveat: The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of my knowledge as of the date of the article. I have no duty to update this article. The information, examples and suggestions presented in this article have been developed from sources believed to be reliable. This article should not be viewed as a substitute for the guidance and recommendations of a retained professional and should not be construed as legal or other professional advice. In addition, I do not endorse any actions addressed herein, unless they are produced or created by me.  I recommend consultation with me or other competent legal counsel and/or other professional advisors before applying this material to any particular factual situations.

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©2002-2014 Bruce Leonard Beal
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Questions to ask Beal Business Law
Is litigation the most expensive way to resolve disputes?
What is the easiest way to stay out of litigation?
Should courts be our last resort?
How do we keep litigation cost effective?
Can we actually manage our outside lawyers?
Are there guidelines for managing outside counsel?
Can our firm perform some of the litigation tasks more efficiently?
Are early settlements often as good as or better
than those ultimately reached after extensive litigation?
What are the alternatives to litigation?
What is the difference between mediation and arbitration?
Is arbitration always cheaper than litigation?
May we require legal billings to be regular and
in sufficient detail to allow us to review the specific services?