Managing Litigation-Take An Active Approach

March 23, 2015

Take a hands on approach to litigation........I once worked for a company that prior to my joining had a policy of not managing the outside lawyers it used during trial. Its philosophy was that once the law firm or lawyer was conducting the trial, the law firm knew best what to do and what resources to use in order to achieve a successful outcome. What the company failed to realize was that its perception of a successful outcome was different than the law firm it retained to handle the trial. Not only that, but by using a hands off attitude, the company failed to keep a handle on costs and fees. I was surprised when during my first week managing the law department of a company I was presented with an substantial invoice from the law firm that handled the trial. The law firm obviously wanted its invoice to be paid. However, the fees and costs were out of control. I refused to pay the invoice and ended up negotiating a reasonable amount with the law firm ( hint: once a law firm realizes a lawyer or manager is actively looking at its invoices it becomes more agreeable when negotiating the bill). It behooves every company that is involved in litigation to actively manage and control the law firm that is handling the company’s litigation. It is all about management and costs!!

Litigation management depends upon the in-house legal team or risk manager actively assessing and managing litigation by using an effective litigation management process. Someone needs to manage the subcontractor’s work as well as keep a handle on its fees and costs. The litigation management process should utilize basic management processes as well as LRM tools. For a corporation to effectively manage litigation, management needs to understand its role as litigation manager. If it hands over the entire litigation management process to the outside firm representing it, the costs will, of course, substantially increase! The company needs to view itself as the prime contractor of a project and the law firm as a subcontractor. The law firm must be properly managed!

The risk manager, corporate manager, or in-house lawyer (General Counsel, etc.) must understand his or her role as a litigation manager. The in house legal team or manager overseeing the litigation must also know what the company views as a successful outcome. The company may not want to win at trial but settle during trial. The law firm needs to know what a successful outcome implies. Does the company want to win at all costs or negotiate a mutually agreeable settlement that stops the bleeding. Otherwise, the law firm may spare no expense in trying to win. Lawyers are trained to win- not to negotiate.  The in house counsel must consider his role as a litigation manager and use the risk management tools at his disposal. That includes use of management processes and LRM tools such as:

Management functions

• Effective coordination of legal defense efforts to avoid duplication of costs

• Coordination of use of witnesses and discovery

• Serve as the central site for all facts, positions, and decisions in legal issues

• Development and implementation of a defense plan

• Internal assessment of facts

• Point of contact for regulators

LRM tools

• Litigation budget

• Coordination of documents

• Use of employee interviews

• Insurance

• Use of defense plan

• Early case assessment

Using the above management processes and LRM tools will enable a company or the company's law department to keep tight control over any litigation it might encounter. Remember- its not only about victory but about managing costs.  The law firm will also appreciate the fact that the company is managing the litigation process as there is less of a chance that invoices will be challenged or that a dispute over fees and costs will erupt.

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