Use Your In-House Law Department to Manage Legal Risk

August 26, 2020

To properly manage civil litigation, especially in the United States, companies need to implement LRM strategies and processes by use of an in-house Law Department that is capable of overseeing or managing outside litigation. Depending on the legal exposure of a company, it can be a full-time job. This management function will be key in properly coordinating litigation to avoid excessive costs, duplication of effort, and minimization of disruptions to a company’s business, as well as setting an effective trial strategy.

What many foreign companies doing business in the United States fail to appreciate is that an outside litigation lawyer does not necessarily have the company’s best interests in mind during litigation. Litigators want to win. Sometimes the desire to win is not in the best interests of the company. Many companies have paid a great deal of money to litigate a case when a resolution to the dispute was available had the parties tried to actively settle the matter. Remember, a trial lawyer’s business and primary goal is to win- not to settle.

An in-house legal manager, representing the company’s best interests, can help facilitate settlement once a legal risk assessment as to the validity, cost, and expense of litigation is made. In fact, during trial, a settlement is still possible and can be facilitated by in-house counsel. Therefore, the Law Department should maintain control and oversight of any litigation. A LRM program can be very helpful in managing the legal risk process as well as providing litigation oversight. Remember, litigation can result in a variety of negative issues such as:

• Loss of time.
• Expense.
• Potential interruption of business.
• The cost and expense of business interruption.
• Potential bad or negative publicity.
• Negative impact on the company’s brand image
• Potential loss of reputation.

As companies facing U.S. litigation are often exposed to excessive fees and costs, massive business disruption, lengthy litigation, and the unpredictability of the jury system, efficient management of the litigation process is necessary. Though, obviously, outside litigation counsel is necessary in most cases, an in-house Law Department can save the company great sums of money by managing the litigation process. Such management involves the assessment, management, and potential transfer of risk through various LRM strategies, including:

-Effective coordination of legal defense efforts in order for the company to avoid duplication of costs and effort from case to case
-Coordination of witnesses, answers and interrogatory responses, documents, and depositions
-Acting as the central site for all facts, positions, decisions on legal issues, and motions
-Development, implementation, and coordination of a defense plan

As part of an overall LRM program, a company’s Law Department must implement processes to control, reduce, and manage outside legal fees and costs. By utilizing legal risk management tools, a Law Department can proactively reduce legal fees and costs.

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