The cost of litigation can be prohibitively expensive. One way to curb
legal expenditures is by using a process called litigation management. This
process includes proactively identifying
critical legal and factual issues, identifying
key personnel that will be involved with a
case and determining a budget. Also, it is
important to set benchmarks so, as the
case progresses, a decision can be made as
to whether it should be tried or settled.
While no business person likes to be
sued, if it happens, he or she needs to know
— and is entitled to know — at the outset
what to expect from his or her attorney.
“It’s all about communication between a
lawyer and a client,” says Mark Morley, co-chairman, executive committee of Secrest
Wardle.
Smart Business spoke with Morley
about litigation management, how to prepare a litigation budget and how to determine whether to litigate or settle.
How should a company go about developing
an action plan with its legal team?
Good litigators work backwards, so to
speak, to determine what they need to
have, at the end of the day, in order to flat
out win the case or to minimize the plaintiff’s claims so it is manageable from a
monetary standpoint. In order to do that, it
is important to have a frank and open discussion with the client to get the necessary
facts; identify documents and determine if
these documents are readily accessible;
identify the key witnesses, including company employees, and their accessibility;
and identify which defenses are available.
It is important to set up your action plan
and then proceed to the point where you’re
going to start to implement the plan in
order to position the case for either settlement or eventual trial.
How should a litigation budget be prepared?
This involves the action plan being translated into specific required activities and
related ‘real world’ dollars and cents.
Lawyers have a pretty good feel for what it
takes to accomplish certain activities. You
can’t predict these things with absolute precision because, in all cases, you have at
least one other party involved who knows
what it wants to accomplish in the case,
and if it is a complex piece of litigation,
you’re going to have other defendants who
are initiating their own action plans over
which you have no control. That being
said, a lawyer can flesh out a projected
budget for the particular time frame in
question. There is no need to budget the
case in its entirety upfront. It is better to
work in a time frame of 90 to 120 days.
Then you measure yourself as you reach
the 90- to 120-day benchmark by asking
such questions as: Have we been able to
accomplish what we set out to do? If we
didn’t accomplish these goals, then why
not? What adjustments do we need to
make? If you do that on a regular basis,
every 90 to 120 days throughout the course
of the case, then you’re staying proactive
and in control of the litigation rather than
letting the litigation control you.
How should a business determine whether to
litigate or settle?
This decision will be the product of having prepared, implemented and followed a
proper action plan. In some instances, the
case may be simple enough that your attorney can give an evaluation almost at the
outset of what the potential of the case is.
In most cases, however, the attorney will
have to engage in some level of discovery
to obtain the facts necessary to provide a
sensible evaluation. Once the attorney can
project for the client the so-called ‘worst
case’ and ‘best case’ scenarios and where a
reasonable resolution of the case should
fall in monetary terms, then they can determine together how the litigation could conceivably impact the business and whether
settlement or trial is the better choice to
resolve the matter. The election between
the two then becomes an informed business decision.
If it is a case to settle, why is it so important
to develop negotiation strategies?
As with any business plan, if there is no
strategy in place, then events control you
and you do not control events. The client
needs to know what the claim is all about
and what are the strengths and weaknesses of the claim or defense. It is the job of
the lawyer to provide this information as
soon as he or she possibly can and to project what it is going to cost to achieve the
desired end result. Once you have this
information, there are several different
types of alternative dispute resolution
(ADR) available. Today, both facilitation
and mediation are commonly used as vehicles to bring closure to litigation without
having to invest any more dollars.
Facilitation and mediation allow the parties to have the discussion that is frequently necessary, in a semi-public forum using
the services of an independent facilitator
or mediator. In many instances, litigation is
about parties feeling that they have been
wronged in some way. They are looking for
the opportunity to tell somebody their side
of the story. Achieving that objective can
frequently lead to a reasonable resolution
of their grievances without having the case
go all the way through trial.
MARK MORLEY is co-chairman, executive committee
of Secrest Wardle. Reach him at (248) 539-2840 or
[email protected].
