Ways to Reduce Litigation Costs
Here are some ways to cut litigation costs:
1. Selecting Trial Counsel
The keys to successful, cost-effective litigation are preparation and litigation strategy. Who you select as lead counsel dramatically impacts your outcome. Use experienced trial lawyers, develop your litigation strategy, and plan your attack or defense before charging into the litigation battlefield.
On selecting trial counsel, choose experience and expertise over location. Today’s telecommunications and transportation make geographic distance between an attorney and client a lesser concern.
Referrals from recognized authorities in your industry are a great place to begin the lawyer selection process. Use Internet resources and searches to double-check for common denominators among the names you receive from the referrals. Check jury verdict reporters, as well as newspapers and journal articles to determine who has been successful in prosecuting or defending similar litigation claims. Then host a beauty pageant and let the attorney candidates demonstrate their wears. Some objective criteria in evaluating the candidates is their trial experience with favorable verdicts or settlements based on similar issues and dispute.
Other factors to take into consideration include trust and confidence in your counsel which is a cornerstone to a good attorney-client relationship.
2. Do Not Reinvent the Wheel
To avoid repeating the process and to save you time and expense on the learning curve, use approved outside counsel so you do not have to educate new counsel on your industry, company culture, company business, company products, corporate management structure and players, as well as competition.
By using approved outside counsel you can also leverage your buying power. Attorneys give discounts for volume so you would be in a position to negotiate alternative fee arrangements. Maintain litigation banks containing past pleadings, memorandums, briefs and legal research. Also, electronically scan discovery documents. Categorize and sanitize them from privileged, confidential and sensitive material.
Electronically maintaining the discovery document saves time and money in the review and reproduction processes. Delivering CD-ROMs in response to production to discovery request is less expensive than copying and shipping the documentation.
The lawyer or his or her law firm should be involved in compiling the litigation banks to preserve the attorney-client and attorney work product privileges. This will avoid the risk of having the opposition prevail on an argument that the privileges were waived by disclosure to or preparation by individuals not covered by the privilege. If the trial counsel uses individuals outside the law firm to compile the litigation banks then a confirming letter deputizing the individuals should be prepared.
3. Conduct Litigation Risk Analysis
Whether you are on the offensive or defensive, if litigation appears likely, a team of business executives and your attorneys need to perform a litigation risk analysis to determine the business and economic risk and rewards of litigating. This means forecasting the value and risk of litigating against the cost of litigating.
The litigating case analysis should address the probability of successfully litigating the claim, including any cross-claims or counter claims, stated in percentage terms; the dollar value of the claim at issue; an estimated budget to execute the plan; the strategic plan for litigating or alternative dispute resolution; and a recommended settlement value and exit strategy.
To facilitate the preparation of a litigation budget, the trial attorney can use the uniform task-based management system developed by the American Bar Association and the Association of Corporate Counsel. This is a set of number codes that breaks down litigation into phases, tasks within the phases and activities within the tasks.
The litigation team should continuously reassess the risk and value analysis and cost analysis at each critical stage of the litigation. This helps keep the litigation on track and goals in focus. If you have an addition to the quantifiable costs and risks associated with litigation, the team should take into consideration such issues as: l Does the company want public disclosure of facts such as sales figures and customer lists? l What is the potential for adverse publicity generated by the litigation? l How important is the litigation to the overall business strategy?
Some litigation related tasks can be performed less expensively by outsourcing them. Hire contract attorneys and paralegals to assist in discovery gathering, production and review. Additionally, legal research firms can prepare the research to support trial issues and dispositive motions.
5. Litigate Swiftly
Your company should aggressively defend or protect itself from claims. This reputation will help deter additional claims and reduce costs in the long run if the company develops a reputation as being aggressive. Pick and choose your fights carefully, but do not be afraid to use the judicial system.
6. Alternative Dispute Resolution
The team should always consider alternative dispute resolution as part of the litigation strategy. Negotiation, through mediation, nonbinding arbitration, binding arbitration, or other alternative dispute resolution method, provide an opportunity to develop business solutions to business problems.
In addition to the possibility of resolving the claim and avoiding trial, negotiations provide valuable information about the strength and weaknesses of your case and your opponent’s case. Furthermore, good faith effort to resolve the matter outside the court can make the corporation appear to be the reasonable party. This is a valuable attribute in dealing with courts.
Provided as an educational service by John Raymond Dunham, III, Esq..
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This publication is designed to provide accurate and authoritative information in regard to the subject matter covered and report on issues and developments in the law. It is not intended as legal advice, and should not be relied upon without consulting an attorney.