How to Manage Your Litigation Costs

How long would your company stay in business if it sold a lesser product at higher prices? So why should you accept this when it comes to your litigation matters? In-house counsel and the companies they represent have lately become increasingly outraged at the bloating of litigation bills, but some of the proposed solutions they are trying (fixed fees, convergence hiring) are mere chewing gum in the dyke. For instance, how comfortable are you going to be if under a fixed fee arrangement your outside counsel has already reached the fee ceiling in month nine out of 12?

Short of having your outside counsel work on a 100% contingent basis ' not a bad idea by the way in many cases (particularly ones where your company is a plaintiff), and something that will be discussed in the third article of this series ' there is only one sure way to lower litigation costs: In-house counsel must demand a better lower priced product. It is not enough to set flat fees or create litigation budgets. In-house counsel must learn how to proactively manage their outside counsel ' in the trenches so to speak.

But in order to achieve this end, those in the C-Suite and their corporate counsel are going to have to change the way they approach their litigation matters ' from the selection of counsel to monitoring the litigation as it progresses. This article is the first in a series of articles that discuss how you can begin to rein in litigation costs and achieve better results.

There are no magic bullets, and some of the current marketing darlings are neutral at best (using computerized document review programs) and others are outright dangerous (outsourcing document review offshore). Simply stated, these tacks avoid confronting the real problem.

The real problem is that over the last three decades, as big case litigation has boomed and legions of lawyers now claim to be complex litigators ' everyone on both sides of the equation (in-house counsel and outside counsel) have come to take the label literally ' that complex litigation means big, complicated and proportionately (if not exponentially) more expensive. Nothing could be further from the truth.

Why Litigation Teams Must Be Small

Here is the rule to live by in all cases big or small: Litigation is a dish served lean ' at least if you want to achieve the best result.

The best litigators, be they complex or not, know that the strongest winning position is one that is simple, direct, and understandable. These same principles apply to how in-house counsel should approach litigation management.

Why? Because the nature of the process actually demands it. No matter the subject of the litigation, every case gears itself to the same key moments ' arguments before the court on motions, depositions, and in some instances even a trial. These are the case critical moments where cases are won or lost.

Yet, at each one of these case critical moments, in the normal course, no matter how many lawyers may or may not be in the background, each side will have only one lawyer acting and speaking on its behalf. That's it the focal point, the fulcrum will always be one lawyer.

In other words, these case critical moments are great levelers. One side may have two lawyers working on the case and the other side may have one hundred. But when it comes to these critical moments, unlike military combat (where there may be strength in numbers), it makes no difference. The lawyer who is best prepared will do the best job for his or her client. So the question becomes, how best to prepare the lawyer representing you in these case critical moments?

Less Is More

Think Delta Force, not army regiment. The myth behind the current paradigm, at least the one espoused by many large firms, is that somehow the litigation team with the most lawyers will have the best prepared point lawyer ' that more lawyers means that more stones can be unturned and their lead lawyer will be the best prepared.

As a result, most large law firm litigation teams, particularly in high- stakes matters, are pyramided like large audit firms. The lead partner is at the top, and underneath are various layers of subordinates ' with the layers increasing in size as the litigation increases in size. The lead partner directs the forces like a general but ' under guise of saving litigation costs ' rarely roles up his or her sleeves and does any digging or living in the trenches.

It is the rare lead partner who participates in initial research or initial drafting of a brief, let alone participates in such things as the initial document review process. Rather, these tasks are performed by subordinates and the results are funneled up to the lead partner.

Yet who would you prefer arguing a motion on your behalf in court ' a lead partner who has actively been involved in the research and drafting of the brief from the start. or a lead partner who merely swoops in at the end to edit the product generated by subordinates? Who would you prefer cross examining your opposing side's witnesses ' a lead partner who has become thoroughly familiar with the documents because he or she has swam in them, or one who has been fed the key documents found by less experienced subordinates?

The lawyer who has a greater tactile feel for the case is going to be the better prepared lawyer at the key case moments. Remember the telephone game and how the message changed by the time it made its way around the circle? This same principle applies as your litigation team grows and the lead partner is further distanced from the trenches. The bigger the team gets the more risk that the lead partner doesn't get the message just right. And not getting it just right, particularly in a high-stakes matter, can cost you lots of money.

Yet, you might ask, 'How is this going to save money ' having the lead partner who presumably has the highest billing rate actively working the case and doing seemingly menial tasks?' This is a myth that has been propagated by firms and senior partners whose economic interests require pyramiding.

Drafting briefs and reviewing documents are not menial tasks. Who knows better how to articulate what should be said in a brief than the person who is going to argue it in court ' someone who has presumably done this for years? Who knows better than someone who has conducted hundreds of witness examinations, which documents actually mean something upon seeing them during a review session and can: 1) immediately map how they might be used during an examination; and 2) immediately direct the team to look for similar documents?

It also saves you money. There is a reason [or at least there should be] why senior partners are billed at higher rates. It is not because they are smarter than their junior counterparts, it is because they are more experienced and therefore more efficient. They know what works and they know what doesn't. Having them in the trenches with their sleeves rolled up working with the team means the team quarterback is there to give immediate guidance ' keep the team on course and keep the team working efficiently.

Thus, the most efficient litigation team and the one that produces the better result, regardless of the matter involved, is one that is small and leveled ' with everyone doing the heavy lifting together. Again, think Delta Force versus army regiment.

A Rule of Thumb

Here is a rule of thumb that will serve you well ' with few exceptions, virtually every case can and should be staffed with one to no more than five lawyers. Large document cases may require a few more but in such cases judicious use of paralegals can also streamline matters.

When litigation teams get any larger they become unwieldy and inefficient. People go off on larks. The right hand doesn't know what the left is doing and, most important, the distance between the lead partner and the lowest subordinates becomes greater. In short, once a litigation team becomes too large, the ability to work together and communicate is anything but simple, direct and understandable.

Use the Carrot to Get What You Want

So how do you, as in-house counsel, get outside counsel ' who thrive on the pyramid paradigm ' to change their ways? You have the carrot: You control who gets your business. If the case is a high stakes matter, demand that the senior partner assigned to your case make the commitment that it will be one of their top if not the top priority on their docket. Demand that the litigation team be clearly defined, specifically identified and above all small. If you get push back, take your business elsewhere.

Despite its name, complex litigation is not so complicated that it requires you to hire the superstar lawyer or mega law firm solely for their name recognition. Those in the C-Suite and in-house counsel who realize this are going to save money and secure better results. With the exception of a handful of lawyers, there is no one who is so great or so essential that you absolutely need them to prevail. If they are not going to give you the focused attention that you need and are entitled to, you are better off hiring the one who is. Your company's customers would do the same.

Next: Selecting the right person to monitor outside counsel.

Stewart M. Weltman is the principal in the Chicago-based Weltman Law Firm. He focuses on assisting litigation teams. Until recently Weltman was a senior partner at one of the nation's premier plaintiffs' complex litigation boutiques. He can be reached 312-606-8756 or [email protected].

This is the first in a series of articles discussing how in-house counsel can better manage litigation matters.

If your corporation is like most, you have seen your legal costs and, in particular, your litigation costs soar over the last decade. For over 29 years I have practiced as a complex litigator, many times suing companies like yours. I have seen the bloat from the other side of the table. A party having multiple lawyers at a deposition that they are neither taking nor defending. Four or five lawyers appearing for one party at a hearing on a motion. Deposition programs that include meaningless witnesses numbingly questioned over irrelevancies.

It has never ceased to amaze me that when it comes to hiring and thereafter properly monitoring outside litigation counsel ' particularly in high-stakes matters ' corporations, who take great pride in thriving in a free market system where their customers are continually pounding them for lower prices, keep on overpaying for what they are getting.

How long would your company stay in business if it sold a lesser product at higher prices? So why should you accept this when it comes to your litigation matters? In-house counsel and the companies they represent have lately become increasingly outraged at the bloating of litigation bills, but some of the proposed solutions they are trying (fixed fees, convergence hiring) are mere chewing gum in the dyke. For instance, how comfortable are you going to be if under a fixed fee arrangement your outside counsel has already reached the fee ceiling in month nine out of 12?

Short of having your outside counsel work on a 100% contingent basis ' not a bad idea by the way in many cases (particularly ones where your company is a plaintiff), and something that will be discussed in the third article of this series ' there is only one sure way to lower litigation costs: In-house counsel must demand a better lower priced product. It is not enough to set flat fees or create litigation budgets. In-house counsel must learn how to proactively manage their outside counsel ' in the trenches so to speak.

But in order to achieve this end, those in the C-Suite and their corporate counsel are going to have to change the way they approach their litigation matters ' from the selection of counsel to monitoring the litigation as it progresses. This article is the first in a series of articles that discuss how you can begin to rein in litigation costs and achieve better results.

There are no magic bullets, and some of the current marketing darlings are neutral at best (using computerized document review programs) and others are outright dangerous (outsourcing document review offshore). Simply stated, these tacks avoid confronting the real problem.

The real problem is that over the last three decades, as big case litigation has boomed and legions of lawyers now claim to be complex litigators ' everyone on both sides of the equation (in-house counsel and outside counsel) have come to take the label literally ' that complex litigation means big, complicated and proportionately (if not exponentially) more expensive. Nothing could be further from the truth.

Why Litigation Teams Must Be Small

Here is the rule to live by in all cases big or small: Litigation is a dish served lean ' at least if you want to achieve the best result.

The best litigators, be they complex or not, know that the strongest winning position is one that is simple, direct, and understandable. These same principles apply to how in-house counsel should approach litigation management.

Why? Because the nature of the process actually demands it. No matter the subject of the litigation, every case gears itself to the same key moments ' arguments before the court on motions, depositions, and in some instances even a trial. These are the case critical moments where cases are won or lost.

Yet, at each one of these case critical moments, in the normal course, no matter how many lawyers may or may not be in the background, each side will have only one lawyer acting and speaking on its behalf. That's it the focal point, the fulcrum will always be one lawyer.

In other words, these case critical moments are great levelers. One side may have two lawyers working on the case and the other side may have one hundred. But when it comes to these critical moments, unlike military combat (where there may be strength in numbers), it makes no difference. The lawyer who is best prepared will do the best job for his or her client. So the question becomes, how best to prepare the lawyer representing you in these case critical moments?

Less Is More

Think Delta Force, not army regiment. The myth behind the current paradigm, at least the one espoused by many large firms, is that somehow the litigation team with the most lawyers will have the best prepared point lawyer ' that more lawyers means that more stones can be unturned and their lead lawyer will be the best prepared.

As a result, most large law firm litigation teams, particularly in high- stakes matters, are pyramided like large audit firms. The lead partner is at the top, and underneath are various layers of subordinates ' with the layers increasing in size as the litigation increases in size. The lead partner directs the forces like a general but ' under guise of saving litigation costs ' rarely roles up his or her sleeves and does any digging or living in the trenches.

It is the rare lead partner who participates in initial research or initial drafting of a brief, let alone participates in such things as the initial document review process. Rather, these tasks are performed by subordinates and the results are funneled up to the lead partner.

Yet who would you prefer arguing a motion on your behalf in court ' a lead partner who has actively been involved in the research and drafting of the brief from the start. or a lead partner who merely swoops in at the end to edit the product generated by subordinates? Who would you prefer cross examining your opposing side's witnesses ' a lead partner who has become thoroughly familiar with the documents because he or she has swam in them, or one who has been fed the key documents found by less experienced subordinates?

The lawyer who has a greater tactile feel for the case is going to be the better prepared lawyer at the key case moments. Remember the telephone game and how the message changed by the time it made its way around the circle? This same principle applies as your litigation team grows and the lead partner is further distanced from the trenches. The bigger the team gets the more risk that the lead partner doesn't get the message just right. And not getting it just right, particularly in a high-stakes matter, can cost you lots of money.

Yet, you might ask, 'How is this going to save money ' having the lead partner who presumably has the highest billing rate actively working the case and doing seemingly menial tasks?' This is a myth that has been propagated by firms and senior partners whose economic interests require pyramiding.

Drafting briefs and reviewing documents are not menial tasks. Who knows better how to articulate what should be said in a brief than the person who is going to argue it in court ' someone who has presumably done this for years? Who knows better than someone who has conducted hundreds of witness examinations, which documents actually mean something upon seeing them during a review session and can: 1) immediately map how they might be used during an examination; and 2) immediately direct the team to look for similar documents?

It also saves you money. There is a reason [or at least there should be] why senior partners are billed at higher rates. It is not because they are smarter than their junior counterparts, it is because they are more experienced and therefore more efficient. They know what works and they know what doesn't. Having them in the trenches with their sleeves rolled up working with the team means the team quarterback is there to give immediate guidance ' keep the team on course and keep the team working efficiently.

Thus, the most efficient litigation team and the one that produces the better result, regardless of the matter involved, is one that is small and leveled ' with everyone doing the heavy lifting together. Again, think Delta Force versus army regiment.

A Rule of Thumb

Here is a rule of thumb that will serve you well ' with few exceptions, virtually every case can and should be staffed with one to no more than five lawyers. Large document cases may require a few more but in such cases judicious use of paralegals can also streamline matters.

When litigation teams get any larger they become unwieldy and inefficient. People go off on larks. The right hand doesn't know what the left is doing and, most important, the distance between the lead partner and the lowest subordinates becomes greater. In short, once a litigation team becomes too large, the ability to work together and communicate is anything but simple, direct and understandable.

Use the Carrot to Get What You Want

So how do you, as in-house counsel, get outside counsel ' who thrive on the pyramid paradigm ' to change their ways? You have the carrot: You control who gets your business. If the case is a high stakes matter, demand that the senior partner assigned to your case make the commitment that it will be one of their top if not the top priority on their docket. Demand that the litigation team be clearly defined, specifically identified and above all small. If you get push back, take your business elsewhere.

Despite its name, complex litigation is not so complicated that it requires you to hire the superstar lawyer or mega law firm solely for their name recognition. Those in the C-Suite and in-house counsel who realize this are going to save money and secure better results. With the exception of a handful of lawyers, there is no one who is so great or so essential that you absolutely need them to prevail. If they are not going to give you the focused attention that you need and are entitled to, you are better off hiring the one who is. Your company's customers would do the same.

Next: Selecting the right person to monitor outside counsel.

Stewart M. Weltman is the principal in the Chicago-based Weltman Law Firm. He focuses on assisting litigation teams. Until recently Weltman was a senior partner at one of the nation's premier plaintiffs' complex litigation boutiques. He can be reached 312-606-8756 or [email protected].