What are the best ways for corporate law departments to keep a handle on outside litigation costs? GC California asked several general counsels and other senior in-house lawyers around the state for their suggestions
First and foremost, it's all about early dispute management and insisting that your outside counsel have a plan toward resolution of the case. Barring anything truly unusual (and most cases are not), that plan should be put together and reviewed by in-house counsel within 30 days of a case being assigned to an outside attorney.
When I say a plan, I don't mean the usual rigamarole of "first we file a motion to attack the pleading, then we send out all the written discovery we can think of, etc." That tired play book should have been retired a long time ago. Rather, it's all about thorough early assessment and a creative resolution plan. Is your position as good as you think? If so, outside counsel should be engaging the other side as soon as possible to cut through the litigation process, show what you've got and, if they don't go away, push the case to one form of alternative dispute resolution or another.
Second, insist that your outside counsel actively engage in an ongoing dialogue with the other side. And none of those nasty letters, useless e-mail exchanges and "I'll talk to them in court" excuses. Sorting out the basic facts of a case as soon as possible not only clarifies strengths and weaknesses, but also typically narrows the scope of the dispute. And the earlier you do it, you not only save litigation costs but have many more options to explore to resolve your dispute.
Finally, fire any attorneys who make excuses why they can't or don't want to do #1 or #2. You'll fire them eventually, probably after they present you with an extravagant bill for something that could have been resolved quickly and efficiently. Cut the cord now. It will save your company money and your sanity.
-- Mark LeHocky
GC, Ross Stores
There is no better way to manage litigation costs then to use outside counsel with whom you have a strong relationship and who understand your business, business objectives and case-specific objectives. With that established, I also try to stay actively involved in the litigation by requesting that my outside counsel blind-copy me on strategic letters and e-mails so that I can maintain a feel for the status and pace of the litigation. Biweekly or monthly update calls, even just for a very brief update, also help me stay informed and in control of costs and strategy.
-- Christopher Pirrone
GC, Connexus Corp.
Controlling the cost of litigation is a high priority at Sun. We start by staffing each new case with a small team from one of our preferred provider firms, with clear understanding of the role and responsibilities of each person. New members are added to work on the case only after justification by outside counsel on the need to expand the team -- and only with approval of the in-house counsel working on the case.
We also work with litigation counsel to set quarterly budgets for each of our cases and then hold our litigation counsel responsible for meeting the budget. Included in that budget are the litigation expenses such as document production vendors, consultants/experts, etc. We have noticed increased savings when we hold our litigation counsel responsible for managing and controlling the expenses as well as fees.
-- Noreen Krall
VP Intellectual Property, Sun Microsystems
1. Avoid getting sued. Anticipate potential problems and keep abreast of legal trends to stay ahead of the curve.
2. If possible, resolve claims quickly to minimize outside counsel time.
3. Have discovery tools in place to minimize the need for outside counsel to conduct discovery.
4. Have outside counsel prepare a budget and stick to it.
-- Matthew Zinn
GC, TiVo Inc.
Manage the record. Before litigation is foreseeable, establish and apply record retention policies to keep the searchable content in any litigation to the smallest defensible data set.
Manage the staffing. Tell your outside attorneys how you want the matter staffed -- for example, one partner and one associate at depositions, two of each at trial, etc. Require pre-approval for any variance in those staffing requirements. Ask for most favored client billing rate -- you might just get it. Insist on the firm's best pricing from vendors, without any markup.
Pick your fights. Resist the reactive impulse of many defense attorneys. Just because the other side asks for something, it shouldn't require a fight.
Keep track of intermediate promises. Be wary of law firms who tell you that fighting over a particular issue won't cost more than "x" amount of money. If you're not using electronic billing, which permits tracking of charges for each activity, ask that all charges for a particular aspect be summarized on law firm invoices.
Hire lawyers you trust. Rather than looking only for lawyers who are best in the field, hire lawyers who are focused on their relationship with the client, not just the particular matter.
-- Joseph Catalano
chief litigation counsel, Union Bank of California
About 75 percent of litigation costs comes from lawyers reviewing documents. Accordingly, the most obvious way to control litigation costs is to cull or reduce the number of documents reviewed by lawyers. But existing culling methods -- usually keyword searching -- may be subject to increased judicial scrutiny as judges opine that culling may require experts in information retrieval (linguistics, statistics, library science, etc.) rather than lawyers.
In my experience, information retrieval experts can dramatically reduce the cost of the document review while reducing the risk of missing relevant documents. Therefore, one should seek law firms that know how to leverage technology but are willing to sacrifice short-term document-review billable hours to deliver a better, more cost-effective solution in the long run.
-- Phil Strauss
former GC, Actuate Corp. and Brio Software Inc.
When it comes to controlling costs, we are trying to bring more work in-house, at least when it comes to both paper and electronic discovery. Through tools such as Guidance software, we can control the searching and filtering of electronic data internally instead of using outside resources. For traditional discovery, using in-house paralegals and temporary counsel to handle initial reviews provides incredible cost savings compared to external counsel.
Also, we are requiring more active input by our in-house attorneys with litigation experience on matters. We are better able to guide the direction of the case with more in-house attorney involvement.
-- Kevin Marks
GC, Roche Palo Alto
