6 Ways to Control Litigation Costs Before, During, and After Trial
Corporate attorneys sometimes view the variables involved in litigation as non-negotiables, simply because they are often labor-intensive, complicated, and increasingly costly. However, for those who follow a spend management strategy and develop a system to balance work between in-house teams, outside or specialty firms, and managed service providers, it is possible to keep costs under control. Here are some ways to control litigation costs before, during, and after trial:
Perform Due Diligence
In litigation, filing a complaint or answer requires that a reasonable investigation, commonly called due diligence, be conducted to establish a basis for the claims and defenses being made. A comprehensive understanding of the strengths and weaknesses of a case from the start provides numerous advantages, such as:
In-house teams can explore critical facts and develop legal positions before the other side fully understands their importance.
Teams can identify and focus on the most significant issues before the parties spend resources on general discovery.
An investment in due diligence is often recovered within the first few months of the discovery process and continues to generate cost savings throughout the life of the case.
While parties may be hesitant to invest in anything more than minimum due diligence because if the case settles before trial, the investment would be for naught. However, this approach can have many negative consequences.
Right Size the Team
Litigation is often complex and unpredictable. There will be times that demand significant legal resources and times when things move more slowly. While lean legal teams are favored, cases are sometimes staffed with too few attorneys. The goal is to avoid the need to call in reinforcements during high-volume periods since new team members will need to get fully on board before they can contribute, and the associated costs can be prohibitive. A better approach is to staff your team to cover the most active periods of the litigation before trial, ensure that work is not duplicated, and require team members to contribute the minimum amount necessary to stay current on critical issues. This is a relatively small investment compared to the time, effort, and money needed to bring someone up to speed in the middle of the case.
Formulate a Plan
Once your team has conducted its due diligence to fully understand the case, the next step should be to develop a well-defined litigation plan. At the very least, a litigation plan should recognize the evidence needed to prove the case, pinpoint the likely sources of that evidence, and lay out a schedule that the legal team will follow to obtain this evidence. Finally, you should stick to the plan and update it often. Although a litigation plan requires an investment in time, it will save money by keeping everyone on task and preventing unnecessary (and costly) expansion of the team, frequently with attorneys unfamiliar with the case.
Determine Your Strategy
A litigation team typically includes people with varied skills and experience. While some think delegating as much work as possible to junior team members will reduce cost while maximizing value, this strategy often fails and wastes a substantial amount of the budget in the process. When junior team members take the lead on major litigation, they often spend significant time, only to have senior team members take things in a different direction later on. A superior strategy gives senior team members responsibility for the overall litigation strategy – after all, they have the skill and experience to win the case. When senior team members create a detailed strategy outline and a list of specific tasks for major litigation projects in advance of due dates, numerous inefficiencies can ultimately be avoided.
Document Work Product
Creating a written record of your team’s work, commonly called work product, is likely the most effective way for a team to capture billable hours and control litigation costs. Because of the fast pace of litigation, attorneys often jump from one issue to the next to stay ahead of deadlines but, in the process, sometimes neglect to document their work product. When an issue addressed early in the case comes up again later, if the team fails to capture work product, it could be lost, and you might be asked to pay for the same work again. While memos can be helpful in certain situations, they are not the most efficient way to capture work product. Instead, use one of the many collaborative technology platforms available to quickly document, organize, and share work product generated during the litigation.
Utilize Spend Management Services
Some in-house legal teams manage numerous outside defense firms litigating across diverse jurisdictions in hundreds of matters. As a result, just one monthly invoice might be 20 pages long, preventing any in-depth analysis due to the manual effort involved. This hurdle has traditionally limited a legal team’s ability to manage its legal spend. However, double-digit, year-over-year increases in legal spend have spurred a need to better understand the drivers of these costs, which legal e-billing tools are not equipped to analyze.
Litigation cost increases have occurred at a time when organizations and their boards are demanding a greater level of accountability and efficiency from legal departments. The lack of transparency historically surrounding the legal spend process is no longer viable in many organizations where decisions must be based on data-driven information that will strategically support the organization’s mission. Legal spend management services with advanced analytic functionality provide the tools to meet those expectations. These services help in-house teams control litigation costs by:
Eliminating legal invoice review time for in-house teams
Defining clear, reasonable budgets
Increasing transparency into the billing process
Helping in-house legal teams control outside counsel spending
Neutralizing the resentment that may arise due to billing issues
Implementing predictable billing guidelines that are firm yet fair
Boosting law firm accountability – and legal department trust
Formulating an analysis for better decision-making in future litigation
The most efficient use of your litigation budget can mean the difference between meeting goals and missing the mark. As a result, more and more corporate legal departments are turning to results-based legal spend analysis services to avoid the burden of reviewing legal bills, stay on budget, and help control litigation costs.
