5 Ways to Reduce the Cost of Litigation

There are few things business people loathe more than litigation. It can swallow legal budgets and consume vast amounts of time and talent that could be put toward other efforts. There are obvious ways your law firm can save you money, such as through billing discounts and the use of widely-available technology. But these measures do not address how your legal team will work on your litigation or the value you receive for your significant investment. If maximizing value is critical, consider incorporating the following strategies and practices:

1. Invest In Due Diligence

Filing a complaint or answer in litigation requires that your lawyers conduct a reasonable investigation, called due diligence, to establish a basis for your claims and defenses. Parties are often reluctant to invest in anything more than the minimum required due diligence because many cases settle early and this investment could go to waste. This approach, however, is often a mistake that has consequences.

A deep understanding of the strengths and weaknesses of your case from the beginning provides significant advantages. It allows you to start developing facts and legal positions before the other side appreciates their importance. It will also help your team to identify and stay focused on the issues that matter most. In many cases, thorough due diligence has allowed our clients to pursue a litigation schedule that teed up key issues early in the case before the parties started spending resources on general discovery. But even under a "normal" case schedule, your investment in due diligence is usually recouped within the first few months of the discovery process and continues to generate ROI through cost savings over the life of the case.

But what about the fact that litigation can settle quickly? An early investment still makes sense because you will have a key advantage in settlement negotiations if your team knows the case better than your adversary. With a deep understanding of your strengths and weaknesses, you can make sure your settlement position is both cost-effective and aligns with the merits of the case. There is nothing worse than being blind-sided with unknown challenges during settlement discussions. Moreover, many cases needlessly proceed into discovery and beyond because neither party really understood the merits of their claims in the first place. An investment in due diligence can help you understand downside risks, facilitate a settlement, and avoid more significant costs down the road.

2. Create a Litigation Plan

If your team has conducted adequate due diligence to understand your case, the next step toward saving money is to create a well-defined litigation plan. At a minimum, the litigation plan should identify the evidence you will need to prove your claims, identify the likely sources of that evidence, and clearly articulate a schedule that your legal team should follow to obtain this evidence in time for expert reports, dispositive motions, and trial. Your teams should adhere to the plan and update it regularly. The litigation plan requires a small investment, but will save you money both by keeping everyone on task and by preventing the unnecessary (and expensive) expansion of the team to meet deadlines, usually with lawyers who are completely unfamiliar with your case.

3. Be Sure Your Litigation Team is the Right Size

Litigation is rarely a smooth ride. There will be times that require significant legal resources and times when things are quiet. While lean legal teams are preferred, sometimes cases are staffed with too few lawyers. You want to avoid the need to call in reinforcements during the "high-volume" periods of the case. These new team members will need to learn the case from scratch before they can contribute. The associated costs can be eye popping.

A better approach is to staff your team with enough people to cover the most active periods of the litigation before trial. Under this approach, however, it is critical that no one duplicates work and team members only contribute the minimum amount necessary to stay current on the major issues. That is a very small investment compared to the amount of time and effort required to get someone up to speed midway through the case.

4. Require that Senior Team Members Set the Strategy Early for Major Litigation Tasks

Your litigation team will often include members with varied skills and experience. One common misconception is that pushing as much work as possible to junior team members will maximize value. This approach all too often backfires and creates a significant waste of your legal budget.

Senior team members are typically responsible for the overall litigation strategy--and rightfully so. They have the skill and experience to win your case. When junior team members take the lead on major projects, they often spend a significant amount of time, only to have senior team members dig in later and take things in a different direction. You can avoid this inefficiency by requiring that senior team members create a detailed strategy outline and list of specific tasks for major litigation projects well in advance of due dates. Here, a small investment by a senior team member can go a long way.

5. Make Sure Your Team Documents Their Work

Although creating a written record of your team’s work, called work product, is the last item on the list, it is probably the most important way that your team can maximize value and minimize litigation costs. With the fast pace of litigation, lawyers tend to jump from one issue to the next to meet deadlines, but often fail to capture work product in the process. Without fail, an issue addressed early in the case will come up later. If your team fails to capture their work product, there is a good chance it will be lost or you will pay for the same work a second time.

Do not confuse the concept of capturing work product with the Byzantine practice of creating memos on various aspects of the litigation. Although memos can be helpful in certain situations, they are not the most efficient way to capture work product. Instead, make sure your legal team uses one of the many collaborative platforms available to quickly capture, organize, and share work product generated during your litigation.

Find a Legal Team that Values Efficiency as Much as You Do

The efficient use of your litigation budget can mean the difference between meeting business goals and falling short. Be sure you work with a team that values efficiency and has taken the steps to make sure your resources are focused on what matters most. If patent litigation or other complex litigation is in your future, contact us. We can create a litigation plan that will put your resources to work.