Legal Business

Litigation Budgets Can Help Resolve Differences Between Inhouse And Outside Counsel

By Eric E. Bensen & Rebecca K. Myers

A detailed budget, one that accounts for the number and nature of anticipated motions, scope of discovery to be taken by each side, including depositions, length of trial, etc., provides an opportunity for In-house and Outside Counsel to discuss their expectations regarding the estimated costs of the litigation using detailed criteria.  

For instance, if the litigation budget sets aside $500,000 for discovery with no further detail, there is no basis to evaluate whether $500,000 is too much or too little.  A litigation budget that indicates, for example, that Outside Counsel expects 20 depositions when perhaps In-house Counsel expects only 10, provides a basis for the two to begin a dialogue about how many depositions should be expected, i.e., whether 20 depositions is realistic or whether 20 will plainly include depositions of marginal or no potential value.  Having that conversation before the litigation begins is a powerful way to keep costs under control. 

Depositions are just one example, of course.  The same applies to motions, scope of document requests, expert witnesses, length of trial and virtually every aspect of the litigation process.  As long as Outside Counsel provides sufficient detail in the litigation budget, Outside and In-house counsel will have a basis to compare expectations respecting each stage of the process.  Where those expectations do not match, a detailed budget will provide a basis to identify and resolve the differences.

In sum, a proper litigation budget necessarily serves two purposes, but only one of them well.  The first is financial, that is, anticipating costs as accurately as circumstance will allow.  The second is managerial, that is, controlling costs by providing an early opportunity for In-house and Outside Counsel to compare on a detailed basis their expectations concerning the scope of the litigation.

To hear more about budgets from Eric Bensen & Rebecca Myers, register for a complimentary webinar on May 12th by Clicking Here!