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Sound Business Practices Apply to Good Litigation Management

Effective Caseload Management: Tips from Bensen & Myers

Applying sound business practices to managing your caseload as in-house counsel is a sound way to increase your effectiveness and your equity in your company. Even though attorneys spend years learning how to practice law, they sometimes neglect to think about the importance of good planning, precise budgeting, careful analysis of lawsuits and settlements, and proper management of discovery and information.

Eric E. Bensen and Rebecca K. Myers have drawn on years of experience both as lawyers and as litigation managers to write Bensen & Myers on Litigation Management, a guide that in-house counsel can consult at every stage of litigation.
In just a portion of their guide, the authors offer the following direction for in-house counsel and litigation teams on properly managing caseloads.

“Budgeting is a foundational brick in virtually every sound business process. While it always poses its difficulties, it serves a legitimate purpose and, with some planning, can usually serve that purpose well,” the authors write. Unfortunately, budgets often go by the wayside in litigation due to its unpredictable nature.“Were it the case that litigation budgets were typically off by 20, 30 or even 50 percent, they would still largely serve the function of helping corporate law departments set their overall annual budgets. However, even the most carefully prepared litigation budget can be off by 100 or even 1,000 percent, or more,” the authors say.

A litigation budget can serve 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,” Bensen and Myers say.

Determining When to Sue
Once they have analyzed the pertinent facts and applicable law and have established a detailed budget, attorneys are faced with the important question of whether or not to file suit. “The intuitive response is to look at the odds of winning a case and, assuming the anticipated recovery would exceed costs, go forward with it if a victory appears probable.”

“However,” the authors say, “that may not always be the best course. What if, for example, the chance of success is 75 percent, the potential recovery is $4 million and the budgeted costs are $3.5 million? At first glance, it appears the case should be brought because odds are it will be won and the recovery will exceed costs.  However, were four such cases brought, it is likely that one of the four would be lost.  The result would be that the total cost of bringing the four actions ($14 million) would exceed the total recovery ($12 million).”  Based on similar principles, it often makes sense to bring a lawsuit even when the odds are against winning. “Viewing potential litigations broadly can put the advisability of bringing a particular litigation in a new, helpful perspective,” the authors explain.

Evaluating Settlement
Since 90 percent or more of cases settle, Bensen and Myers say a systematic approach to evaluating settlement opportunities is one of the most significant tools you can use to reduce litigation costs.
They recommend that the possibility of settlement should be evaluated at four critical points in litigation:  1) at the outset of the case; 2) after a significant amount of discovery is taken; 3) at the end of discovery; and 4) after trial.
 “Evaluating settlement prospects at each stage requires both quantitative and qualitative analyses. One part of the quantitative analysis is the plaintiffs’ maximum recovery, which can be taken directly from the complaint (ignoring any claims dismissed from the action). Where injunctive relief is sought, this analysis is more complicated given that the value of an award of an injunction will not always be translatable into a dollar figure. Where such an injunction would relate to the sales of a product, however, the anticipated profits on those sales (from the defendant’s perspective) or the additional profits that can be expected once the competing product is off the market (from the plaintiff’s perspective) can be used,” the authors say.

“The other part of the quantitative analysis is the remaining attorneys’ fees that will be incurred if the litigation proceeds through trial and appeal,” they continue. “This number can be taken from a revised budget that considers only the fees associated with work to be done from the time of the settlement evaluation through to the end of the litigation.”

Managing Information
“The single biggest impediment to an efficient, cost-effective litigation is the poor management of information. The efforts of even the most motivated attorney will be stymied by the lack of sufficient resources to carry out a task. The most important resource an attorney can have is the right information at the right time,” the authors say. 

However, how information is organized can prove to be a difficult question, they warn. “Putting it all in one file will help you know where to look for needed information, but will make it difficult to find the needed information. Creating many files will make it easier to find particular pieces of information within the right file, but more difficult to know in which file to look,” they say. The authors suggest that attorneys identify the categories of information they will actually use to manage a case. 

There are three primary reasons in-house counsel as well the litigation team should have access to this information, Bensen and Myers say.

1.  “[A]ccess to the information will be one of the primary means in-house counsel has to verify that outside counsel is properly organizing, updating and distributing information in an effective and efficient manner.”

2. “[A] clear window into the litigation team’s understanding of the facts will make it easier for in-house counsel to know whether additional client resources are needed respecting fact development.” 

3.  “[A]ccess to well-organized case information will make it easier for in-house counsel to fulfill its internal reporting responsibilities.”

Managing Discovery
 Because it involves a number of elements—including document collection, document review, document production, discovery tracking and indexing, privilege review and depositions—discovery is typically the most chaotic and expensive part of the litigation, second only to trial. “The intricacies involved in keeping track of all the moving parts are often under appreciated, if not completely overlooked.  Such neglect is costly,” they warn.  

“However, by approaching the individual elements in a manner that considers each of their respective characteristics and making planning and strategic decisions concerning discovery flexibly from the outset of the litigation, the discovery process can be made manageable, allowing important and necessary information to more readily find its way to the lawyers making day-to-day strategic decisions. When the discovery process is approached in such a thoughtful and organized manner, the foundation of the entire case is put firmly into place as all of the various elements of discovery become seamless, permitting outside counsel to focus on legal strategy,” Bensen and Myers say. 

Collecting Documents 
The most time-consuming part of the discovery process is often the collection, review and production of documents and materials, and is often the most costly, Bensen and Myers say.

 “A thorough but streamlined approach to document production can go a long way toward reducing potential problems. An often-overlooked area is the document collection phase. Document collection is not generally governed by a statute or court rules, but is a necessary first step to the document production. Given the fact that litigation can involve the collection and review of millions of pages, it is important to start the collection process early and to carefully develop a plan for collecting documents,” the authors say.

“To streamline the process and minimize the disruption of business, document collection procedures will typically allow for some over collection of documents.  The idea is to collect broadly (within reason) and then more closely analyze documents offsite,” they say.  

“Over collection is corrected during the document review phase where outside counsel has the opportunity to subject the company’s documents to closer scrutiny before deciding which to produce and which to hold back,” the authors say.
They continue that attorneys can save themselves a lot of headaches by planning for a privilege review in advance instead of putting it on the back burner until an adversary demands a privilege log. They recommend that attorneys conduct the privilege review in parallel with the document review and appoint “privilege reviewers” who can work more efficiently in determining the privileged status of each document.

Preparing for Trial
Bensen and Myers recommend that attorneys break down their trial preparation work into three stages in order to make it less of a daunting task. 

Stage 1. Take stock of work that has already been done.

Stage 2. Leverage existing work to create the materials required by the pretrial order. “Fortunately,” they say, “the materials from the first stage will lay the groundwork for most of the work in the second. For example: a good fact summary will help identify exhibits; a well-organized compilation of legal analyses can provide a head start in preparing jury instructions or proposed conclusions of law; and deposition witness kits and corresponding deposition digests will become the foundations for trial witnesses kits.”

Stage 3. Focus on the trial. “Completion of the first two stages as early as possible will leave the maximum amount of time for this stage, and thus, the maximum amount of time to develop the trial strategy and create materials for management of the trial, such as a trial game plan, an order of proof, demonstratives … ,” the authors explain. “It will also leave time to consider logistical issues, such as the types of resources the trial team will need in court or in the ‘war room.’”

To read more advice on how to properly manage your caseload, be sure to consult Bensen & Myers on Litigation Management, published by LexisNexis. For more information, visit the LexisNexis® Store at http://www.lexisnexis.com/bensen-and-myers/.