Architects will tell you that any sound building with structural integrity has a solid base and foundation. What is true in architecture also rings true in managing litigation.
In today's litigious business and legal environment, clients face many challenges in litigation management. Insurers, claim professionals, and risk managers have vast legal needs: defending and pursuing claims, resolving contract disputes, representation at judicial forums. Litigation management often boils down to lawyer management. Lawyers can and should be managed, just like any other outside service vendor: a broker, a third-party administrator, or a safety consultant.
While clients may feel frustrated and powerless to tame the litigation beast, it is possible to manage litigation to save time, money, and frustration. The three key pillars of litigation management are (1) wise attorney selection, (2) cost control, and (3) service management. Let's examine each in turn.
Pillar 1: Wise Attorney Selection
Many resources will provide useful leads for checking the background, credentials, and specialties of attorneys and law firms. These include the Martindale-Hubbell Directory and A.M. Best's Directory of Recommended Insurance Attorneys. Specialty directories are often available free from organizations such as the American Law Firm Association and the International Association of Defense Counsel. Seek firms and attorneys who specialize in defending your type of business.
Network with industry colleagues. Chat with counterparts at other comparable businesses. Use forums such as claim association or RIMS meetings and conferences to learn about high-caliber lawyers and firms.
Approach the attorney selection process systematically. Develop your own panel of approved counsel, either on your own initiative or with your insurer. If you are insured, seek approval upfront at renewal or when coverage is first placed for your ability to select counsel or at least have a say in counsel selection. If you show that you've done your homework and have a well-researched list of qualified counsel at reasonable rates, you have more bargaining leverage in getting insurers to agree to let you pick your own attorneys.
Insightful questions to candidate counsel can elicit key information "nuggets" that, in turn, produce the best counsel selection decisions:
"Describe your background in defending public entities."
"Can you provide three references in my field or niche?"
"Which attorney(s) will handle my assignments, and what are their experience levels in my particular area of need?"
These steps can set the rudder, steering your case toward a sound conclusion by partnering with the right outside counsel. We all know that lawyers do not work for free, though, hence the second pillar of effective litigation management.
Pillar 2: Cost Control
To help manage costs, have written guidelines for outside defense attorneys, first when they join your approved list, second, when you assign them a case. Written guidelines also avoid misunderstandings. They should cover items such as the hourly rates you will pay for partner and associate work, the format and frequency of billings, any budgeting and expense-forecasting requirements, what you will and will not pay for, your policy on legal research and retention of expert witnesses, and what they must get approved by you first.
Even if an attorney is hired by an insurer, you—not the insurance company—are the client. Do not hesitate to give counsel a friendly reminder of that fact if you feel it is warranted. At the beginning of any case assignment, communicate in writing with the attorney regarding your cost-control aims. State that bills and expenses incurred that do not follow the guidelines will not be paid or reimbursed. Increasingly, clients issue written guidelines to outside counsel, so chances are your lawyer will not be shocked to receive them from you.
Further, require written budgets. Within 90 days after case assignment, have counsel provide a written budget/forecast of legal fees and related costs. Consider getting a Budget A (cost up to trial) and Budget B (budget including trial). If the budget looks stratospheric, that is an early warning that you need to intervene with counsel to either understand the costs or to sensitize counsel about a more "frugal" approach to litigation.
Before you or your insurer hire a law firm, do not be afraid to request fee discounts. Legal services represent a buyer's market. It never hurts to ask. You may be surprised at how law firms, hungry for business in a competitive climate, will quickly accommodate reasonable requests for discounted billing rates.
Of course, the cheapest lawyer is no bargain if you receive sloppy or indifferent service. Therefore, let us examine the third pillar of effective litigation management.
Pillar 3: Service Management
Written expectations—clearly communicated to outside counsel—are the linchpin of service management. Litigation management is more than just cost management! Litigation guidelines should cover not just billing issues, but also service standards such as the following.
How often you expect status reports
How promptly you expect turnaround on specific requests
Turnaround time expected on returned phone calls, email replies, etc.
Accessibility at "odd" hours
This provides the framework for your client "Bill of Rights." Be vigilant to warning signs of deteriorating service, such as the following.
Firms pawning off your case to a newly minted attorney or an underqualified neophyte, viewing your case as a training ground for new lawyers
Lack of creativity
Trouble getting phone calls returned
No or slow response to letters and inquiries
"Musical attorneys": different lawyers handling your case
Strategy inconsistent with your aims and philosophy, i.e., trial prep on cases that should be settled, underpreparation on cases needed to be worked up for trial
Once you spot these red lights on your litigation management dashboard, consider the following remedies.
Call the attorney to discuss.
Write to the lawyer, itemizing your concerns.
Request a written action plan for repairing the service lapses.
Voice concerns to a managing partner.
Hold a sit-down meeting with the lawyer(s).
Reassign the case to another attorney within the firm.
Reassign the case to another law firm.
Give outside attorneys a periodic "report card," assessing overall performance in categories of cost, results, and service. Share your findings with counsel. Focus on areas needing improvement. If you are dissatisfied with the caliber of legal service you receive, act promptly and blow the whistle. Don't let dissatisfaction fester.
You needn't be adversarial with your outside counsel to successfully manage litigation. Be an assertive consumer, though, and you'll succeed in taming the litigation "beast" rather than having it run all over you. Be the architect of your own sound foundation by focusing on these three pillars of effective litigation management!
This topic will be presented as a workshop session at the 2008 annual conference of the Council on Ethical Billing in Orlando, March 13-14, 2008. The Council on Ethical Billing has announced a merger with the International Litigation Management Association, which will create the largest U.S.-based organization focused exclusively on litigation management and ethics in billing. This is great news for our industry. For more information, please visit litigationmanagement.org.
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