Litigating In A Cost- Effective Manner
It is the responsibility of every attorney to endeavor, without exception, to litigate in a cost-effective manner. In this day of burgeoning legal costs and economic distress, however, that responsibility is heightened, and litigators should be even more cognizant of litigation expenses and the need to give considerable thought on if and how such expenses should be incurred.
A failure to engage in such critical analysis may not only impact the course and outcome of a litigation in a manner unfavorable to your client, but it could also undermine client relationships. Clients are appreciative of an attorney if he or she litigates in a cost-effective manner. Clients, understandably, do not typically separate their satisfaction over a litigation outcome from their perception of the reasonableness of litigation expenses.
There are no hard and fast rules on how to reduce litigation expenses, because there are many variables at play when calculating what such costs may be and what litigation strategies are appropriate in the effort to keep expenses reasonable and manageable. The term "cost-effective" is not susceptible to precise definition. That said, in this article I will explore some of the issues that confront us as litigators and that implicate the magnitude of legal costs.
Pre-litigation considerations: One way to minimize costs is avoiding litigation in the first instance. Although this may not always be possible, it is a goal usually worth pursuing. One way to achieve this objective is to encourage clients to involve litigators before a problem erupts or detours to the courtroom. Too often a lawsuit commences because a party feels that its grievance was ignored and that it had no choice but to commence litigation. If an adversary has written a letter of complaint, ensure that your client is properly responsive. Perhaps the other party has a viable claim and a sensible settlement can be negotiated that will avoid the costs of litigation. Even if the other party's grievance lacks merit, articulating your client's position will, at a minimum, convey to the other side that its grievance was heard, and may even convince the other party that your client is right.
Defining the client's objective: Assuming that litigation cannot be avoided, at the inception of the case you must define your client's objective. If you don't know what your client is seeking as its ultimate goal, then it is not possible to fashion an effective strategy, let alone a cost-effective one. For example, is the client pursuing vindication of a principle or a settlement amount of a specific sum or a trial to resolve the dispute? The answers to such questions will affect the strategy you design. A failure to take this measure will result in a disjointed litigation strategy with likely increased costs.
Drafting a litigation assessment: In order for the client to define an objective intelligently and knowingly, input from counsel is needed. This can sometimes prove to be a challenging task at the inception of a case, because you may not have sufficient facts. To the extent possible, however, the assessment should include: a summary of the known facts; delineation of the material legal issues; an initial case strategy; analysis of the strengths and weaknesses of the client's position based on known available proof (don't just rely on allegations if unsupported by evidence); chances of a successful outcome; an assessment of the value of the case (the client's exposure should the matter go to trial); the costs associated with litigation; and the client's financial ability to fund a litigation. The case assessment should be modified as the case evolves and new facts emerge.
Calculating a litigation budget: Calculating a budget can be helpful in limiting legal expenses. A budget will alert a client as to the potential legal costs of a litigation, so that the client can weigh that factor in deciding whether and how to pursue litigation. Having such costs laid out in a transparent way may spur settlement talks or even talks about other methods of dispute resolution, such as mediation. Budgets can be difficult to create, given that many necessary variables are outside of the attorney's knowledge and control (e.g., the adversaries willingness to engage in motion practice), but even a broad estimated budget may prove to be helpful. Moreover, the budget can be modified as the case evolves. Calculating a budget also keeps the attorney focused on the issue of legal costs and their relation to the client's overall exposure in the case.
Settlement considerations: The issue of settlement can be a sensitive one. Some clients may confuse a recommendation to settle as a sign of passivity; similarly, adversaries may misperceive a settlement gesture as a sign of weakness. In reality, however, in a given case settlement may be a prudent and sensible approach. If litigation expenses can be avoided through a reasonable, informed and satisfactory settlement, then such a course is advisable.
Client input: It is the client's money being spent to fund the litigation, so the client should and must be kept abreast of litigation strategy. If the client overrules a litigation strategy, so long as you have ensured that the client's decision is an informed one (and is within ethical and legal bounds), the client's decision should govern. Therefore, from the inception of the case, and depending upon a client's inclination, effective case management requires discussions with the client about the case assessment and status.
That said, an attorney should be wary of certain client comments. For example, clients may remark that they want a litigator who is a "pit bull," but you should not engage in senseless litigation just to foster a perception of being aggressive. Aggressive litigation is not inconsistent with sensible and cost-effective litigation. Similarly, a client may say, "I don't care what litigation will cost; this is a fight over principles and money is no object." But those sentiments are typically long forgotten once the cloud of emotion dissipates and the client's focus is restored to the mounting costs of the litigation.