During and after a recession, controlling costs becomes a primary goal for business, especially if litigation is pending against the company. Legal costs are highly inflationary and seemingly uncontrollable, unless you have a Trusted Advisor proving strategic advice based on your company’s interests and goals.

A new trend has developed in the legal field to help control the expenses of litigation.  Called litigation management, seasoned trial attorneys, with extensive experience in managing complex litigation, work with company executives to define a business-driven timeline and strategy with the express goal to resolve the dispute within a realistic, workable budget.

While it may seem counter-intuitive to add another layer to the process, it actually helps to resolve the conflict.  The following examples are just a few of the many situations in which litigation management actually saved the company from dissolution or bankruptcy.

Case Studies Provide Proof that Litigation Management Works

An example of the effectiveness of litigation management involves a national provider of products and services to the automotive industry.  The company was sued in New York for alleged legal violations related to the sale of certain products within the state. The plaintiff sued as a representative of a class of consumers seeking actual and treble damage recovery for a number of violations, including insurance code and consumer protection laws. The Plaintiffs’ attorney received $250,000 as a result of a partial settlement, and then pursued a lengthy process of discovery, which cost an additional $300,000. After the attorney proposed that another part of the case be settled for another  $250,000, the company executives realized the litigation was out of control.

They hired a litigation management firm to strategize and direct the litigation.

The litigation management firm quickly determined that the company would spend about $1,000,000 to settle a case with $26,000 at issue if they followed their original attorney’s plan. After evaluating the legal risk and determining the client goals, the litigation management firm sourced new counsel with demonstrated expertise in the legal area and good, credible contact with the court where proposed class action was pending. Pursuit of an aggressive settlement policy and reduction of legal fees by 80% were accomplished. A final settlement was reached that resolved all pending litigation. 

“I am not just looking to cut costs when it comes to our company’s litigation. I am looking for a strategic manager to advise me and my counsel to ensure that the legal process is aligned with the goals of our company to achieve the best possible results. Such a strategy should serve to take the management of litigation off my plate so that I can do my job,” said John Pappanastos, CEO, EFG Companies.

In another example, an established airline sued a start-up airline to prevent it from commencing business. The start-up was spending an average of $300,000 a month in legal fees and the top executives spent time daily on matters related to the litigation. With the plaintiff using the litigation process as a stall tactic, the start-up airline needed a plan to wrap up the legal process quickly so they could begin service.

They hired a litigation management firm to strategize and direct the litigation.

The litigation management firm also acted as the contact point for numerous administrative and legal fronts. Legal fees dropped drastically (by $225,000 a month) and within twelve months  the litigation was resolved successfully. The litigation management firm saved the start-up airline substantial money on legal fees and resolved the legal dispute much faster than if they had not become involved.

“Our investors, a mix of founders and private equity, were facing a total loss of their investment,” said Douglas List, Board Chairman, TTS, LLC, “our legal strategy was simply unaffordable, but our attorneys seemed oblivious to this fact. We retained a litigation management firm, which restructured our legal strategy, cut our legal burn rate by 75%  and gave the business a fighting chance, without requiring us to change nominal lead counsel. A year later, it was all behind us and we achieved a successful resolution because our litigation management firm focused on saving our company rather than simply arguing the case.”

A weird sight to see driving down the highway-...In a third case study, a competitor sued a third-party logistics transportation company, alleging intellectual property theft and computer fraud. The suit sought to recover millions of dollars in damages, the return of confidential intellectual property and the enforcement of an injunction. The company retained a large law firm who executed a strategy to disgorge documents, digital and meta-data information, as well as internal confidential electronic mail and proprietary information. The company spent an average of $300,000 per month on legal fees to defend the lawsuit.

With never-ending legal expenses, filing bankruptcy became a practical but unsavory option.  To avoid that result, the logistics company hired a litigation management firm to develop a better legal strategy to keep the company afloat.

The litigation managers executed a plan designed to reduce the impact of the litigation on the business operations. Company Executives were freed to return to running the company instead of spending time on legal matters.  A successful resolution that did not restrict the company’s ability to successfully compete in the market was reached. Legal fees were substantially reduced and the pending litigation was ultimately dismissed. A companion investigation was also terminated with no prosecution of any wrongdoing.

Conclusion – Litigation Management Works

Within each of these examples, litigation overwhelmed the company’s executives. Their attorneys made strategic decisions possibly driven by self-interest, rather that what was best for the company as a whole.

By inserting a strategic, analytical voice into the heart of the litigation, litigation managers tightly controlled the litigation process, the attorneys and the experts. Because their sole focus was to resolve the disputes as quickly and efficiently as possible, the company’s best interests were served. The uncertainty of litigation and high legal bills were removed. Successful resolution of these legal disputes helped the CEOs move forward, save time and money and concentrate on making their businesses expand and grow.

When litigation embroils your company or business, contact Shields Legal Group to learn more about our Corporate Litigation Advisor (CLA) services.  Please visit ShieldsLegalGroup for more information.

Please note: This article is for general information purposes only and should not be considered legal advice.  You should not act on information received from this article without first seeking advice from your legal counsel.

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