As a mediator or conflict resolution specialists who may work with in-house counsel in mediation, it is important to understand what in-house counsel is up against. When you understand the in-house attorney’s problems and situation, you can better serve him or her with your mediation and conflict resolution services.
In this article, Avoid Quick Fixes and Control the True Cost of Litigation, Joseph F. Speelman contends that taking cases to trial will reduce a company’s litigation costs in the long-run:
Pay the company’s attorneys first — not the other side’s. Consider refusing to settle cases in favor of trying them to win. This will initially increase internal costs, essentially sending payments to the company’s own attorneys. But over time it will lower the overall cost of litigation. The company will pay less overall for litigation by litigating more aggressively. It will be paying its own attorneys and not the opposing attorneys.
At times, trying cases may in fact be a smart strategic move for a company. Yet, several factors should be considered:
1) The size of the company. Smaller companies may not be subject to repeat litigation and they may be better of settling than trying the case.
2) The nature of the suit. If the company is a large employer and it is an employment matter, the chances of further suits by other employees is high. If, however, it is a business contract dispute, is there a risk of copy-cat litigation? Is there a risk that others will hear the company settled and also litigate? Maybe not.
3) The merits of the case. If the company’s internal investigation (or outside counsel’s investigation) reveals wrongdoing or potential liability, it may be foolish to try the case. A decision to try cases cannot be made in a vacuum. If the case is a close call that is one thing, but if there is a sympathetic plaintiff with injuries, weigh the options.
4) The Executive Management and Board’s Risk Tolerance. Trying cases is risky business. Mediators are known to sell risk. Yet, anyone who has tried cases knows they win some they should not have and lose those they should have won. Read the headlines of multi-million dollar verdicts and that may be enough risk to persuade management to settle.
The bottom line is that it may be a smart move to try more cases and it may not. Mediators can help in-house counsel analyze their strategic objectives in determining whether or not to mediate or to settle a case once at mediation.
As a marketer of professional services, talk to in-house counsel, find out what problems they face and how you may be of service. The cost of litigation is an expense that unless litigation is an offensive maneuver, typically adds nothing to the company’s bottom line. Mediation at the appropriate time, may be a smart move.
Never give up!