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“Wars are caused by undefended wealth.” — Ernest Hemingway A day does not go by that I don’t receive several solicitations, via e-mail, voicemail, cold call or letter, from people offering to help my company manage its litigation burden. Added to that are articles in magazines aimed at in-house counsel explaining how some large chemical or manufacturing company’s legal department successfully manages litigation using an elaborate, multilayered, two-volume process with lots of acronyms and quotation marks around key phrases. It all sounds and appears difficult and complicated — a process beyond the ability of most mortal attorneys and general counsel to comprehend. Fortunately, however, such complications aren’t necessarily required, particularly for the litigation chief or the general counsel. An effective litigation strategy needs to be just that: a strategy, not a tactic. It needs to be durable, principled, and transparent to everyone, including opponents. It needs to be simple, not complex. Business leaders must not only embrace this strategy, but they must also assist in its creation. Let me explain. Businesses must resolve litigation on a principled basis, not merely on a financial basis. Any other approach, such as settling for any amount so long as it is less than the cost of litigation, only invites and encourages vexatious, baseless claims. Ask this question first: Did the company do anything wrong? The answer to that question — not merely a desire to reduce litigation costs — should inform and guide the rest of the process. FIGHTING BACK Those who manage litigation internally must accept full budgetary and outcome responsibility for litigation results. While the business leaders make decisions concerning strategies of the company, controlling litigation costs is an important consideration. However, those leaders can only see the big picture if the in-house counsel controls the overall impact of litigation — not merely fees, expenses, and related costs. Otherwise, various departments can pass the buck; strategic focus, meaningful accountability, and future preventive opportunities may be lost. To ensure that leaders are fully informed, the legal department must create a monthly, internal, privileged report to senior management showing the total impact of litigation on the company. In-house lawyers and the business execs must weigh the business impact and value of victory in any risk analysis performed regarding pending or threatened litigation. In the current predatory, dysfunctional, and confiscatory litigation climate, fighting back has become essential and not merely an option. In-house lawyers should ask themselves these questions: What is the impact of settling the case? What is the impact of winning? Any decision-tree evaluation of litigation should assign a value to winning the case outright. Victory is a powerful deterrent, especially in mass tort litigation. The vindication of core principles and values is an equally important business consideration. SPREAD THE RISK It’s practically a clich�, but key outside counsel must become partners with the company. That means outside lawyers must take on part of the company’s burden, stand in the way of harm, and accept significant risk for the privilege of representing the company. A true partnership is required — one that establishes a winning culture, not merely a financial relationship. Outside counsel must be willing to commit their professional reputation to defending a GC’s company. They should subscribe to the GC’s values and demonstrate that commitment by offering creative fee agreements that ensure predictable legal costs. The days of hourly billing are ending, and litigation managers have the power and the right to insist that outside counsel accept new ways of doing business. In fact, if a GC must insist on such an arrangement, perhaps she is using the wrong outside counsel. GCs must choose outside counsel on one criterion above all: their winning record. How many tried-to-verdict cases have they conducted? Insist upon winning. INSIST ON VICTORY It is frustrating that many U.S. companies seem unwilling to defend themselves against the litigation onslaught. Establishing a winning culture, as set out above, provides a clear opportunity to change that trend. Properly developed and implemented, it can work to vindicate the sound principles and judgments upon which successful businesses are established. In such a culture, victory and victors can be celebrated, and losing becomes a true learning experience — without any scapegoats. Celebrating victory in litigation is just as important as rewarding excellence in accident prevention, safety, and environmental achievement. Companies must do both. In many respects, intimidation and acquiescence characterize the current litigation climate. Failing to insist on victory against these tactics creates a money culture where businesses sacrifice core principles and ultimately lose competitive advantages. GCs should ask themselves how many times they have heard the phrase “buying peace” as a code phrase for settlement. When core principles are at stake, however, a company cannot buy peace — it can only win it. Indeed, a company can buy war, meaning more litigation, if it simply pays cases to go away. In that scenario, more cases will surely follow. GCs need a new paradigm. Pursuing it may not be easy, but it is simple.
Joseph F. Speelman is associate general counsel and litigation chief at Lyondell Basell Industries in Houston. During his tenure at Lyondell, the company’s litigation costs have been reduced by 80 percent. This article first appeared in Texas Lawyer , an ALM publication.

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