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The following discussion thread excerpt is from a just-completed online seminar entitled “Early Dispute Resolution: Creating an Effective Corporate Program.” For information on this and other law.com seminar offerings, please visit http://www.law.com/seminars. PANELIST MARK G. PHILLIPS, PHILLIPS PARTNERS, BOSTON Steve asked me to start discussion on some EDR tools that do not involve a full-scale EDR program. What if you have two or three difficult matters that you want to manage aggressively but there is no EDR policy or program in place? How do you get the buy-in of business client and outside counsel? I come at this question from the consultant perspective (focusing mostly on complex jury cases). One approach we are testing is the early case conference or early intervention. The idea is simple: Bring together the team members (client, in-house counsel, trial counsel), case evidence, surrogate judge, mock jurors (if jury trial) in a dynamic case exercise to forge internal consensus and promote early settlement action. The premise is that “disputes” within a party (client, counsel, insurer, etc.) can be as much an obstacle to settlement as disputes between two parties. At the risk of going acronym crazy, I think of this challenge as Internal Dispute Resolution (IDR). The psychology here is “interventional”: to stop the litigation train for a moment so that everyone on the team can re-assess and refocus. You often need a formalized event, an “off-site retreat,” to get folks together and to encourage a more objective assessment. Traditionally, this has waited until the courthouse steps. Nothing works quite so well as a firm trial date and a glance at the jury pool to get everyone involved, focused and talking. Mediation serves the same function, though without the fear factor. It is a formalized event (with its own rituals) that is intended to stop the train and rechannel adversarial energies. Mock trials can have similar impacts, though only for one side. Indeed, we have found that nearly two-thirds of our complex jury cases settle within 120 days of mock trial research. We have been using the Internet to run these strategy case conferences. It is easier on everyone’s schedule and it is less expensive. There are strong forces weighing against early resolution. As a prelude to action, you need consensus and buy-in. PD talked about needing “structure.” In isolated case management, the structure is the early case conference. I would be interested in everyone’s experience. MODERATOR STEVEN A. LAUER, LAUER & ASSOCIATES, MAPLEWOOD, N.J. I think that one of the critical points of your post, Mark, is the need for an objective assessment of the strengths and weaknesses of your position. I can think of several instances from my experience where those involved in defending the company believed that the case was a winner. “We did nothing wrong and any jury will see that!” Not so, I’m afraid. All too often, those involved in a dispute see the facts and issues through their biased filters. (I don’t say that critically, really.) In the course of developing some litigation-management procedures (I would now call them “dispute-management” or something else), we determined that one of the most important steps that the company could take would be to distance those who were involved in the events that underlay a dispute from its later management. Not only might they be called as witnesses and thus present some complications vis-�-vis privilege and other issues (if they are attorneys, for example), but they often expected personal vindication at the end of the day. That might not coincide with the company’s interests. Mark’s point is an important one. By stepping out of the litigation path and “taking a breath,” you often gain a different perspective. Doing so with the input of truly disinterested parties (a mock jury, an independent neutral like a mediator, etc.) is even more useful. Of course, “traditional” jury research is not a tool that you can routinely apply to all your cases. For one thing, it can be expensive. For another, it often presents scheduling difficulties as people (several attorneys, business unit representatives, etc.) must match up the demands on their time and find a common opportunity to get together and go through the exercise. I suspect that we would all like to learn how to apply a tool like that in a more programmatic fashion. Of what benefit can the online research be in that regard? MARK PHILLIPS Steve, technically one can use combinations of Web conferencing software (MCI), streaming video and good old-fashioned teleconferencing. Nothing technically difficult today in using the Internet to present legal cases. For example, if you wanted to supplement an early case assessment in a large arbitration case, it is quite cost-effective to gather the trial team, client and two or three mock arbitrators on to an online conference for case arguments and evidentiary presentations and arbitrator feedback. This may take three hours and everyone is in their respective offices. It is a little more complicated with jurors because they mostly have dial-up access. The EDR goal, though, is still to provide objective feedback in a dynamic setting. This is what stimulates consensus. STEVEN A. LAUER I suppose that you can complicate it by multiplying the presentations, providing for recorded feedback (in a database, perhaps) and in other ways. The goal, then, is to provide something similar to traditional jury research, but which is less expensive and more flexible (in terms of scheduling, changing the format or sequence of the presentations, etc.). By making it more flexible and less expensive, you probably can incorporate it into an EDR program much more readily than you can traditional jury research. Is that correct? PANELIST SILVIO DECARLI, DUPONT LEGAL, WILMINGTON, DEL. Mark, have you or your clients used some sort of “risk analysis” methodology as part of your Internal Dispute Resolution efforts? I’m thinking of the various quantitative analytical tools similar to that developed by Marc Victor of Menlo Park, Calif. (“Litigation Risk Analysis”). The premise of this and similar tools is that while lawyers’ (and perhaps clients’) intuition may work in evaluating simple disputes, a more rigorous analysis is needed for complex cases. Does this type of analysis help focus thinking? Have you found that it helps nonlawyers get a better grasp of legal uncertainties? MARK PHILLIPS Silvio, Steve and I did a national survey of 30 trial lawyers a few years ago to see if they would evaluate a computer “vaporware” case in the same way. They generally agreed on the critical case elements but were all over the board on settlement values and verdict risks. Depending on which lawyer you had, you might have valued the case at $2 million or $11 million. Especially in complex jury cases, guts and intuition will vary more than one would expect, even among experienced litigators. We have so few decision tools for measuring litigation risks. The investment folks have PE ratios and dividend discount models and a host of other value indicators. Doctors have X-rays and CAT scans and blood tests. Lawyers mostly have intuition and judgment, which is just fine for the vast majority of cases, but not for the complex ones. Our experience with decision tree analysis is that it can be useful, if one has the patience for it. It is not user friendly. And the quantitative outputs can be misleadingly scientific and precise, masking the inherent subjectivity of the attorney’s inputs. I remember chatting once with Dan Mahoney when he was in your department about the need for better standards of qualitative decision-making and accompanying metrics. Some of this may be tapping other information sources to better assess risk and some of it is process-related — how we go about developing consensus in a group. PANELIST BEN PICKER, STRADLEY RONON, PHILADELPHIA I agree that mock juries, decision trees and some of the other suggestions offered today are good suggestions for helping the client make an objective evaluation of a dispute and for getting all of the internal representatives of the client on the same page (especially in cases of strategic importance or involving big dollars). I just participated in a patent infringement case where a mock jury permitted the client which did not recognize any “fault” to appreciate their risk before a jury. However, in my view, we need to recognize that the underlying interests are invariably as important (and often more important) than the kinds of evaluation issues discussed so far today. Costs, timing, relationships, and other similar issues often are the real drivers of resolution. Even in the area Mark Phillips calls IDR (internal dispute resolution) the interests are often paramount. As one example, I was involved in a dispute where the plaintiff was seeking large sums for the alleged breach of a supply agreement. The CEO mostly wanted to settle for a large sum of money. The CFO was concerned about the timing of a settlement. The business manager wanted a declaration of rights to establish that her decision to terminate was correct. And the general counsel argued that the duty was to the shareholders and that the relationship should be re-established because Wall Street values long term streams of revenue more highly than large sums of cash. In almost every mediation in which I have participated, the negotiations are influenced as much by the interests as they are by the rights. We need to keep this perspective in mind in any discussion about evaluative tools. PANELIST JOE IPPOLITO, LUCENT TECHNOLOGIES, LIBERTY CORNER, N.J. This is a good discussion. I agree that in the appropriate case, pulling together a “team” makes sense. Outside and inside counsel clearly need to be on that team. As far as the “client” participant goes, my experience is similar to Steve’s: Sometimes someone needs to defend and vindicate his or her decisions that got us here in the first place. I’ve worked around that issue by enlisting the participation of a higher-level manager in addition to the “actual client.” Sometimes that is more easily done than at other times. For instance, if there is a new “boss” or new reporting structure, I have been able to get a more disinterested “client” involved without disenfranchising the “actual client.” Ultimately, the purpose is to have the case analyzed objectively so the settlement strategies can be implemented before too much money has [been] spent on less productive exercises. STEVEN A. LAUER The discussion in this thread of how different lawyers will evaluate a case and reach widely divergent conclusions as to its merit and “value” reminds me of some research that I conducted for a consulting client a couple of years ago. I was examining how law departments evaluate cases (for whatever purpose). Some surveys suggested that quite a few departments claimed to have adopted case evaluation strategies in that context. I spoke with representatives of a number of law departments, several of whom claimed that their departments were among those with case evaluation procedures in place. In probing what those procedures entailed, however, I discovered that very often they consisted of a set of guidelines or instructions to outside counsel that required that outside counsel prepare a case evaluation (often 60 or 90 days after receiving the file) with little or no guidance on how the department expected them to satisfy that requirement. The research that Mark and I conducted a couple of years ago (to which he referred earlier in this thread and which he described more fully in an article that he posted in the library for this seminar) suggests that such an approach in fact is not a case evaluation methodology because the result will depend on which law firm (or which attorney within a law firm) evaluates the case. Will firm A address the issues or topics that might be important to company X if that company does not identify those issues/topics? One example might be corporate reputation. For some companies, reputation is of critical importance. For other companies (none of which are represented in this discussion, I’m sure), it may be of lesser importance. The potential impact on reputation of a dispute might therefore rank higher in the evaluative process for the first company than it does for the second. How can a law firm that represents both companies apply the same method of evaluating disputes to those companies’ matters — or two different law firms for one of those companies? My point is that all of the elements of a dispute resolution protocol should be well thought out and calibrated to the corporate environment in which it is to function. (See my article on that topic in the seminar library.) STEVEN A. LAUER I looked through some material that I have on litigation management and, particularly, discussion of the use of decision trees for case evaluation. Though I once attended a seminar on one of the better-known decision tree offerings (in a pre-software version), I have never used it in practice and therefore can’t speak to its real-world utility. The author of one book (who is, according to the book jacket, a well-experienced trial attorney who has written and lectured extensively on various aspects of litigation management) wrote as follows: “A few attorneys have tried to utilize decision-tree analyses to estimate the value of a case; however, these analyses, while based upon the actual issues and facts of the subject case, are usually flawed because they do not take into consideration the realities of litigation.” Further along, he wrote that “computer decision-tree programs are available; however, this type of software is, at best, cumbersome and, as discussed above, utilizes mathematical formulae which do not necessarily mirror the way litigation cases should be valued.” Does anybody have experience with decision-tree analyses (either computer-based or not) that allows for a contrary view? Any success with those approaches in evaluating cases that you wish to share?

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