You are the general counsel, CFO, or even CEO of a business engaged in litigation, or with potential litigation you could bring. Budgets are tight, and your capital needs to be conserved. You have probably read enough articles about the “death of the billable hour” and the rise of alternative fee arrangements to fill a book. You have probably been pitched to by law firms that say they can be more efficient or offer fee discounts for repeat business. Those developments in the legal market are good, but they are not enough. The lawyer-client relationship has two parties, and your legal costs will never be managed efficiently unless the client side—your side—is properly incentivized. Achieving this will require a paradigm shift from thinking about litigation as a cost and a burden, to thinking about it as an investment and an opportunity.
You might think that you are already properly incentivized. You want to keep litigation costs down and to maximize recoveries and minimize losses. You want to win your cases. But are such general incentives enough to ensure efficient outcomes in the actual decision-making process? Winning isn’t a goal until you define what winning means, and your in-house departments are also focused on other, more concrete, goals. After a decade of litigating cases for and against large corporations, I believe that far too often incentives are pushing companies in the wrong direction.
