Litigation Counsel Need To Look Beyond the Rules and Law
A few years ago, a general counsel told me that the worst possible litigation outcome for a defendant company is a settlement that is less than the defense fees incurred. I opted for diplomacy and agreed, but thought, no, the worst possible outcome is settling a case and having the same opposing counsel sue your company on a similar matter a few weeks after the first check is received. A really big problem is developing – you are becoming a target, and, in all likelihood, you overpaid on the first case.
Recently, this came to mind when I read an article by Steven Hantler discussing core competencies for litigation managers. The article observed that litigation managers generally focus too closely on managing a case after a complaint has been filed, but, preferably, in addition to managing the litigation, managers had to formulate communications strategies, understand the company’s regulatory and legal environment, and understand how the case could affect various constituencies.
That got me thinking that my earlier opinion was too narrowly focused on the litigation, itself. In fact, litigation may have more far reaching effects on your business -- your reputation and relationships with your core constituencies could be in danger. To formulate a litigation strategy that works in the context of a business, an in-house litigation counsel must see and analyze the matter from a variety of perspectives. The effects, if any, on how you do business, your customers, your employees, your shareholders, your contractors – including your accountants, your community, the community where the claim either arose or is pending, the potential for future litigation, the effect on other pending litigation, the law, the judge, his or her clerk, the risk of loss, the continued expense, precedent, and your outside counsel -- just to name a few – should be considered.
Not considering all of this can result in a really surprising worst possible litigation outcome – such as loss of business, increased costs and an unhappy work force. A judgment might be the least of your problems.
