Fighting Smart And RAPID Resolution

Friday, December 1, 2006 - 01:00

Introduction

Litigation lawyers need to get smarter. Research in both the UK and the U.S. shows that the number of disputes is on the rise. However, the number of major cases going all the way to a full trial or arbitration hearing is declining. Many businesses view litigation as a last resort and none want to be led into court blind.

As the provision of professional services in all disciplines becomes more sophisticated, clients' expectations of their litigation lawyers have become higher. Buyers of legal services expect litigation lawyers to deliver more creative solutions to and to offer greater control over their disputes. Where court action or arbitration is necessary, clients want lawyers who are focussed, effective and proactive.

The majority of law firms do offer high levels of service, but what will differentiate the great litigation lawyers from the merely good ones are those who can deliver to their clients a flexible, innovative and project managed approach to disputes which adds real value.

The Challenges

When researching the attitude to dispute resolution of in-house counsel and other buyers of legal services in the UK and Europe, Eversheds found that many expressed disappointment that their litigation lawyers were not more proactive in their approach. Research in the U.S. has produced similar results. Instead of approaching the resolution of a dispute as a business project, those surveyed felt that their advisers took a reactive approach to litigation, acting as 'process engineers,' with little or no defined objective and no early and ongoing cost/benefit analysis.

Our research showed that unnecessary costs, waste of management time, bad publicity and brand damage are the key concerns for businesses when involved in a dispute. However, if only a reactive approach to dispute management is taken, businesses leave themselves much more vulnerable to the factors that they perceive to be the most damaging.

Costs

Research shows that, although the volume of individual disputes is rising, the legal spend on dispute resolution is relatively static. Businesses are demanding more for their money. They want early advice on the merits of the case, their options and how to achieve the best solution.

Transparency on costs is key.Businesses need to understand not only what their legal teams estimate the cost will be for each stage of the case, but also how this has been estimated. Lawyers who discuss the underlying assumptions that have been applied when estimating will help their clients to understand the financial impact if circumstances change and those assumptions consequently need to be altered.

Furthermore, costs should be clearly linked into a pre-agreed strategy. If lawyers truly understand a dispute and what the commercial drivers for the business are, then they can suggest ways of planning costs consistent with that agreed strategy. Clients also demand that their litigation lawyers be more creative in their approach to costs. An open discussion at the outset of a case, as to the key points in the dispute to which client resources should best be applied, will lead to a more effective use of time and money.

Management time

There is no getting away from the fact that disputes require attention from senior management. The role of the litigation lawyer should be to ensure that management time is utilised effectively and to minimize so far as possible the impact of a dispute on the day to day operations of the client's business.

Litigation should not feel like a rollercoaster. A reactive approach to any dispute can lead to a white knuckle ride for the business. It can appear to the client that the loops and dips along the way have not been anticipated by their legal team, and that there has been no attempt to smooth the ride, or consider an alternative route. The role of litigation lawyers is to work with clients as a team to consider and agree the most appropriate course for resolving the dispute, the potential obstacles to this and to formulate a strategy to deal with these and achieve the best practical outcome.

In order to do this, a dispute needs to be properly scoped at the outset. Each person in the team, whether he be an external lawyer or from within the client, should understand precisely what his role is and when he is likely to be required to undertake that role, with what result and at what cost in terms of time and money. Planning should be in place to avoid duplicated efforts, as well as to measure what is being done against what was agreed upon and expected. Also, the unexpected is always to be expected in litigation. It comes with the territory, no matter how well anyone's plans have been laid out in advance.

Linked to this, businesses need reporting and updates from their litigation lawyers at a level of detail and frequency that suits them. Legal teams must tailor their communications, having ascertained at the outset what their clients need and how they can assist in communicating to key members of the clients' organisation.

Publicity and brand reputation

No lawyer should view a dispute as a discrete legal problem. The wider ramifications for the business need to be fully understood in order to find a strategy that complements rather than contradicts the overall business plan.This includes an understanding of the market impact of a potentially public dispute. Does the issue in dispute merit not just the exposure in time and costs, but also the potential risk of bad publicity and brand damage? How can such risks be minimised and managed? Equally, is the issue of such importance that litigation is necessary in order to protect the brand?

The Solution

It came as no surprise to Eversheds that businesses are demanding a more focused and results-driven approach to the management of their disputes. To meet these needs, Eversheds has developed 'RAPID Resolution,' building on the strengths of our pioneering approach of Early Case Assessment in the UK. In particular, we have introduced project management and budgeting skills to the handling of disputes.

RAPID is an acronym for Review, Analyze, Plan, Implement and Deliver.

Review

At this first stage we and the client establish the essential facts to produce a concise outline of the case. We look at the business context, the major issues and whether it's actually a fight worth having. Key documents, key witnesses and the likely opponents are all evaluated. We have developed innovative ways to help our clients manage this evaluation process from the outset. We assist our clients in putting in place, for example, document retention and creation policies, to deal with the increasing demands of e-disclosure.

Analyze

Having initially established the key facts, we assess in more detail the strengths and weaknesses and the options available. We examine the potential risks, and the time and costs of taking different courses of action. We ask our clients what they want to achieve. For example, if they wish to obtain the best possible outcome, are they willing to pay the costs that this might involve?Do they need the case resolved quickly, perhaps involving some form of compromise? Is this a fight that is business critical, requiring intelligently aggressive, no-holds barred litigation? These are the type of questions that help us to formulate a strategy based on our clients' objectives.

Our approach is to think ahead and develop a pro-active strategy, which can help our clients to plan the best way to get the right results. We aim to get the outcome that our clients are expecting and, crucially, at the price that they are expecting.

Plan

Next we agree the strategy for achieving the best practical outcome.All of our lawyers have received specialist external project management training, which also forms part of our advanced litigation skills training. We make recommendations regarding the resources likely to be needed, with a clear timetable and a budget for every step of the way. We have developed sophisticated tools in order to produce detailed costs plans at the outset of disputes, which are capable of review and, importantly, can be mapped against actual legal spend. The use of these allows our clients to understand and remain on top of where costs are best incurred. The costs plans allow us to agree with our clients a menu of costs and determine the likely costs of each stage of the dispute, given the ingredients and whether fixed prices for certain elements of a dispute should be set. It also means that, if any of the ingredients change (as they may well do), the impact on this on the overall costs is transparent. We give our clients clear documentation based on project management principles which can then be communicated to others within the client organization, as necessary.

Implement

This is where the strategy becomes a working, practical reality. If events change, then RAPID Resolution has the flexibility to react straightaway. We consider the project plan regularly and reappraise the position and approach if necessary.

Deliver

Having concluded the case, we follow up on any outstanding points, communicate any 'lessons learned' and identify any future risks to the business. This means that we don't stop assisting our clients when the dispute is over. We work with them to suggest what can be done to predict and avoid similar disputes in the future.

The benefit of our approach is that our clients have greater control of the dispute. We help our clients to drive events, rather than be driven by them. RAPID Resolution allows us to work with our clients to agree on the approach which achieves the optimum balance between the time and costs that they want to invest in the dispute and the result they want to achieve. This allows a degree of certainty that is often elusive in traditional approaches to dispute management and litigation.

Conclusion

Businesses still want smart and vigorous litigators but, to succeed in this arena, lawyers also need to be innovative, proactive and commercial. Our metrics show that RAPID Resolution works. In 90% of our cases, we successfully deliver the client's best practical outcome. One client has commented '[RAPID] is so closely akin to the way that we would run and manage a programme within Cap Gemini that I would absolutely support it in future scenarios and future situations where litigation and inclusion of lawyers as part of a solution was an essential part of the way forward' (Peter Smith, Vice President Cap Gemini). The RAPID Resolution approach has also been recognized as 'a stand out innovation' in the Financial Times' Special Report on Innovative Lawyers, in June 2006.

Bill Gilliam , a Partner in the firm's Newcastle office, specializes in heavyweight commercial and corporate disputes. He has particular expertise in the dispute management of major IT and healthcare projects.

Claire Frater is an Associate in the core commercial litigation group, specializing in complex commercial claims.

Please email the authors at billgilliam@eversheds.com or clairefrater@eversheds.com with questions about this article.