Legal Commentary

"Make this go away": Corporate America's New Take On Litigation

By Patrick J. Lamb

The online version of National Law Journal contains an interesting analysis of the impact the recession is having on how corporate America looks at litigation.  In For Litigators, A Different Kind Of Recession,author Karen Sloan analyzes various data and surveys and reaches some interesting conclusions.  Here is the critical part for me:

A survey of general counsel by Altman Weil, which is owned by The National Law Journal's parent company, in late 2008 found that 75% of general counsel had their budgets cut in 2009. The average decrease was 11.5%. "It's not down 2 or 3%. It's double digits," said Susan Hackett, senior vice president and general counsel for the Association of Corporate Counsel. "They can't afford litigation. There's a real sense of, 'Make this go away quickly and quietly.' "

Hackett has observed a greater reluctance by companies to initiate litigation or defend themselves in court. Instead, they are "looking to apply the least expensive Band-Aid" to their legal problems. "I'm seeing a greater focus on saying, 'We will try to make you whole somehow. What can we do? What do you want?' Sometimes money isn't the ultimate goal," Hackett said.

Hackett's point was echoed by Peter Sloane, a litigation partner at Cahill Gordon & Reindel in New York: "I see clients who are much more focused on the cost-benefit analysis before starting litigation. There's a much greater emphasis on thinking outside the box in approaching legal disputes."

About time.  I am left to wonder what the hell people were thinking about before.  Did they think litigation was like Madden NFL 2010, some computer game to play to satisfy some competitive urge? 

Litigation should always be the very last resort.  You are taking a business problem and asking someone else to solve it for you.  "Hey you, dud on the street, solve this problem for me."  We call that dude a judge.  And sometime we don't trust the one dude, so we go even further and look for 12 (or 6) perfectly average strangers with no special skill or expertise to decide how to solve a problem.  We call those strangers jurors.  This form of problem-solving is very costly, and places a tremendous load on the gladiators who stand in front of the dude or strangers. 

I am a lawyer whose favorite part of being a lawyer is trying cases.  But having stood in the well so many times and looked into the eyes of so many dudes and strangers (by the way, dude is not gender specific), I have come to know that trials represent, in many but not every case, a fundamental failure of imagination.  It's good to know that the economy appears to have stimulated imaginations so that businesses are finding ways to solve problems in different ways.

Full post as published by In Search of Perfect Client Service on August 17, 2009 (boomark / email).