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MANAGEMENT MONOGRAPH
Controlling The Cost of Litigation
by Daniel A. Krohn
July 6, 1994
(revised 2001)



Using the most advanced technology available
Involving experienced counsel in the initial case planning
Creating virtual megafirms

    As most businesses have discovered, the cost of litigation in the 1990's is skyrocketing out of control.   As discussed in a recent Forbes article, companies are taking a serious look at the millions of dollars spent each year in legal fees.  Although litigation is a necessary evil in today's business economy, it does not have to lead to a major expense for the company.  The legal process can be streamlined  to work more efficiently and economically.  A few simple changes will radically cut costs.

    Gone now are the days when the only way to find legal authority was  to spend hour after hour pouring through case books and legal digests.  Several services are now available which allow lawyers to electronically access a wide variety of databases. Westlaw and Lexis/Nexis are electronic data bases which contain case law and statutes in all fifty states as well as some foreign law.  These databases also contain an immense number of journals and treatises which are frequently used in researching new approaches and trends in the law.  The development of CD-ROM disc information storage places hundreds of law books on a single compact disc.  This database can be searched by computer the same as on-line services such as Lexis/Nexis.  The search capability of these services slashes the amount of time spent in finding legal authority and improves the quality of the end product at a lower cost.  A few flicks of the wrist puts the relevant information at your attorney's fingertips.

    Along with advanced legal research programs, new computer technology is now available to control litigation costs.   Inter-office computer networks and E-mail systems greatly enhance law firm efficiency and reduces overhead.  Documents, pleadings and correspondence are created in a fraction of the time previously required and editing time can be reduced by as much as ninety percent. Documents previously prepared in a similar case can be rapidly revised, updated, and applied to the current case.  This significantly reduces costs by not reinventing the wheel each time the same type of work is needed.  Attorneys may rapidly tap the skills of others through email.  Documents can be easily shared and exchanged by email attachments or extranets. All of these technologies work together to decrease the amount of attorney time spent on a project and the overhead required by an efficiently run law firm thereby reducing the legal costs to the client.

    The second concern in choosing a law firm should be whether the firm uses experienced counsel in the initial case planning.  This is a significant concern because such planning avoids costs incurred by uncoordinated initial investigation and unnecessary discovery expense.  Although each case has its unique qualities, litigation is a repetitive process.  Experienced counsel has the knowledge to most effectively plan the course of a case due to his or her seasoning in the courtroom.  Every case should be examined for creative opportunities to achieve rapid resolution. Firms which use their experienced attorneys in this manner fully optimize the firm's talent.  This optimization provides you, the client, with superb legal representation at a reduced cost.

    Finally, the creation of a virtual megafirm for businesses which operate in more than one locale should be a major consideration.  It is understood that for optimum results, you need local counsel.  However, employing large independent law firms  for each locale, each duplicating much of the work of the other, does not maximize your legal dollar.  The same or higher quality work may be obtained through electronically tying together the counsel retained in each locale and creating a common database for all your attorneys.  This reduces duplication and provides substantial savings.  Your attorneys, working together, save you the cost of multiple billing.  Only minor adaptations of the common work product are needed to reuse the work for which you have already  paid.  The virtual megafirm will also give you the benefit of a wider range of legal talent on each project.  When choosing the law firms to integrate into your megafirm, consider smaller law firms.  These firms typically have low overhead, and integration of small firms may be achieved more quickly and more efficiently.  The legal ability of many small firms equals, if not surpasses, that of medium size to large firms.  Creating your own megafirm to handle your litigation needs will provide you with superior legal service at greatly reduced cost.

    With litigation a prominent part of doing business, the associated costs must be managed like every other facet of your business.  When the principles discussed above are applied together, you control litigation costs.  Picture the end result - a core of law firms working together for you in each locale with experienced legal staffing and state of the art technology.  This can only mean one thing, reduced litigation costs and superior results.