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December 29, 2016 Practice Points

Gold-Plated Pleadings

Tips for in-house counsel to help control costs.

By Taylor Brown

In-house attorneys are under constant pressure from corporate leadership to help boost margins. While some of this can come from pursuing judgments or insurance recovery, those are limited pots at best. The only other significant value area that a general counsel’s office can directly control is outside-counsel spend. This target has the added attraction of being purely “non-productive” overhead much like in-house counsel themselves; as a result, the outside counsel we use are deluged with requests to reduce their bills. The obvious topic of these requests is the hourly rate. The problem with attacking the rate is that once again it’s a limited pot. When you bill by the hour, there is only so much room to shave rates and still meet your imposed targets or make a living. Even using alternative billing arrangements—such as flat fees, cost sharing, and contingency fees—may not move the needle enough.

One area that complements all the negotiation on billing costs is collaboration between in-house and outside counsel to develop an appropriate strategy for each case. Unlike a plaintiff drawn from the general public, corporate counsel can substantially assist in strategy development. This process should include level-setting expectations regarding outcome, strategic planning, and realistic budgeting.

Having a frank discussion about the objectives of the representation and what constitutes a win in a particular matter will also drive the strategic planning and budgeting. Is the client aiming for monetary damages, or something less tangible such as injunctive relief? In some cases, the cost of pushing all the way to a win, even when you have a good-faith cause of action, may result in a Pyrrhic victory, so we may instead be aiming solely to get the opponent to the bargaining table. Having this discussion will ensure that outside-counsel efforts are focused in a way that will drive client satisfaction, making a larger bill more palatable.

A more difficult topic to zero in on is the amount of work required for each bit of legal work. There’s an obvious floor to the amount of work required to do a competent job on any given pleading, but a ceiling is harder to establish. The level of effort typically expended can vary wildly based on firm culture and part of my job as in-house counsel is to identify a firm that fits my needs; I shouldn’t hire a formally trained boxing champ when I need a street fighter. I also need you to understand what I want though, and refrain from expending hours when it exceeds what I want or what the circumstances really demand.

The worst time to discover that there’s a mismatch in our understanding of how hard you should be working is when I review your monthly bill. Even if your representation is perfectly competent and you’re driving toward the desired goal, if you insist on gold-plating every motion and pleading, your bills will inevitably exceed my expectations. If there is something that legitimately requires an all-out, flawlessly written, and exhaustively researched effort, then let me know and we can get on the same page. However, if the relevant statute governing my complaint cites to a specific set of cases, then your research should probably center on validating that those cases still represent the current state of the law. Billing another 20 hours of research time to explore every precedent referenced within those cases might be reasonable in certain high-stakes circumstances, but will generally not be useful or appreciated. There are times when good enough is just that.

Keywords: litigation, corporate counsel, cost control, relationship, management, budget

Taylor Brown is assistant general counsel with PAE Government Services Inc.

Copyright © 2016, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).