Beyond Biglaw: The Litigation Audit
The idea of asking for a second opinion, as a standalone "legal product" acquired from a separate firm than the one acting as lead litigation counsel, is underutilized in the litigation marketplace.
Welcome to 2016. As with any other year, 2016 will find companies big and small embroiled in litigation, and spending a lot in the process. One of the things that has always puzzled me about the way clients approach litigation, especially important cases, is how much resistance there is towards making an investment into a second opinion on the handling of the case. Or a second opinion on whether the business objectives for the case remain reasonable and achievable once the litigation process has commenced.
I know that the most common association lawyers (like everyone else) make with the concept of a second opinion is to the medical profession. Unsure about your board-certified dermatologist’s assessment of the potentially dangerous blotch under your left eye? Initiate operation “second opinion,” starting with a poll of family, friends, and random strangers about the “best” dermatologist they can recommend. Then call in whatever favors necessary to get an appointment with the one who sounds best, before the blotch can disappear of its own accord. Rejoice when the second doctor tells you that thankfully everything looks normal — and that you deserve lavish praise for “not taking any chances” by getting it “checked out.” Finally, go back to an anxiety-free existence.
What we are comfortable with in the medical context does not necessarily translate well into the litigation world. That is not to say that lawyers do not ever find themselves in a position to review each other’s work, and offer opinions to clients as a result of that review. Such reviews happen frequently on important cases, at least on an informal basis. At the same time, the idea of asking for a second opinion, as a standalone “legal product” acquired from a separate firm than the one acting as lead litigation counsel, is underutilized in the litigation marketplace. Inertia plays a role in the current state of affairs, as does the idea that litigation expenses are already too high. Additionally, getting egotistical litigators to admit that they can benefit from a second set of eyes reviewing their work is a difficult task.
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In my experience, most litigation “second opinions” come into play after something has gone wrong in the case. Either a case that was supposed to settle blows up unexpectedly, or there was an adverse decision by the court. Likewise, poor handling of experts or depositions — particularly of key corporate witnesses at the client’s end — often leads to a new set of hands brought in. But waiting until things go wrong is not really an ideal approach, and quite frankly negates the potential benefit of a litigation audit, at least as contemplated here.
So what would a litigation audit look like as a standalone product offering? First off, and admittedly selfishly, I think it is a product that makes the most sense when offered by a smaller, specialized boutique firm. In fact, I think hiring a small firm for a litigation audit is a great way for a sophisticated company to vet smaller firms as potential litigation counsel, especially when there is a desire to reduce the company’s overall litigation spend by shifting work to cheaper, yet still high-quality, providers. But as discussed below, there is no need to advertise the work as an audition.
From a cost perspective, it makes sense to price the litigation audit on a flat-fee basis, perhaps keyed off the expected scope of the “review” that is being commissioned. Having a contained cost for the second opinion can help make it more palatable as an investment, while also incentivizing the provider of the second opinion to offer streamlined and focused analysis. This is not a product that should be “leveraged” by including an army of associates. The whole point is to have experienced counsel, who are qualified to act as lead counsel in their own regard, offer their learned opinion of how the case is being managed. I believe that clients would be very surprised just how reasonably firms would be willing to price this kind of work on a flat-fee basis, even when there is no expectation of getting hired to act as lead counsel on future matters. Even without that carrot, there is no doubt that many firms would treat these types of products as plum assignments.
In fact, making it clear that this work is not an audition for future lead counsel work could go a long way towards making sure that the second opinion consists of unbiased advice. Taking away the temptation to upstage incumbent counsel will focus the firm offering the second opinion on the task at hand — to confirm that the case is heading in the right direction, consistent with the business objectives underlying the litigation in the first place. Accordingly, any second opinion should involve discussions (preferably onsite) with both the in-house legal team and the business principals interested in the case’s outcome, to make sure that the case is on track to meet the company’s business objectives. If it is not, for whatever reason, that information should be communicated as part of the second opinion — even if the circumstances leading to that conclusion have nothing to do with the merits of the case. At the same time, a thorough review of the merits, and the arguments being advanced by both sides, is an integral part of a useful second opinion.
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Ultimately, a litigation audit can be a valuable tool for companies and firms embroiled in high-stakes litigation. Relative to the overall cost of a case, securing a second opinion on a flat-fee basis can have an outsized favorable impact on the eventual result of the case, especially when you consider how deep the pool is of firms qualified to offer this service at a very high level. It may seem like a luxury, but all it takes is one situation where the audit turns up an avoidable defect, or problem that gets addressed before it can harm the case, to turn today’s luxury into tomorrow’s necessity.
Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique. The firm’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.
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