Improving An In-House Litigation Department

Please make these change promptly upon going in-house.

I’m about to celebrate 10 years as an in-house lawyer.

Approaching my “tin or aluminum” (are they kidding me?) anniversary, I was thinking about the things that we did to improve our in-house litigation function.  All the changes are obvious, but not everyone implements them, so here they are.

Retain the right outside counsel for the case.

When I arrived at the joint, I saw some terrible mismatches — generally big, expensive law firms defending two-bit cases.  Don’t do it.  Some large, dangerous cases may demand fancy outside counsel — that’s a matter of taste — but tiny cases almost never demand fancy outside counsel.  If a case poses no reputational and little financial risk, then retain a smaller, less expensive firm.  There’s no reason to spend more in defense costs than the value of the case.

Always retain competent outside counsel.

Retaining small firms does not mean retaining bad lawyers.  (Frankly, don’t retain incompetent lawyers at big firms either.)  You’ll see a bunch of briefs written by your outside counsel.  You’ll have opportunities to see your counsel in action — arguing motions, if not trying cases.  Don’t cheer along unthinkingly for the person who’s representing you.  If the lawyer’s no good, replace the lawyer.  Eventually, you’ll have a roster of outside counsel you can trust.

Enter alternative fee deals.

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If your corporation faces a fair number of lawsuits, then you can save money by bundling.  I don’t necessarily mean bundling 50 similar product liability cases and asking for flat fee bids.  Even if your firm confronts 25 real estate cases, 25 employment cases, 25 malpractice cases, and 25 breach of contract cases, those 100 cases can be bundled (to the right firm), and you can reduce your costs.  Many firms would be delighted to quote you a lower price for the certainty that the firm would be handling 100 cases next year.  Ask for bids.  You’ll be surprised what you’ll hear, and you could save a ton.

Forecast reserve changes.

Reserves sometimes change instantaneously, and there’s nothing you can do about that.  But you can sometimes sense that a reserve may change many months in advance.  Suppose you anticipate that you’re likely to win a case; you’re not allowed to take a reserve under GAAP.  But you could lose, and you know when the case is going to trial.  Predict that, after trial, the reserve may change.  The finance department will appreciate the advance notice.

Remember that jury trials differ from bench trials.  A jury will likely deliver a verdict within a day or two after the evidence closes.  The reserve will thus change, if at all, roughly at the end of trial.

Not so for bench trials.  The judge may not decide a case until many months after the evidence is submitted.  Don’t predict reserve changes that are unlikely to occur:  If a bench trial ends in June, you probably won’t see a reserve change, if at all, until the third or fourth quarter.  Make your predictions intelligent.

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Insist that your trial teams look like your juries.

Law firms delight in assigning three white males to trial teams, because law firms often have three white males to spare.  But your jury is not going to be entirely old, white male, and your trial team should resemble your jury.

Your trial team may not be as diverse as your jury, but there’s no reason why you can’t discuss with outside counsel, long in advance, which women or people of color will help try a case.  And remember:  Creating diverse trial teams does not mean “stupid pandering.”  You can’t have a young, African American woman sit at counsel table throughout the trial and not play a speaking role.  Your diverse members of the trial team should play significant roles at trial, so the jury doesn’t perceive you to be pandering.

I suppose that, if it really took me 10 years to learn that, then I’m a slow learner.

But it’s my gift to you.  Please make those change promptly upon going in-house.


Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at inhouse@abovethelaw.com.