Contact Us: jfildes@SolutionEngineering.com
Contact Us: jfildes@SolutionEngineering.com
Legal Project Management should be about execution - knowing what needs to be done, when it needs to be done, and by whom to reach a planned objective – but too often it is just about transaction management. Transaction management by itself does not bring early resolution of cases, which is the only sure way to reduce costs. Our proven approach adds the missing component to reduce costs, but first consider what recent surveys reveal about litigation costs.
Hourly rates do not reduce legal spending as much as the resolution strategy employed. (R.J. Tittmann, In Search of the Win-Win, Litigation Management, Spring 2014) An effective strategy can cut total hours to a small fraction, whereas rate pressure at best can reduce rates 10% to 30%.
Alternative billing arrangements can be effective in routine high volume claims, but not when the cost drivers are the number of witnesses, the number of documents, the complexity of issues, and the number of parties. (J. Pattillo, From the Defense. What’s It Going to Cost? Look at Major Drivers of Legal Expenses, Claims Management, March 2014)
A Litigation Cost Survey of Major Companies (Lawyers for Civil Justice, Civil Justice Reform Group, and U.S. Chamber Institute for Legal Reform, 2010 Conference on Civil Litigation, Duke Law School, May 10-11, 2010) found that the average annual litigation costs as a percent of revenues for the 14 responding companies increased 78%, but this increase was not due to an increases in hourly rates. Legal fees showed little change over the survey period. High costs of discovery are a significant litigation expense.
A survey of 828 legal firms handling plaintiffs cases and 715 legal firms handling defense cases (Emery G. Lee III and Thomas E. Willging, Litigation Costs in Civil Cases: Multivariate Analysis, report to the Judicial Conference Advisory Committee on Civil Rules, Federal Judicial Center, March 2010) found that every 1% increase in case duration raises costs 0.26% to 0.32%. Each 1% increase in factual complexity increased costs 11% to 13%. Cases terminated by trial cost on average 24% to 53% more than cases terminated by other means.
Another survey (Paula Hannaford-Agor and Nicole L. Waters, Estimating the Cost of Civil Litigation, Caseload Highlights, Court Statistics Project, 20(1) January 2013) with 312 responses from 43 states broke down the percentage of hours by litigation task.
What these studies make clear is that, although valuable, transaction management and legal fee pricing controls are not sufficient to cut costs to a major degree. Legal Project Management (LPM) by itself can reduce costs by some fraction of what is possible, but LPM does not address reducing the litigation tasks such as those involved in producing a reliable understanding of a product failure or accident, and this is what is needed to achieve early resolution, which is the key to reducing costs in a major way.
In contrast, our consulting approach stresses reducing litigation costs by creating an environment that drives early resolution of case, which substantially cuts litigation cost while improving effectiveness.
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