Litigation - Philips | Kaiser
Phillips | Kaiser

"Litigation is a part of doing business today. Handled poorly, it can ruin a business."

--- CRAIG KAISER, ATTORNEY

Litigation is often inefficient, expensive in money and resources, frequently long and usually ineffective in bringing about the desired result. The most challenging and frustrating aspects of it for management are the lack of understanding of the process and the loss of control. Timing, cost, and resolution include not only the company, but also the counterparty, lawyers, and judges. Avoiding litigation is certainly a good objective, but also understanding it and having a good process in place to respond when it occurs is important.

LITIGATION LEGAL CHECKLIST

  • Perform an early case assessment. If sued, immediately inform management, the board and, if applicable, the public relations department. Advise employees of the suit, instructing them not to speak publicly unless authorized to do so, and consider what public statement to make.

  • Evaluate insurance policies to determine if the matter is covered and, if so, what steps must be taken with respect to notice and hiring of outside counsel.

  • Initiate a litigation hold to preserve relevant documents.

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  • Hire outside counsel. In doing so, it is important to consider their reputation, expertise, track record, history with the court, office size for handling the matter. This selection should include assessment of the company’s thought on the importance of the matter and the manner in which it wants the litigation handled. In some instances, a high-profile lawyer might be appropriate, while in others a lower-keyed, backchannel type style may work better to effect a positive result without unnecessary fees and exposure.

  • Perform a case assessment and develop a strategy. This involves a thorough evaluation of the merits of the case, fully understanding the risks and costs involved in litigating the case. Such an assessment will surely require the outside counsel, but should also include a business-savvy lawyer, the general counsel if there is one, who can help advise on how the strategy ties to the larger objectives and strategies of the company. Alignment between company goals and litigation would include:

    • Importance of the litigation to the company and its strategic objectives.
    • The impact on finances.
    • The impact to the reputation with core constituents (customers, employees, shareholders, contractors, community).
    • The diversion of resources.

  • Prepare a litigation budget, which will help in deciding whether to settle early, later, or litigating to a conclusion. This budget should cover all stages of the litigation process, from pleadings, through discovery, through pre-trial, trial and post-trial. Such a budget can also include timelines, which help inform on the timing to conclude such a matter.

  • Actively participate in the management of the case. Throwing management of the case to litigators by not being involved enough to understand the issues is a recipe for runaway budgets and great frustration to the board and management. Management involvement should include getting periodic reports on not just what has occurred, but also the plan for next steps in the process.

  • Learn from the litigation process and circle learnings back into the business to avoid liability in the future. Better communication, effective training on issues to reduce risk of future lawsuits, and updating corporate policies are all examples of steps taken after litigation to improve the company and its risk profile.

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