Articles: A Perspective on Economical Litigation

Originally published in California Civil Litigation Reporter (May 1992), by Farley J. Neuman and Joshua S. Goodman.

Even most lawyers would concede that “economical litigation” ranks high as one of the great oxymorons of our day. Whether lawyers can be entirely blamed for this is somewhat beside the point. Dissatisfied clients are like the father who, on being disappointed by the sex of his new child, says to this wife: “You had it for nine months, what happened?”

Lawyers usually have the litigation for more than nine months, and can greatly influence its cost. For this very reason, we as lawyers should regularly consider methods for making the process more cost-effective.

For better or for worse, the litigation process has many inherent inefficiencies, is labor-intensive, and wastes both time and paper. We do not intend to propose in this article any new legal or legislative reforms. Instead, this article aims to highlight those means by which practicing lawyers can help make the existing system work more efficiently.

Most experienced lawyers will recognize suggestions in this article as things they do everyday, often by second nature. Thus, this article can serve as a reminder–to ourselves as much as to others–for the experienced lawyer, a basic checklist for the new lawyer, and, hopefully, a stimulus for further thought and exchange of ideas on the topic.

Cost-Benefit Analysis

A cost-benefit analysis lies at the heart of almost all efforts to make litigation more economical. Litigators make cost-benefit analyses daily on behalf of clients, consciously or unconsciously, with or without clients’ participation. For example, we routinely decide not to depose every person who might provide helpful information, and instead only depose those with the most important information.

While the cost-benefit analysis cannot meaningfully be reduced to a mathematical formula, the judgment should include considerations of at least the following factors:

The amount in controversy in the case;The likelihood of success, such as winning the motion or obtaining the desired information through a discovery procedure;Alternatives to achieving the same goal, such as a different discovery procedure, or a compromise agreement or stipulation among counsel;The cost of the procedure considered; and The impact of the procedure on the case if it is successful.

A cost-benefit analysis of some type should be made for all discretionary parts of a case, particularly discovery and law and motions matters. The analysis should also be shared with the client, whenever practical and appropriate. While many such decisions must be made in the trenches without an opportunity for consultation, participation by the client in such decisions will both foster a better client-attorney relationship and reduce the likelihood of a client second guessing the attorney. Clients like to know that their attorneys analyze costs and benefits before doing the work, and are less inclined to blame lawyers for litigation costs when involved in the decisions.

Moreover, clients should have the right to make decisions that affect the cost of their representation and the chances of success. Inclusion in decision-making helps reduce clients’ sense of helplessness, makes them members of the litigation team, and helps them to accept the ultimate results. As attorneys who frequently call the shots for our clients, we should all try to imagine, for example, a patient’s frustration when a doctor runs a battery of painful and expensive tests with no consultation whatsoever, or upon learning of the doctor’s decision not to perform certain procedures because they probably would not be life-saving.

Litigation Plan

Many clients require their attorneys to prepare detailed litigation and discovery plans and budgets at the beginning of the case. Even when not required by the client, we should give considerable thought at the beginning of a case to what will be required to prosecute or defend it. Initial budgets and discovery plans help to anticipate inefficiencies, duplication of effort, and fruitless avenues of work.

For example, if a case will have multiple parties and be document intensive, a central repository and uniform numbering and identification system for the documents should be considered. It is not uncommon for several parties to produce multiple copies of the same 10,000 pages of documents during the course of a lawsuit. Such blatant inefficiency is difficult to explain to the client.

As with the cost-benefit analysis, sharing the litigation plan with the client will improve the attorney-client relationship. No one likes surprises in their bills. We should take every opportunity to anticipate costs for our clients, and show them that we are avoiding or at least reducing them where possible.

Good Relations with Counsel

In our experience, nothing wastes more time and money than personal animosity between counsel. Unfortunately, the process, and often even clients, seem to encourage a “take-no-prisoners” attitude even though it usually runs counter to a client’s best interests. When the relationship between counsel is poor, the attorneys sometimes lose sight of the most efficient means of achieving the client’s goals, and instead focus on battling and “defeating” their opponent in peripheral matters.

The attorney should try to maintain a good working relationship with other counsel in the case in order to avoid unnecessary and costly disputes, and to achieve mutually beneficial and cost-efficient stipulations. This does not mean an attorney should waive a significant substantive right or give any favors that would jeopardize the client’s position. It does mean that an attorney should actively create an atmosphere of trust and integrity with opposing counsel. It is amazing what an opposing attorney will volunteer when this type of atmosphere exists. Also, many things can be accomplished informally at a fraction of the cost to the client, such as resolving discovery disputes, scheduling of discovery and hearings, resolution of minor procedural defects in pleadings, informal exchanges of information, and, ultimately, the settlement of the entire case. Despite the natural aggressive instincts that many of us have as litigators, we should endeavor to channel those instincts so that they do not interfere with efficient case handling.

Informal Discovery

Most attorneys love to talk about their cases, so let them. Frequently, far more information can be obtained about the other side’s contentions from a simple conversation than from the most comprehensive set of contention interrogatories. We do not advise blind acceptance of representations by opposing counsel; rather pick up the phone and try asking the opposing counsel what the factual basis is for his or her claims, or even the legal basis. From these informal responses, you can conduct formal discovery necessary to assure that you have not been misled. While there are occasionally tactical reasons for counsel not to disclose factual contentions, generally tactics mandate in favor of disclosure unless counsel has determined the case must go to trial and not be settled. It is difficult to settle a case without persuading the other side by disclosure of the facts, and there is generally no reason why this process of persuasion and disclosure should not start at the beginning of the case, rather than at the settlement conference.

Minimize and Manage the Litigation Team

We should keep in mind that the most efficient–although not always practical–way to handle all but the most complex cases is for one attorney to handle everything. Teams are generally assigned not for the sake of efficiency or the benefit of the client, but to allow the senior attorney to maximize leverage. Two types of inefficiencies result from the assignment of a team to a case. First, there is by necessity duplication of efforts because each member of the team needs to know many of the same facts and details. The second inefficiency if the slip side of the first: because each member of the team is not involved in all aspects of the case, strategic opportunities are missed because of lack of knowledge.

Not all cases can be handled by one attorney, of course. But we do advocate that the lead attorney plan assignments in a way to minimize inefficiency and possible damage to the client. There are no easy answers to how to accomplish this, but the key is to try to anticipate the types of involvement required of each team member and divide responsibilities accordingly. All too often, assignments are made on a completely ad hoc basis as the lead attorney is running through the hallway, late for a deposition.

Abbreviated Depositions

Particularly in complex commercial cases, complete depositions of the major witnesses may require three, four, or even more days to complete. One reason for the length of the depositions is that each attorney feels compelled to ask virtually every question possible because that is the first and last chance to depose the witness. To avoid such protracted depositions, you may want to consider proposing a stipulation to conduct abbreviated depositions on conditions similar to the following:

1. The depositions will initially only be scheduled for one day, and each party will retain the right to resume the deposition at a future time.

2. During the deposition, each party’s time for questioning will be limited such that all of the parties will have an equal opportunity to question the deponent. Typically, under these circumstances, the first attorney to question the witness is allocated some additional time in order to address the witness’ background.

In the few instances in which we have entered into stipulations along these lines, we have found two interesting things. First, it appears that about 95 percent of the relevant information can be obtained in about a half to a third of the time that we normally would have expected. Second, although the attorneys’ time for questioning has been severely restricted, they rarely decide to exercise their right to resume and complete their questioning, presumably because they believe that all meaningful information from the deponent had already been obtained.

Abbreviated depositions obviously will not work in every complex case. There may be legitimate strategic reasons for not entering into such a stipulation. Moreover, even when legitimate reasons do not exist, other counsel may be reluctant because they find it unusual or because it is “unfair” to subject their client to more than one deposition. Nevertheless, in the appropriate case, the procedure can result in substantial savings to all parties.

Cost and Task Sharing

It is often possible to share with other parties the costs of particular tasks. This is by no means limited to complex, multiparty litigation, although this type of litigation may provide the most opportunities for cost sharing. Even in a relatively simple case involving only two defendants, it may be appropriate to share in the cost of retaining experts in areas of common interest, an independent medical examination, or certain depositions. Careful thought should be given to any joint work with other parties to ensure a commonality of interest. Difficult problems can arise when a lawyer finds that he or she wants the jointly retained expert to render an opinion that might shift liability onto the other party paying that expert’s fees. In addition, joint work with other parties may also raise issues related to attorney work product and the attorney-client privilege, which should both be considered ahead of time.

As an example of task sharing, in a recent class action in which this office was involved, we advised our client not to file its own brief in opposition to the plaintiff’s motion for class certification and instead to rely on the opposition briefs filed by two major law firms. We stayed in contact with co-defendants’ counsel, made sure we generally agreed with their strategy, and reviewed a draft of one of the oppositions before it was filed. By following this strategy, our client was able to avoid thousands of dollars in legal expenses to research and prepare its own opposition brief. Of course, this was possible because all the defendants’ interests in opposing the motion were strictly in common, and because we had counsel on whose efforts we were comfortable relying.

Again, it is important to keep the client advised of these sorts of task sharing decisions. Not only it is ultimately the client’s decision, but the client can easily reach the wrong conclusion about an attorney who fails to do necessary work, such as opposing a motion, if the client does not know ahead of time that this is a strategic cost-saving decision. It also softens the client’s reaction when, as in our case, the counsel on whom you relied loses the motion.

Alternative Dispute Resolution

Alternative dispute resolution (ADR) should be considered at virtually every stage of litigation as a means to make the process more economical. Not only can an entire case be submitted to ADR, but particular issues as well. This is particularly helpful for disputes among defendants. In our experience, litigating liability or indemnity issues between defendants as part of the main action can only benefit plaintiffs. Rather than have the plaintiff’s attorney sit back and let two defendants fight it out, defendants should consider submitting their dispute to ADR and maintaining a united defense front. Appoint a Referee

For cases with specialized or technical issues, e.g., accounting, it may be possible to appoint a referee to hear and decide such issues pursuant to CCP §§638 and 639. See Neuman, Accounting Issues in Litigation: A Referee Can Blow the Whistle, 12 CEB Civ LR 345 (Dec. 1990). Use of a referee in technical cases helps both to reduce the cost of discovery and to aid in the resolution of certain disputes. Section 639 authorizes a voluntary reference, i.e., a reference ordered by the court on agreement by the parties. Even if the parties do not agree to a reference, §639 authorizes a compulsory reference–a reference the court may order under limited circumstances.

A referee or special master can also greatly assist in complex, multiparty litigation. They are commonly used in construction litigation to coordinate discovery and settlement negotiations, and to oversee the litigation generally. The cost of the special master is almost always offset by the savings realized from a more streamlined case.

Expert for Case Evaluation

In cases that will undoubtedly involve experts, counsel for either side should seriously consider retaining an expert at a very early stage in the case. The expert at this early stage can help the attorney evaluate the merits of the case, conduct discovery, or even reformulate allegations or defenses. We recently defended a case against a lending institution that financed automobile dealerships. Plaintiffs pursued the case for years on a theory that seemed extremely reasonable, only to find out at the end of the case that the theory was completely contrary to accepted practices in the industry and that no expert would testify on their behalf.

Conclusion

We cannot give an exhaustive list of everything an attorney should do to try to make litigation more economical. Rather, this article is an attempt to discuss some of the basic ideas that most experienced litigators already know and use, and to provide further thought on how to achieve–within the confines of our existing system–the most for our clients for the least cost. By making litigation as economical as possible and by involving the client in the process, we may not only deflect public and political criticism, but may also avoid the client who, upon receiving the bill, asks: “You had it for nine months, what happened?”