Litigation Costs Black Hole?

How do you know if you are caught in a litigation costs black hole?

When I first entered the practice of law I worked in-house at Sega, the video game company. We were in a hyper growth phase and with that kind of growth comes litigation, all kinds of litigation, some legitimate, but most of it specious. During this time, our outside counsel bills blossomed, or more accurately, exploded, to the tune of over $1M per month. To me, that was a litigation cost black hole.

We fought everything all the way to the end. When the executives decided they wanted to sue and go all they way to trial (and sometimes even through the appeal stage) it led to a lot of litigation expenses. A LOT. That is, until the bills start pouring in, and adding up… and adding up.

When there is no end in sight to a case and more and more litigation is stacking up, the bills can seem overwhelming and endless. The lack of goals and strategy associated with our litigation portfolio led to mounting litigation expenses. In retrospect it was easy to see that having overall litigation goals, and more specifically, case goals, could have controlled these expenses. Most of these cases should never have seen the light of day and ended with a motion for summary judgment, but most did not.

If we had any type of goal in place and an associated strategy for reaching those goals, we could have curtailed most of our litigation costs. In fact, most cases could have been settled way before litigation costs started mounting in any significant way. If you are involved in litigation that does not have a realistic goal or strategy in place for reaching that goal, you could easily find yourself in your own litigation costs black hole.

Instead, climb out of this hole by moving from a mind set of “litigate everything” to “litigate just those cases that you must,” because doing so has a compelling, high-value business purpose. Settle everything else if possible. Be choosy.

If you do find yourself going down the litigation path, you can use the Just Resolve Total Costs of Litigation Calculator to help estimate your litigation costs. Knowing what to expect in terms of costs can also help keep you on track and out of the litigation costs black hole.