Wisconsin Business and Commercial Litigation

Last week, I wrote about the Shadley case, and encouraged that care be taken in selecting causes of action and damages when there’s an attorney fee clause in the underlying contract.  There are other lessons to be taken from that case, though, that apply to lawyers and clients alike.

It’s not unusual for clients to have unreasonable expectations, and for lawyers to do too little to correct the belief.  In Shadley, we can’t tell whether it was the client that wanted the damaged piano and her daughter’s education paid for, along with repainting a variety of rooms in the broken home, or whether it was the lawyer who encouraged the claims.  In the end, I guess it doesn’t really matter.  We just know that it didn’t turn out well because expectations weren’t adjusted.

It’s the responsibility of both lawyers and clients to work together to set reasonable expectations about the outcome of a dispute.  Clients come to lawyers to benefit from our experience and training — let’s face it, pretty much anyone can describe a dispute in writing and file it with the court.  That’s hows small claims court functions. 

Clients need to remember that part of what they pay for is our role as counsel:  our detachment from the emotion of the dispute and our ability to dispassionately weigh the evidence and arguments on both sides.  Sure, the advocacy part of the relationship is a big one, but that’s based upon a rational judgment as to what arguments and evidence are most convincing to someone who doesn’t care who wins or loses. 

Lawyers, for their part, should immediately share their opinions about expectations, and begin to educate clients on the possible outcomes of the dispute.  The Shadley case demonstrates that when the lawyer/client relationship doesn’t function completely properly, it can be costly.

I’ve recently been working on a number of cases in both federal and state court that involve out-of-state opposing counsel.  While they’ve either pro hac viced in, or have been previously admitted, it has been clear (painfully so, on a number of occasions) that they do not have experience with, and therefore do not understand, the way Wisconsin courts work.  Sure, you can obtain the local rules for the Eastern and Western Districts of Wisconsin and the circuit courts easily enough. 

But that’s not usually enough.  Which clerks will work with you and which won’t?  Often, local counsel will have a pre-existing relationship with the power behind the bench, the clerks and judicial staff.  Are there any twists to the local rules that don’t appear in writing?  The answer is almost always yes — but unless you’ve practiced there, you don’t know when those twists will grow into major kinks in your litigation.

Perhaps the best example is the Western District of Wisconsin, proudly bearing the colloquial title of the “Rocket Docket.”  Even though Judge Shabaz has retired, the timelines haven’t stretched noticeably.  Many are the out-of-state attorneys who heard tales of the Rocket Docket, but were caught flat-footed when they found that the legend was not only for real, but often understated the actual effect of the agressive schedules. 

The upshot of all of this is that when litigation arises, it’s vitally important to have access to counsel who know the courts, the staff, and the potential jurors.  Local counsel is worth the additional investment.

Undoubtedly most of you have heard about the Altman-Weil study which identifies most in-house counsel as “deeply skeptical” of their outside counsels’ commitment to changing pricing and staffing models. 

“This is a dramatic vote of no confidence from Chief Legal Officers,” said Altman Weil’s Dan DiLucchio, in a statement. “Either many law firms just don’t understand that clients today expect greater value and predictability in staffing and pricing legal work, or firms are failing to adequately communicate their understanding and willingness to make real change. In either case, it’s a big problem.”

The Business Journal provides some more discussion of the study.  From my perspective, this is actually heartening news.  Too often businesses and their inside counsel, acting out of habit or familiarity, return time and time again to law firms that do not provide the best service or the best value.  But comfort and history are two luxuries that are becoming less affordable all the time. 

Merely changing staffing models isn’t going to do the trick — outside counsel have to prosecute the litigation as part of the client’s overall business strategy.  This means that alternative billing arrangements should be discussed, in an open manner with a variety of options, including fee caps, blended fee agreements, litigation support economies, and other alternatives to the almighty billable hour.  If both the client and the lawyer want to be in business together, there’s generally a way to make it work for both.

There’s no question that some measure of “you get what you pay for” applies in litigation.  I’ve seen too many clients, in the face of stark evidence of who is the better lawyer, choose only the cheaper lawyer.  As with everything, there must be balancing of the often competing interests of victory and cost, as well as a clear identification of a client’s goals.  In my mind, the value of a law firm’s service should be measured by its contribution to its clients’ success.

Mike Dillon has a great discussion of this issue from the perspective of a general counsel, at his blog the legal thing.

Recently, I was reminded of the reasons that outside litigation counsel are an important addition to the legal services provided for an organization.  Like in-house counsel become adept at the many facets of contract and transactional practice, litigators, by virtue of experience, repetition, and volume, learn to identify potential problems in the litigation process and avoid them.  This is one reason, among others, that I believe litigation counsel should be the only contact with the opposing party until the litigation is completely concluded.

Even the negotiation of settlements can create problems for those who do not hammer out such agreements on a recurring basis.  In-house counsel (for those you who are reading this, I except you from this rank speculation) can forget that plaintiffs’ lawyers, unless you include in the original discussion something as simple as confidentiality, may demand additional compensation for adding a confidentiality provision later on.  Neglecting to negotiate this in the originally-agreed upon settlement package can needlessly increase the cost of the settlement.

You shouldn’t hire someone that you don’t trust to handle litigation.  Litigators expect, and we desire, that the client will have the final say on all matters important to a lawsuit, and particularly settlement terms.  But we also expect, and can serve you best, if you leave the communication with opposing parties entirely to us.

Dealing with outside litigation counsel can be frustrating.  And believe me, we outside litigation counsel know that.  To point the finger in exactly the opposite direction, it can be equally frustrating dealing with the corporate counsel or litigation manager assigned to the matter.  The additional layer of schedules and reporting, over and above that imposed by the court, can cause friction even in the best of relationships.  To top it off, all clients’ timing requirements and formats differ.

There are a number of things that have helped make it easier for me to make the corporate counsel, litigation or risk manager, or other company contact not only stay in control, but also appear that way their board or boss, which makes everyone happier.

First, provide to us a copy of the company reporting requirements with the first contact regarding the litigation, even if we already have a copy.  Remind us that there is an initial report and budget due within 30 days – if nothing else, it will prod us to calendar future reporting just as we do the court’s scheduling order. 

Also helpful, but less necessary, are litigation reporting systems, like Serengeti or TyMetrix, employed by many organizations.  Systems like this make it relatively easy to format the information in a way that’s helpful to you, and often provide the third thing that helps us sometimes-forgetful litigation counsel to report timely:  email reminders or some other form of notification.

We are often caught up in defending or prosecuting your interests, and our reporting will therefore organically occur based on the ebb and flow of the matter, rather than on the arbitrary 30-, 60-, or 90- day intervals you desire.  It’s not that we’re not happy to provide the information, it’s just that nothing in the substantive or procedural events of the case demands that sort of reaction on regularly-scheduled intervals.  Reminders help – and also help us to look at the requirements provided, and have the remainder of the due dates calendared.