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Corporate Law Departments

4 tips to effectively handle disputes and litigation in-house

Jessica Brand  Senior Specialist Legal Editor / Thomson Reuters Practical Law

Lauren Sobel  Senior Specialist Legal Editor / Thomson Reuters Practical Law

· 5 minute read

Jessica Brand  Senior Specialist Legal Editor / Thomson Reuters Practical Law

Lauren Sobel  Senior Specialist Legal Editor / Thomson Reuters Practical Law

· 5 minute read

How can in-house attorneys more efficiently and effectively tackle their increased workloads in areas of litigation and dispute resolution without going to outside counsel?

In-house attorneys are handling more disputes and litigation, particularly pre-litigation and discovery matters, rather than hiring outside counsel. This comes as budgets for outside legal spend continue to shrink. Given the complexities of litigation, how can in-house counsel more efficiently and effectively tackle their increased workloads?

Here are four tips that corporate counsel can use to better manage disputes and litigation in-house:

1. Partner with stakeholders early on

Building relationships and credibility with company stakeholders early on, even before the company is threatened with litigation, is one of the most powerful tools in-house counsel can use to efficiently and effectively handle disputes and litigation. However, counsel frequently focus on getting to know their legal colleagues, rather than actively connecting with other business stakeholders. Too often counsel only interact with stakeholders when a dispute arises that requires counsel to engage with other business units within the company.

In-house counsel should take the time to meet with different groups in the company to understand their needs and how they work, establishing a mutual trust, long before any dispute or litigation arises.

For example, getting to know operations or information technology stakeholders who are responsible for data retention and destruction, setting up proper protocols with them, and helping them understand the importance of compliance with those protocols can make all the difference in subsequent litigation and discovery. With established working relationships and proper retention and destruction infrastructure already in place, the tasks of locating, retrieving, and assessing information during a dispute is a much smoother process and can avoid serious issues like spoliation sanctions.

Similarly, for in-house counsel who handle employment disputes, establishing good relationships with the human resources team and clearly defining counsel’s role as an advisor and not a fact-gatherer are key. This can help prevent in-house counsel later being treated as a fact witness or compromising the attorney-client privilege. Having existing, solid working relationships with information technology and data privacy teams is also beneficial in these disputes, which can often involve the misuse of company devices or communications on company platforms.

2. Understand how to advise the company

Advising non-legal company stakeholders on the risks and benefits of pursuing litigation versus reaching a settlement is a critical task for in-house counsel. However, in-house counsel should make clear to stakeholders that counsel’s role is to assess legal risk and identify options for stakeholders, not make business decisions for them.

For more information on this subject, view the Thomson Reuters webinar, Effectively Handling Disputes In-House: Doing More with Less, which is available on demand.

When advising stakeholders on whether to litigate or settle a dispute, in-house counsel should understand the company’s general risk tolerance for litigation, given its cost and reputational consequences. Counsel should consider and be prepared to advise stakeholders on the opponent’s financial resources, the amount at stake, the amount of time corporate executives might need to spend on the litigation, the merits of the case, and evidentiary problems. Counsel should also keep in mind other commercial considerations such as the potential for a drop in stock price, disruption of ongoing business relationships, the inability to secure funding or investors, and any negative impact on insurability.

3. Know when to turn to outside counsel

In-house attorneys are often the experts on their own company’s business and legal issues and the nuances of their sector and industry. When and how much to involve outside counsel often turns on a combination of factors, including the size of a company’s law department and the nature of the dispute. It is often more cost-effective to wait until a formal complaint is filed before engaging outside counsel. Exceptions to this may include disputes that involve esoteric areas of the law, highly specialized topics with which in-house counsel is unfamiliar, or foreign jurisdictions.

When selecting and engaging outside counsel, finding counsel who is familiar with the industry and the area of law involved is paramount. Common ways of finding outside counsel include through word of mouth and by looking at websites geared toward in-house counsel’s needs. Another great way to find the right attorney in an unfamiliar jurisdiction is to research key cases in the relevant area of law and then look into hiring the attorneys listed as counsel on those cases.

After engaging outside counsel, in-house attorneys who maintain oversight tend to save money for their companies and ensure best results, particularly where the company’s sensitivities and preferred litigation outcomes may not be intuitive.

4. Be selective about outside resources

The resources available online for nearly any legal issue are numerous. Sifting through all that volume to find quality resources takes time, which is increasingly scarce for in-house counsel. Instead of wading through a slew of search engine results, it is far more efficient and effective to start with sources that counsel can confidently rely on, like newsletters from trusted law firms and reputable legal platforms.

This strategy increases efficiency and allows in-house counsel to be confident that the information they find is accurate and current. This type of research also allows counsel to take advantage of other attorneys’ expertise, instead of reinventing the wheel each time a new or complex task hits their desk. For example, instead of starting from scratch, counsel can search on third-party legal platforms for model form documents such as a cost worksheet or a document preservation letter with explanatory notes for drafting. Or, counsel can use a trusted legal platform’s practical guidance to implement a litigation hold, understand the nuances of the duty to preserve documents, and consider strategies for settling a case.

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