Although it is slightly outside the main topics of this blog, below is an article that I recently wrote for the Orange County Chapter of the Association of Business Trial Lawyers’ quarterly publication. It is reprinted with permission.
When lawyers and laypersons alike think about the qualities of outstanding litigators, certain words and images invariably spring to mind: passionate and zealous oral advocacy; a meticulous and thoughtful strategist; or perhaps a thespian of the courtroom who knows how to persuade and charm a jury.
For some, the image of a “junkyard dog” litigator whose tenacity outlasts an opponent represents the quintessential image of the type of attorney they want in their corner. As I contemplate the lawyers who have had the greatest impact on my development as a business litigator, and have achieved the most remarkable results for clients, a different characteristic comes to mind which may be the most important of all: creativity.
This may seem counterintuitive because lawyers are not usually known for being imaginative or creative. Apart from notable outliers in our profession, most of us act and look much the same; from our hairstyles and dark suits right down to our tasseled loafers. But the concept of creativity comes into greater focus when we contemplate the fact that every lawsuit or similar legal conflict at its core presents a problem that needs a solution. The conflicts that our clients face range from a minor lawsuit that is mostly just a nuisance to an intractable conflict between partners that threatens their future prospects to enjoy a return on years of investment and collaboration. Like many problems, litigation dilemmas often spawn ancillary problems ranging from a law firm invoice causing a CFO severe heartburn to intrusive discovery that uncovers additional legal concerns.
Difficult problems require extraordinary solutions and the best and brightest in the profession are first and foremost problem solvers who achieve superior results by applying outside-the-box thinking that others would have overlooked. This is what marks the masterful from the mundane. My longtime mentor and partner, Roger Magnuson, uses a phrase for this type of unimaginative lawyer: they are “paint by the numbers” lawyers who never reach a level of mastery simply because they do not go outside the lines and think broadly about what they are doing. Let us consider a few ways business litigators can venture outside the lines and bring creative problem solving to elevate this craft to the extraordinary.
Client Expectations
Creativity often begins at the point of the engagement for legal services. Clients are with increasing frequency seeking alternative fee arrangements to advance a variety of interests not the least of which is to obtain legal services through a more economical structure. The way in which lawyers are paid has evolved from the “services rendered” statement to the detailed hourly invoice used for the last several decades to a new era in which clients expect us to creatively place a value on the unique perspective we bring to the table. We are all aware of the typical alternative fee arrangements including contingency fees, flat fee billing and fees tied to milestones in litigation. But there are a thousand variations on these and other fee arrangements. Here are a few:
- Discount an hourly fee with a proviso that, if a particular result is obtained, that discount is earned on the back end.
- Bill the matter hourly at full rates, but if the firm prevails at the end of the case and obtains an attorney fee award, any fees that the client is awarded will be retained by the firm.
- Success fees can be put into an agreement early in the case depending on the results achieved in settlement. Suppose your client is sued for$1 million. You could agree that if you obtain a settlement of $250,000 in the first 120 days, the firm will receive a $25,000 bonus for that result.
- This counters the economic incentive that is inherent in a straight billing arrangement and motivates early settlement.
- There are also variations on the flat fee. A client with cash flow concerns can agree that a payment will be made each month for a set amount irrespective of what the fees are and will ultimately pay the full amount even if that means the firm carries a receivable for a period of time.
New engagements present an opportunity to reconsider the client’s expectations and the lawyer’s reasonable desire to be fairly compensated for services rendered. The best approach may be a new blend of fee arrangements that is only discovered by moving outside the fee arrangement paradigms.
Case Management Creativity
The next opportunity for creative collaboration involves your opposing counsel. It is easy to allow a piece of litigation to proceed down the familiar path of reaction and response. The drill is all too familiar. A plaintiff files and serves a complaint; the defendant seeks an extension then files a demurrer or motion to dismiss. Someone commences discovery, boilerplate objections are served, depositions are scheduled, and “nasty grams” are exchanged over timing, sequence, and priority for depositions. Meet and confer letters are exchanged with lots of cut and paste language about the usual objections. Mediation is scheduled after about 9-10 months of this back and forth and the case comes to a close. But “Groundhog Day” litigation is not the only way to litigate. There may be a road less travelled that, depending on opposing counsel’s level of cooperation, will lead to a better result for both sides.
Clients and our courts may be well-served by our initiating a dialogue with opposing counsel over case management, particularly when it comes to discovery. Last year, I represented out-of-state clients in a case in which we were contemplating about seven depositions, some in California and some out of state. My office was about halfway between opposing counsel’s office in San Diego and his client’s office in Los Angeles. We agreed to a deposition schedule in which all depositions would be taken at my office, including my out-of-state clients’ depositions, that the depositions would proceed two days-a-week over seven weeks, alternating between plaintiff and defendants until completed and I would cater lunch for each day and validate parking for our adversaries. It was a relatively small thing, but the arrangement worked out well and saved the headache of formal deposition notices and priority and location fights. The deposition schedule proceeded without a hitch and, although we had plenty of other things to fight about, we were all able to focus on the merits of the case rather than silly fights that have consumed lawyers all too often.
This type of collaboration requires trust and a certain amount of “horse trading”—agreeing to waive rights and come to a consensus. Each side must set aside their distrust for their adversary and give up something to get something. Here are some other case management ideas:
- Rather than fighting over definitions of terms in a document request and crafting duplicative and overlapping demands and objections, agree with counsel as to the “first cut” of documents that would need to be exchanged in the case and a basic protocol for obtaining e-discovery.
- Consider meeting and conferring before filing a demurrer (as required in the United States District Court, Central District of California before filing a motion to dismiss) and exploring whether issues in the pleading can be resolved without judicial intervention.
- Craft a real and meaningful joint case management statement (beyond the Judicial Council form) that includes practical suggestions for how the case can be managed with as little judicial intervention as possible.
Consensus Creativity
Sometimes jettisoning a paint-by-numbers approach requires judicial buy-in. Judges, like the rest of us, may be challenged to think more creatively unless they recognize that the solution will result in conserving judicial resources.
I recently represented a client in what could have been an expensive and protracted consumer class action lawsuit involving the application of a California statute to my client’s business practice. Shortly before our first case management conference, I was served with a stack of discovery from plaintiff’s counsel. That discovery prompted a conversation that eventually led to our mutual recognition that the entire case boiled down to the interpretation of a few phrases in the statute. It was apparent that the parties would be well-served to obtain the Court’s interpretation of the statute sooner rather than later. We recognized that we could achieve that end by submitting stipulated facts and briefing on the question presented. With the approval and support of the Court we then held what the Court termed a “bifurcated trial” on statutory interpretation. The Court ultimately agreed with my interpretation of the statute and dismissed the case.
Beyond the result achieved, the client obtained an efficient resolution. The entire consumer class action lawsuit consisted of the filing of a complaint, attending a case management conference, briefing and oral argument and entry of a final order. Not one deposition was taken and no demurrer or other motion was ever filed. Even though my client prevailed, the plaintiff’s counsel was also a winner in a sense. He presumably represented his client on a contingency fee basis and was far better served learning that the court did not share his interpretation of the statute earlier rather than months or years down the road after thousands of dollars in costs and fees were spent. Just as important, the case required far fewer judicial resources than if we had taken the long road oft travelled.
Closer Creativity
Perhaps the greatest opportunity for attorneys to stretch their creativity abilities is in bringing the case to a conclusion. Every case has a takeoff followed by a flight pattern of varying durations and an eventual landing—whether of the smooth or crash variety. Since most cases come to a close through a settlement, it is critical that litigators consider creative ways to resolve what would appear to be intractable conflicts. Here are a few creative settlement concepts to consider.
Several years ago during the worst of the recession, my client was pursuing a defendant on a contract claim. There were defenses to the claim and the defendant was thus paying its counsel significant fees in the litigation. Counsel represented to me that his client was on the verge of bankruptcy would not be well-served if I obtained an unenforceable judgment ten or twelve invoices down the road. We came up with a resolution. The defendant stipulated to a judgment on the contract in an amount modestly discounted. My client agreed that the judgment could not be executed for the next 18 months. This breathing space allowed the client to wait and see if their adversary (a former customer) would weather the economic storm. If they did, we could execute on the judgment and be in the same position we would have found ourselves with a win at trial, but without having to spend the fees to get there. If the business did not survive, we would save a significant amount in fees. This turned out to be a resolution that was in the best interest of both clients.
Creativity is sometimes the missing ingredient when the sun is setting as the parties sit in the mediator’s office at the end of a long day, still miles apart in their offers and counter-offers. Rather than packing the bags and heading to the parking structure, pause and consider a few alternatives.
One approach is to convert the failed mediation into arbitration with specific parameters. Assuming that the mediator who knows the case and has invested several hours into learning the relevant facts and law is respected by both sides at the end of the mediation, empower him or her to be an arbitrator. Schedule a further session in which the former mediator now arbitrator will be given an abbreviated presentation of evidence, a closing argument and then make a “baseball arbitration” ruling within an agreed range—the parties’ last and best settlement offers. Each side submits a number to the arbitrator who then chooses which number is the more reasonable and equitable. Both parties are incentivized to propose a number that is as reasonable as possible so that it will have the greatest likelihood of being chosen.
Some of the best creative settlement proposals involve gifts to charitable organizations. It is often the case that the thought of a plaintiff receiving a settlement check is more abhorrent to the defendant than the pain of parting with those funds. The parties can agree on an amount that goes not to the plaintiff, but to a third-party charity (such as the Public Law Center—shameless plug) that the two adversaries support. The gift can either be anonymous or accompanied by a message stating that the gift is being donated as a way of resolving differences and supporting the community. Again, everyone wins. The plaintiff might enjoy a nice tax deduction. The defendant receives some gratitude and respect for selflessly allowing the charity to receive the fruits of his or her litigation. The charity, and by extension, our community is supported.
One of the things I enjoy most about being a litigator is applying these types of new ideas to settlement strategy. It is refreshing to put down the case law and the mountains of papers that we generate and remember that behind almost every case are the faces of real people with strong emotions and significant business concerns. If you look closely at the faces of these litigation participants, you will see something further—hurts, egos, offenses, bitterness, greed and disappointment. Grasping what is really going on in the lives of these individuals is sometimes the key to settling a case. Most seasoned litigators can recall the effectiveness of an apology or sincere statement of regret in bringing about resolution. But too often we pass over this opportunity because we are inextricably tied to the legal concepts and facts set forth in our mediation briefs with excruciating detail and precision. My friend, Michel Zelnick of the The Zelnick Group is a lawyer, CPA and psychotherapist who works with the most difficult of these conflicts to bring about resolutions to fractured relationships. Calling on a psychotherapist to resolve a case is certainly painting outside the lines but may be just the missing ingredient to resolving a challenging case.
Conclusion
There are many things about the practice of law that make this a great profession. Chief among those is the ability to solve problems by applying not just rote knowledge and technical acumen, but artful and creative solutions that others might overlook. Our courts are overcrowded and underfunded and there is no better time for members of bench and bar to step outside of our comfort zones and tired old ways of doing things to consider new approaches to achieving results for our clients and their adversaries. In addition to all of these benefits, it certainly is much more interesting and fulfilling to creatively paint outside the lines than to paint by the numbers.
This article also appears in the Vol. 15 No. 3 Summer 2013 of the Association of Business Trial Lawyers (ABTL) Report. A printable version of this article is available here.