Just in time for the holidays, I propose a gift that in-house litigators can give to themselves and their legal departments: Hire a deeply experienced litigator, for a fixed monthly fee, as co-counsel for your high-stakes litigation matters. I think you will find this to be an excellent way to decrease litigation costs, while actually increasing the quality of your outside litigation team.
Experienced outside litigators might indulge the fantasy that they can bill 200 hours at top hourly rates, month after month, year after year. But the reality is, virtually all litigators, regardless of experience and ability, have many “slow” months or even years, resulting in peaks and valleys in their monthly billings. I submit that many of these litigators will willingly, even enthusiastically, fill in these inevitable valleys by joining interesting, high-stakes litigation matters as a co-counsel at a fixed monthly fee. Especially if that experience exposes them to a new potential client. Think of it as a spot market for normally high-cost legal talent.
Hiring a fixed-fee co-counsel on high-stakes litigation matters has many benefits. I have had personal experience with those benefits in my own career, having had the opportunity to work on interesting IP litigations through a fixed-fee litigation co-counsel service called ProCounsel.
First, moving a significant portion of outside litigation spend from a variable cost “bucket” to a fixed cost “bucket” deprives plaintiffs of their prime source of settlement leverage during the early months (or years) of a litigation — the dreaded “nuisance value settlement” — a misnomer since such settlements can reach five or even six figures, which is more than a nuisance for any defendant.
Second, hiring an experienced co-counsel will enable you as the in-house litigator to selectively move tasks from inexperienced, and expensive, junior associates, which can significantly enhance the quality of the work product your outside counsel is generating, while also reducing costs. Yes, someone needs to train young lawyers, but why should the burden fall on your legal department to fund an expensive and inefficient “learning on the job” process for junior associates?
Third, a fixed-fee co-counsel provides a built-in “second opinion” throughout the litigation process. Such a second opinion is valuable in and of itself and, as a bonus, it will serve as a constant spur for your lead counsel to always bring their “A game” and to prove they are delivering value with their hourly billings. As you might guess, having an accomplished (and affordable) colleague “looking over your shoulder” is highly motivating for any attorney. Your lead counsel might not be thrilled with the arrangement at first, but they should adjust quickly, and learn how to work well with their co-counsel (if they can’t, another firm will happily take their place as lead counsel).
Fourth, this approach is low risk. Because the co-counsel is working for a fixed fee, you can “experiment” with the arrangement, as you gradually figure out which work to move over to your co-counsel. Perhaps discovery motions, or handling the depositions of “second tier” witnesses, or legal research. Your in-house legal staff, your lead counsel and your co-counsel will reach an equilibrium which best allocates the work among the three complementary parts of your litigation team.
Fifth, hiring a fixed-fee co-counsel is a great, low-cost way to evaluate potential lead counsel for future litigation matters. Think of it as a “try-buy” plan for litigators.
My proposal might sound like a radical solution to some in-house litigators. But it shouldn’t. After all, in-house litigators are the ultimate fixed-cost legal resource. When you have an extremely busy month, you’re not paid 5x or 10x your salary. Maybe your outside counsel shouldn’t be either.