Wheat and Chaff: Juries and Litigation | | In Search of Perfect Client Service

Let me tell you a short story.

A senior in-house lawyer is meeting with the CEO to talk about a problem the in-house lawyer had been asked to solve. The in-house lawyer describes how his efforts at negotiation had failed, so he had taken steps to find a random person off the street so that person could resolve the problem for the in-house lawyer. The CEO looked at the in-house lawyer like he was out of his mind. The in-house lawyer, now worried by the CEO’s reaction, asked if the CEO would feel better if he instead chose 12 people randomly from off the street. The CEO fired the in-house lawyer.

Does anybody think the CEO is crazy? Me either. But let’s rerun the story with three extra sentences.

A senior in-house lawyer is meeting with the CEO to talk about a problem the in-house lawyer had been asked to solve. The in-house lawyer describes how his efforts at negotiation had failed, so he had taken steps to find a random person off the street so that person could resolve the problem for the in-house lawyer. The random person assigned to the lawsuit was Judge Smith. The Company’s outside counsel was trying to find some background on Judge Smith. The CEO looked at the in-house lawyer like he was out of his mind. The in-house lawyer, now worried by the CEO’s reaction, asked if the CEO would feel better if he instead chose 12 people randomly from off the street. The in-house lawyer assured the CEO it wasn’t too late to submit a demand for a jury.

Do the three highlighted sentences change the way you feel about the story?

Let me acknowledge up front that I am a litigator and there is nothing I love more about my job than trying cases. With that caveat, however, there are way too many cases filed and litigated vigorously that should never be litigated. And those cases always end up settling. Why? Because the issue involved is too important to let a random person or 12 random people decide the issue. Neither a law degree and a black robe or swearing the oath of a juror are qualifications to decide disputes between businesses.

Lawyers (both inside and outside, and frequently both sides of a dispute) involved in litigation do not spend enough time figuring out which cases are wheat and which are chaff, which must be tried and which can be settled. The result is a monumental amount of wasted money. Of course, that money is wasted on outside lawyers, so they’re happy. But at some level, isn’t the solution obvious?

Tomorrow, or someday soon, some thoughts on solutions.

http://www.whichdraft.com Jason Mark Anderman

This post makes a very important point. All legal work should be focused, at the very start, on preventing this kind of situation. While it’s easy to blame outside counsel for pushing unnecessary litigation for financial reasons, an in-house attorney should be savvy enough to rein in outside counsel and avoid these kinds of situations. Additionally, for contract disputes, negotiations should almost always be resolved without litigation (or even mediation) because the contract should be crystal clear regarding the key issues. In doing so, a potential litigator reviewing the contract should have the reaction that she can’t win the case and accordingly advise her client to settle. For that reason, I was always taught to draft contracts with the idea that the people who would be reading them someday would be litigators and a judge.
Too often, parties compromise on vague provisions regarding “reasonable efforts” or “agreements to agree” that open the door for later litigation. Often this failure is a result of spending too much time negotiating the best possible limitation of liability or indemnification language instead of focusing on issues that are much more likely to result in a dispute, such as goods/services descriptions, payment and payment terms, and delivery/closing time frames.