War and Litigation Budgets
War is the last of all things to go according to schedule.
-- Thucydides (460 BC - 395 BC) in The History of the Peloponnesian War.
Bill Turner of Womble Carlyle recently wrote that "every day, C-level executives are required to make decisions that are even more uncertain and consequential than lawyers' fees for open-ended litigation. Should an aircraft manufacturer develop a new line of planes. Should a widget manufacturer open a new plant? Should a company sell a division?" The list could go on at some length. Many of these decisions made in the face of great uncertainty affect the future of the company far more than most lawsuits.
So how do we reconcile the uncertain cost of war with the requirement that C-level executives insist on budget certainty? Well, the first answer might be that litigation is not war, any more than football games played every Sunday during the fall. Both use the language of war, and both try to elevate their importance through the comparison, but neither comes close. But that answer is too easy.
So let me try this one. When one goes to war, one looks at a number of things, including the geography and natural resources of one's enemy. For example, US forces in Iraq were not allowed to go through Turkey at the outset of the war. Plans had to be changed. The amount of money the country is prepared to spend is not limitless. Plans change. Strategies and approaches change based on many factors, and cost is obviously one of them. One should be willing to handle a lawsuit involving $100,000 of damages differently than one involving $100,000,000. If you're prepared to proceed differently in the smaller case, why can't you proceed in that same fashion in the case involving more money if the client is willing to assume the risk of doing so?
The war analogy seems designed to take the power to allocate resources and assume risk out of the client's hands. Dan? (And everyone should know, Dan is my friend and I love the debates that we have on topics like this.)
I am known to be a sucker for your repeated and skillful baitings over the years but the war analogy should not be taken to extremes. I just like to quote what really "older workers" like "Thuc" have to say about the uncertainties of battle--and its cost.
I DO have trouble helping clients plan for war--but the hourly model seems to be the best way for our firm with litigation clients, most of whom know us very well. I recently revised a "war budget" for the third time since 2006. If it were a client that did not know us--and it was the first time out--I might do it differently, and partly based on your example.
But very few of our "first projects" for a client are litigation projects. (Not sure I have ever told that to you before.) We like to represent them on planning and transactional matters first. It makes a difference. Litigation is a truly horrible way to start "dating". But you can't always dictate the nature of that first real gig. Still, I always hope it is NOT litigation.
Litigation is expensive--and I try to talk everyone on both sides out of it--at considerable risk to my warrior persona. It's true: I beg for "no war". I argue. I plead for peace. I chant. If "it" still happens--or I can't nip it in the bud--everyone remembers that.
And then my team and I slowly turn into goddamn werewolves--and people look at me, Tim, Amy and Rob and even the paralegals and clerks funny for the rest of that engagement. They think there is something terribly wrong with us. They also pay us real fast--and return our calls in minutes, even in the middle of the night, and on the weekends.
Seriously, Pat, once stuff happens, Trust is Everything--no matter how you bill. To me (just me and mine anyway), and based on the way my firm does things, fixed fees would presuppose a lack of trust. I spend a lot of time with every bill; you and I have talked about it before. Ensuring value and budgeting can be done lots of different ways. So can planning for war. My firm just prefers to be a known quantity first.