Magazine article Risk Management

Three Simple Rules

Magazine article Risk Management

Three Simple Rules

Article excerpt

When faced with a troublesome claim, corporations and risk managers have a habit of contacting a "go-to firm"--the firm that has traditionally handled the company's litigation. The decision is comfortable and often based on a historical relationship that can go back for generations.

Certainly, assigning claim litigation to a go-to firm has its merits, but for those claims that can cause irreparable damage to a corporate balance sheet or dig deeply into the capital of a carrier, the old rules are just that: old rules for old times.

The world is experiencing a fundamental shift in the attitudes of younger generations. The changes in technology are overwhelming. Old business models are being shattered. The number of decisions that we must make are increasing exponentially while the time in which they are made remains constant, thus eroding the quality of decisions themselves.

As entertainment guru Peter Dekom observed in his book Not On My Watch, the most important change in the last century is not the development of the automobile, or the telephone, or the nuclear bomb, or the television or the internet. It is the speed of change itself. And, there is ever), reason to believe that the speed of change has impacted the practice of law.

New firms with innovative structures are emerging, and with this comes a growing need for corporations and risk managers to change the very process of selecting the right lawyers to litigate their claims. Applying three simple rules can aid the transition and ensure the best possible result.

Rule 1: Avoid the comfort zone. Retaining counsel on a "feel-good basis" is a mistake. Lawyers routinely tell a prospective client what the client wants to hear, not what the client needs to hear. To avoid falling into the comfort zone, a client should develop a counsel selection check list. Early estimates can be flawed, but a seasoned litigator should have no problem with the percentage of success, time to trial, the approximate length of the trial itself, and the cost (assume a minimum of $35,000 in litigation cost per day of trial).

Normally, the firm's "rain maker" will not handle the case. Ask to meet the lawyers who will do the bulk of pre-trial and trial work and interview them as well.

Rule 2: Be aware of hidden conflicts. A law firm must decline representation when faced with a true conflict of interest, so this is not a large concern when selecting counsel. …

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