Pro-Defense Litigation Philosophy Works … Until You Lose One ….

Inside Counsel magazine recently quoted the general counsel of the NCAA, Else Cole, as saying, “We know if we do begin to settle, we’ll have even more lawsuits filed against us” (September 2009, p. 14).   This is an interesting litigation strategy and one not atypical of large corporations.  It is a restatement of the deterrence theory and Domino theory.

The strategy is successful so long as you keep winning.  Once you lose a case — and all it takes is one loss — the opportunity to settle on your terms may have evaporated and now the defendant has even more lawsuits filed against it.

This is not to say that the anti-settlement strategy is a bad one.  Each company must make a strategic decision based on a number of factors, including management’s appetite for resolution, the need to set a precedent and make a statement for larger business purposes, and the not insignificant matter of whether insurance is involved.  If insurance is involved, then the decision to defend her settle has to extent been relinquished to the insurance company, which may not necessarily embrace a “defense to the death” philosophy.

“Junior Fees for Junior Lawyers?”

An interesting article appears in the latest issue of Business Week (August 24 & 31, 2009, p. 24) titled “Junior Fees for Junior Lawyers.”  Apparently some law firms are rethinking both their billing structures and their orientation and training programs for young associates.  Some firms, such as Howrey, put new law school graduates into a two-year training program that caps their rates at about $75 an hour and also limits the amount of hours they can bill their first and second years.  (They have also cut starting salaries from $160,000 to “only” $125,000.)  Drinker Biddle has apparently also launched such a program.

This may come as a welcome development to both insurance companies and corporate buyers of legal services who have long been fed up with paying $200 an hour or more for “baby lawyers” to learn on-the-job while handling an assignment, perhaps handling it inefficiently.

Of course, one swallow does not make a spring; two law firms does not make a trend, but in an era of tightening belts and budgets, insurance companies and corporate buyers of legal services (like risk managers) may applaud such nascent developments and encourage their own firms to consider the same.

“Junior fees for junior lawyers?”  What a radical idea!