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Litigation Is To Blame

Litigation forces you to pay experts to do non-expert work

Litigation, according to Judge Learned Hand

Almost a century ago, Judge Learned Hand said:

“As a litigant, I should dread a lawsuit beyond almost anything else short of sickness and death.”

His point was that not only is litigation ridiculously expensive, but that it also forces litigants to commit capital to something like a high-stakes, all-or-nothing game of poker, except the rules of the game are decided entirely by someone other than the two people paying to play--and there is a chance that in the end they both will lose.

Just as people would never choose to be sick (unless you are a kid hoping to get out of going to school that day), Hand did not think that businesses should choose to litigate except in extreme circumstances.

cost of litigation

As a judge himself, that massive expense ol' Learned railed against went, for example, to pay for this fine suit.

Why is litigation so expensive?

Point # 1: "Expensive relative to what?"

Well, the first point to make here is what we mean by "expensive"--expensive relative to what? Our adversarial system makes litigation inefficient compared to transactional legal work. And Hand highlighted some of the reasons for this.

Transactional work is predictable, whereas litigation is not. Transactional work results in (what attorneys call) work-product: a document or analysis, let's say, with which you can then go do something more valuable than the fees you paid your attorney to produce it. Litigation, in contrast, requires you to keep paying your litigation counsel's billable hour for him/her to simply exchange blows with your opponent's counsel, and the eventual result is not only uncertain, but is often worth less than the fees you paid to achieve it: the case could end in a stalemate settlement, a verdict that you lose, or a verdict that win but then have to deduct from the value of that victory the total fees you paid to achieve it.

It is not that litigators necessarily charge more per hour than attorneys who do mostly transactional work--although they may in some cases--it is that you are probably paying each type of attorney close to the same hourly rate, and when you compare the respective outcomes each attorney type might be able to achieve for you, you see plainly that the much higher ROI of transactional legal work makes the cost of litigation seem much more expensive "per unit of outcome value," or ROI.

Point # 2: Litigation forces you to pay experts to do non-expert work.

Even if we pretend that the eventual outcome of a litigator's work tended to be as valuable or more valuable than the outcome of a transactional attorney, you are still left with the depressing accounting of how your litigator's billable hours were spent.

A lawyer’s value lies (or should lie, anyway) in his or her knowledge. You would not dream of paying a lawyer $350 per hour to mop your floors. Ideally, she should only earn her hourly fee only when she has spent an hour using her knowledge for your benefit. However, in litigation, many activities require your lawyer’s presence for their entire duration, but only use her wisdom for small parts of that time. For example, in a day-long deposition, as much as half of the deposition time may be given to questions posed by other lawyers--not yours--with little impact on your position. During this time, you are paying your litigator $350 per hour to look out the window. It is not the litigator’s fault. She can’t arrange to be in the deposition only when her expertise is actually needed. Compared to transaction lawyers, the lengths of time in which a litigator “stands and waits” are far greater.”

This is what Judge Learned Hand meant when he warned against paying to play a game the rules of which you do not get to set. Many of your litigation activities are scheduled to suit someone else: the court, the jury, the witnesses, the lawyers. And you must pay for your lawyer to attend them all.

Point # 3: Inefficiency is the most common litigation strategy.

Unless you are a plaintiff who is worried about your opponent's ability to pay upon losing the case, one of your very aims is to wear the other side down. You try to exhaust your opponent's war-chest and willingness to fight. The easiest way to do this is for your litigator to force the other side into long, protracted procedures that drive up their costs to defend the case.

inefficient litigation cost

Chances are that less than one of percent of the documents in this truck are actually useful for the case.

You have seen this happen before in movies centered on big lawsuits. One side tries to bury the other side, with what is called discovery, by sending a box truck full of boxes containing hundreds of thousands of documents that your attorney must review, one by one. Opening boxes and scanning documents one at a time is not expert work. But who is doing the work? Your litigator. And who is paying for each hour she (or any member of her team) spends doing this? You are, as the litigant.

What can you do instead?

One of the fundamental premises of Veeto is that you can use automation technology to...

  1. Eliminate having to pay attorneys per hour to do non-expert work.
  2. And improve your chances of achieving your desired resolution without having to litigate right away.
And once you realize that 95% of lawsuits settle anyway, you begin to see why Veeto places a much greater emphasis on the demand phase of the dispute and, when/if necessary, only participates in litigation on a contingency basis--meaning no billable hours, and you do not pay anything unless you win.