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Understand the Cost of Litigation Before Filing a Lawsuit
Monday, August 12, 2013

I was once told that inexperienced lawyers tend to be scriveners, while experienced lawyers are counselors.  In the context of litigation, this is the difference between filing a lawsuit on behalf of a client on a moment’s notice versus assisting the client to think through the merits of doing so.

A client can have many purposes for filing a lawsuit, perhaps one of the following:

  •  A former employee bound to a non-solicitation agreement is raiding company employees and the client wants the person to discontinue the course of conduct

  • A vendor is delinquent in making payment and the client seeks money owed

  • A market competitor is tortiously interfering with a client’s business expectations and the client wants to “protect their turf” from illegal overtures

The client may even have a combination of reasons for filing a lawsuit.

A lawyer needs to assist the client with thinking through their goals and objectives prior to filing a lawsuit.  If for no other reason, it helps the business client rationally decide if the cost to take the matter to court will be financially acceptable and achieve the desired goals.

This is where the experienced lawyer can advise the client of potential outcomes. For instance, the client may be assuming that if they prevail in the litigation they  would be able to collect attorney’s fees from the other side.  Generally speaking, in the absence of a statute or language in a binding agreement between the parties, the “American Rule” is that each side must incur their own litigation expenses.  A client who asks this question on the eve of trial did not receive thorough counseling prior to the litigation.

Should the client conclude that the cost of litigation simply does not make it worthwhile to file a lawsuit,then it becomes the role of the lawyer to review and recommend alternatives for accomplishing the client’s goals, or at least mitigating the future recurrence of the particular problem at issue.

These pre-filing conversations are something clients should expect from experienced legal counsel.

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