Managing Litigation: Strategies and Challenges for In-House Legal Teams

Managing litigation is a common task for some in-house counsel but can be challenging for those focused on transactional work. While some companies have established litigation processes, others may struggle with the disruption it causes. Litigation is inevitable for all companies, making it essential for in-house lawyers to gain experience in this area. Challenges include handling complex legal strategies, managing costs, coordinating with outside counsel, and ensuring regulatory compliance. Effective communication, risk assessment, and reputation management are also crucial aspects of overseeing litigation.

Here are the key aspects in-house lawyers should understand about the litigation process, along with some best practices.

(i)????????? Be in charge.?

Managing major litigation in-house can be challenging unless you work in a highly advanced legal department. While outside counsels are often crucial, in-house counsel must maintain control and leadership over the matter. Delegate routine tasks to outside counsel but stay actively involved. If you disengage, you may face costly surprises and be held accountable by the business if things go wrong. Avoid deferring entirely to outside counsel; instead, take charge and lead the process.

(ii)??????? Keep reading.?

In-house counsel must review, edit, and approve all significant legal documents. Given their deep understanding of the facts and context of the case; whether it's about a contract, technology or services; they are best positioned to ensure accuracy and relevance. Outside counsel may unintentionally misrepresent facts or omit important details, so in-house counsel’s careful review is vital. Effective collaboration means being proactive in providing feedback and challenging outside counsel when necessary. Your input is crucial, and while good outside counsel value your contributions, it is your responsibility to oversee and guide the legal strategy effectively.

(iii)????? Know the decision maker.?

While in-house counsel may lead the legal team, someone else in the company is the ultimate decision-maker (mostly the executive management and/or the board of directors). It's important to know who this person is, as they must approve major decisions and settlements. Their input is valuable for avoiding mistakes and ensuring alignment with the company’s goals. As the case progresses, identify the appropriate authority and involved at the right times.

(iv)????? Clarify what constitutes winning.?

Winning isn’t just about getting to trial; most cases settle before that, and even a trial victory might not meet your goals if the amount awarded is less than sought. Early in the process, in-house counsel, outside counsel, and the executive management executive management and/or the board of directors should agree on what a successful outcome looks like. Everyone should be clear on this definition of success, as it will shape the litigation strategy. Success doesn’t have to be an all-or-nothing outcome; it can be a range of results. Make sure to document this agreed definition of success to avoid misunderstandings later, as litigation can often lead to shifting expectations and blame.

(v)??????? Communications – External & Internal

When managing litigation, it’s essential to hold regular meetings or calls with outside counsel to review progress and plan next steps. Weekly status calls are usually necessary, though they can be cancelled if no updates arise. Assign a primary contact between the legal department and outside counsel to streamline communication, ensuring all critical updates involve this person. Outside counsel should avoid bypassing this contact unless absolutely necessary. Establish clear expectations for in-house document review and set reasonable deadlines. Overall, external communication should be consistent, planned, and effective.?

Equally important is having a solid internal communication plan for updating the business on litigation progress. For major cases, this could involve the executive management or even the board of directors. Keeping executive management informed helps avoid surprises, which are usually problematic in litigation. When updating the business, remember that non-legal staff may need detailed explanations about the litigation process; don’t assume they understand like you do. Always provide honest and balanced information, focusing on what they need to know rather than what they want to hear.

In addition to executive management updates, consider regular briefings for the communications team if media management is necessary. For publicly traded companies, investor relations must be kept informed about significant litigation. Finally, keep the executive management and/or the board of directors updated with fresh information by including them in regular communications with outside counsel.

(vi)?????????? Familiarize the case schedule.?

Keep track of all important dates in the lawsuit. Request a copy or weekly updates on these dates and enter them into your own calendar system. Share this calendar with the legal team and relevant business contacts, including the executive management and/or the board of directors.

Designate one person as the keeper of the litigation calendar to ensure all changes and updates are accurately recorded. Regularly review upcoming deadlines to keep the business informed and avoid surprising executives with last-minute scheduling changes.

(vii)???????? Reassess your position.?

In-house lawyers often start well with an initial case assessment, evaluating the case based on early information and documents. However, many stop updating their analysis until trial, missing out on valuable insights. Instead, create a written case assessment and update it at least monthly or after major developments. This helps you adjust your settlement strategy, budget, and executive briefings based on the latest insights. Staying up to date ensures you’re prepared for questions from executive management and/or board of directors and shows you’re in control, rather than reacting to developments as they happen.

(viii)?????? Be cost conscious.?

Lastly, managing the litigation budget is crucial for in-house counsel. Controlling ongoing litigation costs is a daily responsibility and can significantly impact your career if not handled properly. Here are some key points to consider:

a)?????? Choose the right law firm for your case. Match the firm's size and expertise with the matter at hand. While top-tier firms are excellent for high-stakes litigation, their services and costs may not be necessary for a smaller claim. Properly selecting a firm that fits the case’s scale can greatly improve your ability to manage litigation costs.

b)????? Prepare executive management and/or board of directors for the cost.? Litigation is not cheap.? You will do yourself and the legal department a big favor if you are open and honest with executive management and/or the board of directors about the expected cost at the beginning of the case.? If the cost is going to vary, don’t try to hide it. Bring it forward as soon as you know and have the necessary discussion with them.

c)?????? Ensure you have a fixed budget of the case from outside counsel.? ?