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Litigation on the Rise: How to Reduce the Cost of Litigation

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By Gabriella Khorasanee, JD on July 30, 2013 10:13 AM

Recently, AlixPartners published the findings of their Litigation and Corporate Compliance Survey, conducted in December 2012. Relying on the responses of GCs from U.S.-based companies, with annual revenues of $250 million or more, the survey indicates that the risk, and cost, of litigation are on the rise.

Everyone knows litigation is expensive and ends up costing you time, attention and money. The best way to save money is to avoid litigation entirely. Last week, we shared three tips for reducing the risk of litigation. Now, we share three tips for reducing the cost of litigation.

Reducing the Cost of Litigation

1. Do the Work Yourself

The litigation attorneys in your legal department more than likely worked at BigLaw so they know their way around corporate litigation. Before you automatically just hand over the problems to your outside counsel, try to do what you can in-house. You have great resources within your reach at no extra cost -- use them.

2. Alternative Dispute Resolution

Litigation isn't the only solution; and with an estimated 97% of civil cases settling, we know it's not effective. Before you get into the ring to duke it out, explore other options. Arbitration or mediation can get you to the same place as an inevitable settlement, but without waiting years and spending millions.

3. Alternative Fee Arrangements

Recently, alternative fee arrangements are gaining traction among GCs. According to a survey, 61% of GCs used alternative fee arrangement; they may be on to something. The infamous billable hour is not the only way to compensate outside counsel. Everything is negotiable; try for a fixed fee or a success-based fee. Or, you can decide on some other metric besides hours to calculate the fees.

The only winners in litigation are the law firms that represent you. For everyone else, it's just a big headache. If you've tried avoiding litigation, but it seems inevitable, then try these tips to at least off-set the costs.

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