My sense is that it’s mostly other lawyers reading this blog – either to get some insight on one of their cases or to check me out when I’m one of their adversaries. But this post is for the non-lawyers out there who find themselves involved in complex business litigation.
We represent closely held businesses and business owners in high-stakes litigation. Many of our clients do not have a general counsel to help align litigation decisions with broader business goals. To fill the gap, we proactively advise clients on the risks, rewards, and costs of each various approaches in litigation.
We have watched hundreds of clients ingest this information, process it and make decisions based on it. Some clients thrive in the uncertainty associated with litigation; others struggle with it. The difference? It often comes down to how they make decisions. Here are three habits of the most effective decision-makers we’ve worked with.
- Figure Out What a “Win” Looks Like, Do It Early and Do It with Both Feet on Planet Earth
The best litigation decision makers take time to articulate what success looks like. This may seem obvious but it is often overlooked. One of our first questions to a client involved in litigation is “what do you want to happen here?” Do you want money? Do you want a problem gone? Do you want to send a message to discourage similar future claims? Think about that goal in the context of your entire business and stay focused on that goal throughout the litigation. Get specific with your goal.
And then get realistic. Talk with counsel at the beginning and throughout the litigation about what is ascertainable and the odds of achieving a given result. In a perfect world, we would always be in a position to tell our clients we have great claims or strong defenses that can be litigated at minimal cost. The real world is less perfect. We often talk about good claims but with concerns about collecting a judgment from a defendant. There are many situations where we have strong defenses that will cost a significant amount to litigate. The reality is that in a large majority of business related litigation, you won’t be “made whole.” You usually have to cover your own legal fees, you can’t get compensation for your and you staff’s time in dealing with us and there is usually some point in the litigation where you will accept or you are willing to pay money to eliminate the ongoing risk of litigation. The best decision makers factor all that into their definition of a “win.”
Once a realistic goal is established, our best decision makers evaluate each decision based on whether it advances or distracts from the goal.
- Think In Terms of Probabilities – Make “Investment” Decisions
Nothing is certain in life, and nothing is certain in litigation. There is no way around it – litigation can be risky. For that reason, the clients who display the best litigation decision making are those who think in terms of probabilities. They understand that no attorney that is being honest with them can tell them what is going to happen with certainly – there is no such thing in business litigation. The best decisionmakers find ways to get comfortable with uncertainty. They think in terms of the odds of success on a particular motion or a particular strategy.
Two clients in recent memory were particularly adept and managing litigation risk. One had a background in data analytics and the other was a bond trader. Every time we came to them with a decision to be made, they employed some version of the same approach. We would work with them to define the possible outcomes, determine the probably of each outcome and the cost of implementing a particular strategy. They viewed each decision like an investment decision – how much does it cost, what’s the potential upside and downside, and what are the odds of each? If the odds of success and the magnitude of the outcome met their criteria, they went ahead; if they did not, we would try a different approach. We never saw them, but I am sure they had elaborate spreadsheets and decision trees.
You do not need spreadsheets or an actuary, but you do need to think in terms of odds, not certainties.
- Listen to Your Lawyer and Then Challenge Their Approach
The best client decision makers we have seen listen to our advice and then push us on it. It may seem counterintuitive, but we welcome clients challenging our advice. When a client is questioning me on a strategy decision it is usually a good thing. I do not even mind clients using the wisdom of ChatGPT to test my analysis or approach.
On one of the first big cases I handled on my own, I was explaining to a client how the statute of limitations might apply to a portion of their claim and that laches might bar another. The issue was germane to settlement discussions. He was upset about the likely bar and the lower demand I was suggesting. We talked about the issue at length and, before long, we were talking about the difference between law and equity courts and their merger. We arrived at the decision to make a higher demand, somewhere between what I was suggesting and what he initially proposed. (If you are reading this unnamed client and now good friend, I am curious if you remember this discussion). This was a more involved discussion than I expected but I left the discussion knowing that the client had a good handle on what was going on, had fully considered the issues and made a fully informed decision.
Ultimately, the client makes the final call on major decisions. The client is entitled to our best advice and zealous advocacy but the client makes the big calls and lives with the results. A client that is pushing us on strategy is one who is taking their vote and the consequences that can stem from it seriously. This is the kind of engaged client you want to be.
- The Calm that Comes with Good Decision Making
Making good decisions leads to better outcomes for business owners involved in complex litigation. No surprise there, and that alone is why you should be using these strategies. But there is another benefit to a good decision making process – the calm that comes with knowing you made a good decision even if the outcome is suboptimal.
In litigation (and in business more generally), you never have complete information or complete certainly. Even well-considered decisions sometimes yield bad outcomes. This can be a difficult pill to swallow financially and emotionally. But our best decision makers consistently achieve more calm than our less-than-best decision makers.
The best decision makers employ the strategies here, make the best decision possible with the information available and move forward. If things don’t turn out as hoped, they don’t second guess the decision nor are they crushed. They are confident that their robust decision making process factored in a potentially bad outcome. They understand that a bad outcome does not mean they made a bad decision.
