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    Monday
    Jul122010

    « Litigation Management »

    Eighty percent of my disability insurance referrals (I advise disability insurers on the issues presented by attorneys receiving disability benefits) are attorneys “burned out” by litigation.  Litigation management is one of the best careers to move into if you have had it with litigation.

    Origins

    Litigation management departments first appeared many years ago in insurance companies.  Since then, litigation management has expanded far beyond the insurance industry and become a more broadly popular function primarily because litigation is, by far, the largest expense item for virtually every corporate legal office.  The other reason why litigation management has become ubiquitous is because the United States is far and away the most litigious society in the world.  Anything that promises to reduce the costs of litigation is welcomed with open arms.

    What is Litigation Management?

    Litigation managers are primarily responsible for the overall management of lawsuits on behalf of and against the organization, including all of the following and any other related tasks:

    • interviewing and selecting outside counsel
    • actively directing retained outside counsel, including strategizing the litigation
    • assisting outside counsel in trial preparation, including case staffing, witness preparation and other activities
    • managing the course of litigation to minimize legal costs and organizational exposure
    • monitoring, critiquing, and correcting outside counsel performance
    • auditing/assessing outside counsel billing, fees, litigation performance, and guideline compliance
    • reviewing, evaluating, negotiating, and settling non-litigated matters and claims
    • working with insurance carriers on successful resolution of covered claims and lawsuits
    • preparing legal documents related to claims (releases, stipulations, etc.)
    • advising management as to best practices and avoidance of professional liability exposures, and drafting organizational policies to accomplish this
    • reviewing marketing materials and internal documents to avoid legal exposures
    • collecting and analyzing data on the organization's case handling and management
    • developing and maintaining litigation management tools, including software

    Litigation management consultants advise and assist their clients with some or all of these duties, depending on the engagement.

    Who Are the Litigation Managers and Consultants?

    Litigation managers work in the following milieus:

    Corporations

    Traditionally the province of the corporate general counsel's office, litigation management has been separated out in some companies—particularly those that are burdened with a large number of lawsuits (such as pharmaceuticals, construction engineering firms, and manufacturers).  Separate litigation management offices are the standard in the insurance industry.  In some large companies, the function is divided either geographically by regions of the country, or by type of litigation.

    Corporate litigation managers also work for a number of major nonprofit corporations.

    Major CPA Firms with a Litigation Management Consulting Practice

    Litigation management has spawned numerous consulting opportunities for attorneys.  Corporations hire litigation management consultants to advise them on cost control, selection of outside counsel, case strategizing, and other components of effective litigation management.   Even government has, on occasion, engaged litigation management consulting arms of the major CPA firms.

    The “Big Four” CPA firms (Deloitte Touche, PriceWaterhouseCoopers, Ernst & Young and KPMG) were early entrants into the litigation management business and have found it to be a lucrative and steady profit center.  They have offices in every major city.  Their aggressive approach to marketing and client development has prompted their smaller national, regional, and local competitors to also offer litigation management services. Here are the major CPA firms with this type of consulting practice:

    Management Consulting Firms

    Both large and small management consulting firms have also ventured into the litigation management consulting arena.  While many of them are latecomers, they had no choice but to go into this business once CPA firms began offering litigation management consulting services and began hiring attorneys (among others) as consultants.  Following are the major management consulting firms that offer litigation management:

    Legal and Professional Services Consulting Firms

    Professional services and law practice management consulting firms are specialty firms that provide management consulting exclusively for professional services firms, law firms, corporation in-house counsel offices, and/or government legal offices.  They also hire attorneys as litigation management consultants.  Following is a list of some of the more prominent firms in this category:

    Law Firm Subsidiaries

    A number of large law firms have subsidiaries that provide litigation management services:

    Government

    Some government agencies also hire litigation managers:

    Compensation

    Insurance company litigation managers earn approximately $95,000 to $155,000, depending upon the geographic and supervisory scope of the responsibilities of the position, the size of the company, its industry focus, as well as other factors.  Other corporate litigation managers can earn considerably more, primarily because corporations outside the insurance industry generally provide higher compensation to their professionals.  Consulting firm compensation is closer to corporate compensation levels.  Government litigation managers are paid at the same scales that apply to their professional colleagues (see http://www.opm.gov for U.S. Government compensation), which is almost always less than what the private sector pays, with the exception of senior litigation managers who can earn up to $155,500.

    The Future

    There is and likely will be a steady demand for former litigators to serve as litigation managers.  In addition to the litigious propensities of Americans,  the fast-changing legal and business environments of our times lead to countless opportunities for disputation.  Moreover, the barrage of new laws and regulations at the federal and state levels means more litigation and more opportunities for litigation managers.

    Positioning Yourself

    The most attractive candidates are commercial litigators who also know how to evaluate the costs and benefits of litigating vs. settling a case as well as how to bring management principles to bear on legal fee and performance auditing (in other words, some business background or sense, and a facility with numbers).  JD/CPAs and JD/MBAs are very attractive to employers of litigation managers.  The addition of the joint degree may also have a bearing on compensation.  It is also an advantage to have represented corporate clients.

    While additional credentials are usually not necessary for litigation management positions, there are a few certificate programs available:

    A handful of litigation management professional associations are useful for networking purposes as well as for keeping up with what is going on in the field.

    For More Information