VIEWING LITIGATION THROUGH A BUSINESS LENS

Ken Siegel: As a GC, I am the primary interface between outside counsel and my clients–the executives and the board. My clients always view litigation through a business lens: What are the costs/benefits and odds of prevailing in litigation? What business goals will be achieved by a “win” and what harm sustained by a “loss”?

A key part of my job is to translate “litigation” into “business,” and then provide legal counsel and advice to the ultimate decision makers. I always have to keep the business’ big picture in mind. No matter how fascinating the procedural steps are or how novel the legal theories for or against my position may be, my clients just want the business analysis. I need to know that my outside counsel understands this context.

Eulonda Skyles: Can you provide examples of this “business lens”? I’ve found that oftentimes business executives ask: “How much is this costing?” and “Why can’t you make it go away?” Yet, if you probe the surface, those simple questions may reveal deeper business concerns.

KS: The first question is whether the matter presents an existential threat. The vast majority of matters don’t, but something like a patent infringement suit that goes to the heart of a company’s products could. For the cases that don’t pose an existential threat, the “business lens” for viewing litigation includes factors such as: What is the reputational risk associated with the case? How does this litigation impact my company’s position vis-à-vis a specific competitor or within the broader industry? How is the cost of litigation going to impact the bottom line? How much distraction will the matter entail for company personnel whose time is better spent doing their real jobs? What is the risk/reward calculus of the litigation—i.e., the likelihood of prevailing versus the cost of defending or pursuing the suit? What’s the delta between the settlement demand, the exposure, and the cost of defense?

Ideally my outside counsel would be highly sensitive to these business issues and factor them into their thinking as they work with me to develop and execute a litigation strategy.

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