Managing Litigation Counsel–Motivational Factors

Never consider litigation a blackbox for the lawyers to handle–always keep a watchful eye on how your litigation counsel is handling court proceedings.

Even if your litigation counsel takes a case on contingency (i.e., counsel gets paid only if and when a settlement comes in), your motivations may not be entirely aligned.

Investors interested in monetizing IP are revenue driven.  The goal is to maximize patent returns, minimize the time to money, and recoup investment costs.

But lawyers have different motivations:

1. Deadline-driven.  Lawyers are usually deadline driven–specifically by court-imposed deadlines.  Deadline-driven attorneys tend to create fewer deadlines for themselves and, where possible, coast in the litigation.  Put another way, rather than pushing the case forward and being proactive, these lawyers have a tendency to do the minimum necessary in the case.  Make sure your attorney is pushing the litigation forward and continually applying pressure on the potential licensee whenever possible (e.g., issuing discovery requests, taking depositions, filing motions when strategically advantageous, thoroughly analyzing claim constructions issues).

2. Hourly v. contingency-fee work.  Lawyers usually take on a mix of contingency and hourly work.  For those that do, these lawyers have a tendency to focus their time on the hourly work, because they realize a return on their time more quickly with hourly work.  Make sure your attorney is giving your contingency-fee case the attention it deserves and needs.

3. Settlements to further your business objectives v. your lawyer’s legal practice.  If your lawyer recommends a settlement amount for a given licensee, make sure the target settlement furthers your own business objectives–not your lawyer’s legal practice.  As an example, your lawyer may recommend that you hold out on a settlement and not accept below a given amount, but accepting a lower settlement amount may help you recoup your investment costs.  If recouping your investment costs early in the litigation furthers your business objectives, take the settlement (but make sure to preserve your royalty rate–I’ll discuss this in another post).  On the other hand, your lawyer may recommend that you take a lower settlement amount, to bring money in the door.  Your lawyer may provide such a recommendation, because he or she may feel pressure from the firm’s partners to generate revenue from the case.  Remember, your lawyer works for you–do not take the settlement unless it furthers your own business objectives.



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