The business plan to manage high-damage liability lawsuits.

The role of the defense team in defending high-damage litigation is not merely to practice law, litigate, or undertake discovery. Although such tasks are a vital part of the defense process, concentration solely on tasks such as pleadings, interrogatories, and depositions detracts from the more important role of the defense team as a case's chief strategist. In this role, the defense team must evaluate all aspects of the case, including, but not limited to, the risk of an adverse verdict and overall exposure to the client.

Litigators use the terms, "strategic planning" or "strategy" synonymously with preparing the case as a lawyer or as part of a short-term scheme to settle a case. In fact, the entire infrastructure of the legal world (lawyers, clients, and the courts) seems to pose substantial barriers to the planned activity that is an integral part of a strategy. The present system is enmeshed with the court system, which creates substantial constraints to planning. Calendar conflicts, uncertainty of court ralings on substantive issues, and multiple parties, all with their own agendas, combine to prevent planned and orderly activity. High-damage litigation appears to present even more barriers to formation of case management strategies. The complexity of high-damage litigation and the risk of exposure to multimillion dollar verdicts yield an almost overwhelming impulse to become task- versus process-oriented.

There are several reasons for changing the approach to high-damage litigation cases. First, even if current ways of preparing and trying cases seem to produce acceptable case outcomes, no one doubts the value of at least examining new tools. Second, multimillion dollar verdicts continue to occur, with increasingly unpredictable upper-end ranges, casting doubt on the efficacy of the present methodology. Third, the pressure to contain defense costs is increasing, requiring new, more efficient ways to defend all cases, yet with acceptable outcomes. Fourth, the pressure to contain defense costs collaterally creates a need to document and to demonstrate effective case management. Finally, clients are increasingly dissatisfied with the problems and constraints of the legal system being cited, per se, as reasons against attempting change. It is for precisely this reason that business plans must be considered.

The Strategic Case Development Plan

Applied to litigation, the concept of strategic planning involves defining the most cost-efficient means by which a defined, acceptable case outcome may be obtained. The business plan states the consensus of the defense team on long-term goals and short-term objectives, describes the path of development of business ideas and associated costs, and identifies the desired result. Applied to litigating high-damage cases, elements of a business plan control case development such that chances of the desired case outcome are maximized.

Inherent in strategic planning is the concept of acquiring an advantage over other parties to the litigation--leverage. Almost always, increasing leverage over other parties or opponents decreases potential loss exposure and costs of defense. A strategic case development plan formalizes leverage strategies and places tasks necessary to case development into a structure such that there is progress toward the desired goal. Strategic plans need not be complex. A strategy is more effective if it can be succinctly stated and its degree of implementation can be measured objectively over time. The details are contained in supporting work schedules or plan subparts.

The process to develop the plan requires formulation of short-term objectives and long-term goals and prediction of milestones against which one can measure progress toward the objectives. A short-term objective is a specific desirable result of one or more case development activities that is intended to occur within a designated time. Milestones are events that culminate in objectives. They signal progress toward the objective. The process for the strategic plan produces a pathway through the case. Once this path has been identified, deviations destructive to progress are more easily detected and avoided. Activity that suggests itself or is recommended to the defense team can be examined in terms of the likelihood that it will advance the case toward the long-term goal.

Creating the Elements of a Business Plan

Setting the Long-term Goal

As the first step in compiling a business plan, the defense team must decide upon the desired case outcome--the long-term goal. Before the defense team can select the long-term goal, it must conduct a basic investigation in the form of brief interviews with key medical personnel; concomitantly, a review of the medical records must be done. When these tasks are completed, the defense team can use the steps below to select the long-term goal. Although there is an interrelation among the steps, each is conceptually distinct and straightforward. * Step 1: Decide whether the case is defensible or meritorious. This triage-type analysis is not as difficult as it may seem. The results of the basic investigation will usually be sufficient to permit a rough determination of liability. At this point, only a rough determination is needed. * Step 2: Estimate the total settlement value in global terms, assuming contribution from all codefendants. This is a general estimate, not the more accurate settlement recommendation that occurs later in the case. * Step 3: Estimate the proportion of the total settlement amount that the client may need to contribute. * Step 4: Predict the year in which settlement is likely to occur. It may be useful to complete Step 5 prior to completing this step. * Step 5: On the basis of knowledge of the jurisdiction in which the case is venued, establish a reasonable expectation of the year in which trial is likely. Because most high-damage cases settle just prior to trial, this provides a predictable rough limit on the time available for case development.

Summary of Case Facts and Material Issues

This section of the business plan contains a one- or two-page "snapshot" summary of the salient facts of the case that are sufficient to support liability, an analysis of damages, and the formation for the strategic plan. It concludes with a list of material issues and summaries of their merit, together with a brief description of damages. This section should also include unusual features of the case, such as alleged record alterations, potential for publicity or notoriety, or other factors that may materially distort verdict potential or case value. The conclusion of this section should set forth the long-term goal.

Venue

The court system in which the case will be adjudicated should be briefly described, including commentary on the court calendar, average time from filing of the lawsuit to trial, characteristics or "track record" of the trial judge (if known), degree of plaintiff or defense orientation, and general demographics of any unusual local court rules. All conditions that present clear benefits or disadvantages for the case should be highlighted. The section should conclude with a statement summarizing the impact of the jurisdictional conditions, such as: "[Name of court] will present no particular advantages and impose no unusual hardships for the defense," or "[Name of court] is distinctly plaintiff-oriented, with a jury pool composed of basically blue collar jurors who traditionally have rendered extremely high verdicts."

Current Case Development

This section includes identification of the developmental stage of the case: basic investigation complete, but not yet in litigation; complaint served, but discovery not under way; preliminary discovery completed; etc. A statement summarizing the scope and breath of recommended discovery, but without itemization of each item needed to complete discovery, should be included. For example, a typical high-damage case might require the following statement: "The number of defendants, multiple medical specialties, and the reported extensive injuries of the plaintiff will require intense and complex discovery over the next two years. This level of discovery will provide the best information upon which we can focus necessary leverage that will support our preliminary goal of settling at less than [target amount]."

A one- or two-sentence description of the time constraints on discovery and defense preparation, such as court-mandated discovery cutoffs and limitations, travel requirements and special needs to prepare evidence for trial or discovery, should be set forth. Also, unusual case constraints, such as an actual or likely preferential trial date, should be highlighted. This supports unusually high cost factors or may emphasize the need for accelerated case development.

Staffing for Case

Members of the defense team and their functional roles are identified here, including a brief statement acknowledging any case-specific instructions or constraints from the client or the claims professional.

Management Tasks: Assignments Here it is clearly stated who will be responsible for overall case management and who will be responsible for completion of identified phases of case development. If any individuals are new to the defense team, the benefits and limitations of their inclusion will be briefly described. Also, prospective vendors other than those for routine, expected services, such as deposition transcription services, medical record photocopy services, and the like, will be identified and described. An example of a vendor whose services and/or product might be costly is one for creating demonstrative evidence, such as computer animation of a medical or surgical procedure. Services of an independent investigator may or may not be considered a major cost item.

Projections of Defense Fees and Costs

This section of the business plan summarizes projections for defense fees and costs, using the following subheadings: * Average cost up to trial for similar cases. * Projected fees and costs up to trial. * Projected settlement value or likely verdict amount. * Ratio of projected case cost up to trial to estimated settlement value or likely verdict amount.

Objectives

This section of the business plan sets forth the primary short-term objectives in the development of the case (including timing), the relationship between anticipated steps in preparing and litigating the case, accumulating leverage, and objectives that may be collaterally related to the particular case. In addition, this section commences the relationship between tasks and cost. From the material in this section, defense counsel will formulate specific work plans for accomplishing discovery or other case development tasks.

The plan should present concise, short-term objectives in tabular format. Examples include distinguishing the impact of various theories of liability on the exposure of the case, limiting damages to temporary injuries only, or identifying plaintiffs who have only limited rights of recovery.

Short-term objectives, to be of value, must create additional leverage. They must either take advantage of a case's strength or be designed to remedy a potential weakness. Leverage also has a time element, in the sense of its representing a window of opportunity. Short-term objectives have similar limitations. Each must directly relate to the long-term goal. The short-term objectives form the path of the plan's critical development. Examples are to establish plaintiffs potential for rehabilitation prior to taking a deposition or to reduce the credibility of plaintiff's expert by demonstrating that his or her opinions are based on personal experience rather than community practices.

Many lawyers prefer commencing their representation as a party's counsel with work tasks rather than spending the time to plan and to set objectives. The work needed to litigate a case is often seen as one task after another, with each task needing completion before one can move on to the next. For example, a review of medical records should precede an interview with a medical witness. However, if case management is seen as simply completing a series of tasks without advanced planning, results often become myopic. This narrow focus may prevent the defense team from perceiving the tactical value of a different order of work activities.

Milestones in Case Development

Failure to meet one or more objectives may be fatal to achieving the long-term goal. However, progress indicators, milestones, are the safety net. They signal progress toward the objective or warn of deviation from the plan. Milestones for a primary short-term objective of reviewing medical records might be obtaining copies of plaintiffs current medical records, retention of a rehabilitation expert, or arranging for the expert's independent examination of the plaintiff. If these milestones do not occur within expected times, it is unlikely that the defense team can achieve the short-term objective within the time needed to move the case toward the long-term goal.

Collateral Objectives

Short-term objectives may also serve needs that indirectly relate to the subject case. An example might be the desire of the defense team to establish a certain reputation that it hopes the plaintiffs' bar will perceive as well-reasoned and adversarial. Therefore, some short-term objectives may create general leverage or may take advantage of leverage previously created on another case. Consistent use of strategic plans will always result in general leverage, as opposing parties recognize that the defense team has become a more formidable opponent.

Flexibility of Short-term Objectives

This section of the business plan should set forth projected needs for contingency planning. Making objectives as flexible as possible will prevent total revamping of the plan because of unforeseen events. The most often-cited example is in the area of expert witnesses. Working from the most to the least desirable, the defense team can create a list of experts. In the event of problems, the solutions exist at the time the problem arises: select a new witness and adjust the long-term goal, if necessary.

Impact of Resources on Short-term Objectives

This section of the plan acknowledges that resources, such as time, personnel, and money, are limited. The nature of time and money is obvious. Some human resources are obvious, but some require thinking through the various problems that can occur during a case. For instance, an objective may require involvement of an often-used expert witness. If the expert's calendar is congested and access to his or her services is limited, the chances of achieving the objective are similarly limited.

Objectives must also be feasible. Available resources must be sufficient not only to allow the work to continue toward the objective, but also to permit modifications of the plan where appropriate.

Summary

Complexity of high-damage litigation, task orientation, and a reluctance to engage in an examination of current case management methodologies often prevent defense counsel from fulfilling its role. One way to structure case management so that strategies are emphasized is to form strategic case plans. Modeled on the format of general business plans, strategic case plans consist of an accurate assessment of a case's potential opportunities and weaknesses. This assessment includes aspects both internal and external to the case, delineation of roles and functions of each member of the defense team, cost and fee projections, short-term objectives, progress milestones, and evaluation of resources. Such orderly activity sounds as if it would be so desirable that very little effort would be needed to undertake it. To the contrary, forming and adhering to a plan will be challenging.

Many clients complain that attorneys tell them that an effective strategy cannot be formed until all basic discovery is more or less complete. If this is true, planning is not possible until close to the end of the life of a case. The implication is that the defense team can only react to developments. Delaying key case management decisions almost totally cedes case control to other parties in the litigation. Failure to establish control over the direction of discovery early in the case allows the plaintiff or other parties to usurp control and direction of case development.