Alex MacDonald, Chief Strategy Officer at McCarter& English, joins a panel at PLI to discuss why and how to value litigation. Litigation is expensive, time consuming and disruptive to business operations, which is why it has traditionally been seen by corporations and their lawyers as a liability. Increasingly, however, savvy in-house counsel are realizing that it can also be an asset. Especially as the market tightens, more companies have begun to think creatively about litigation’s potential upside. To successfully pursue, or defend against, a claim, it is crucial to understand how to value the litigation in which you’re investing. At the most basic level, you need to know whether to accept or reject a settlement offer. But even before you get there, the client’s expected outcome should be aligned with the expected fees, costs, and time they invest. Similarly, a plaintiff litigator’s contingent or success fee should be worth their investment of time and any foregone hourly fees—even a purely hourly arrangement, on the plaintiff or defense side, should be aligned with the case’s expected value. And a litigation funder making direct payments to support the litigation needs to believe that the returns will support the investment.
Clients, lawyers, and funders, therefore, all have to value litigations. But how? The uncertainties of litigation have often left that conversation simple and surface level. This Briefing will explore how that process can occur in a more robust way, the opportunities that get opened up when litigation is valued properly, and how to structure a litigation to take advantage of and unlock that value.