Tuesday, April 17, 2007

Dispute management biggest cost control opportunity companies have, in experience of one in-house counsel

Early dispute resolution saves moneyOne of the biggest--and costliest--mistakes that businesses make is the failure to properly address disputes early in their life cycle. More and more though in-house counsel recognize the virtues of alternative dispute resolution as a cost- and time-saving device for the organizations they advise.

Case in point: in a Law.com interview, Mark LeHocky, general counsel at Dreyer's Grand Ice Cream, advocates the use of early dispute resolution to keep costs down and prevent disputes from, in his words, "metastasizing". As LeHocky explains,

...Litigation costs typically account for the biggest portion of expenditures that companies spend on outside counsel. And the proper management of disputes is in turn the biggest cost control opportunity most companies have before them...

... I actively pursue a package of early dispute resolution tools -- starting with a disciplined internal review process and the use of mediation and other ADR devices regardless of the perceived strengths and weaknesses of the positions of each dispute matter. I have served as a mediator for the federal courts for 10 years -- one of my few pro bono activities now that my kids are grown up enough that I can stop coaching soccer teams. That experience, together with my background in private practice, has transformed my thinking about how disputes arise and, more importantly, how they grow and metastasize unnecessarily.

More often than not, disputes go on longer than they should and become bigger than they need to be due to misunderstandings as to facts as much as legal issues. Sorting those items out as soon as possible is the best for everyone concerned and helps to avoid the unnecessary buildup of litigation fees and other costs. That doesn't mean we don't litigate. We do so when the situation warrants and we use the best and the brightest lawyers. But that happens only after we have pursued the early dispute resolution path in rigorous fashion.

With thanks to Stephanie West Allen who pointed me to the post on the excellent blog Law Department Management linking to the interview.)