If you are a business owner, it is inevitable that your company will bring or defend the “big case.” The big case is the kind of litigious matter that will have a profound effect on the future of your company. It may even be a case where you are betting the continued existence of your company on the outcome of the legal action.

It is instructive to remember that no matter how important the case is to your company, the efficiency of the legal representation will always be an issue. Regardless of the stakes, a business owner cannot allow the victory to be pyrrhic. Big case litigation is big time expensive; there is no way around that. However, there is much you can do to manage the fees so that a win is really a win and not a loss masquerading as one.

Choosing the lawyer

The lawyer you hire is the driving force behind both the success and the cost of the success. Once you have identified the likely candidates to handle your big case, use the following suggestions to find the right lawyer at the right cost.

First, you should ask yourself is whether you need an attorney with special expertise. Usually, you do not, but if the area of law is particularly arcane, such as patent, tax or bankruptcy law, then make sure your list of candidates is qualified to handle these specialized areas.

Next question: do you need a trial lawyer or a litigator? Since the possible terminus of any case is a trial, most people assume that all litigators try cases. In fact, the opposite is true. Most lawyers who are litigators are not trial lawyers. A trial lawyer is a litigator who routinely goes to trial.

Because the stakes are so high and the opportunities to try business cases so rare, trial lawyers are equally rare. Litigators and trial lawyers do the same thing, but they do it very differently. A litigator builds a case from the ground up, never exactly sure what the final structure (trial) will look like. A trial lawyer designs the structure (trial) first, and then builds their case. In a sense, the trial lawyer looks at a case from the end game, while the litigator thinks of the case as linear, with a clear beginning and end.

In the short run, a litigator is probably less expensive than a trial lawyer, and if you think it is probable your case will settle early, a litigator is the right choice. On the other hand, if the case has a chance to be tried, for your own security you should invest in a trial lawyer. One other note of caution: if your case is headed for Federal Court, make sure the trial lawyer or litigator has significant Federal bar experience.

The top law firms are substantially similar, but not all lawyers are equal. Therefore, be careful to hire the lawyer, not the firm. If the lawyer works for your favorite law firm all the better, but if he or she does not, you must go with your instincts on the individual lawyer that will succeed best.

It is always good business to pay the least for the most, but it’s difficult to apply this to legal services. As insurance companies found in the 1990’s, a low hourly billing rate is indicative of absolutely nothing. Hourly rates are not irrelevant, but nearly so. What is more important is the proficiency and efficiency of the lawyer and his or her honesty when recording billable time. Moreover, the law is like any other service you get what you pay for. Finally, be aware that billing rates vary by region. New York rates are significantly higher than Los Angeles billing rates, which are significantly higher than Cincinnati rates.

Most successful law firms operate on two ironclad principles: collect as close to 100 percent of recorded time as possible, and collect it quickly. If you want a firm to lower its billing rates for you, you have to offer the law firm something. Most law firms expect to collect at least 90 percent of all billed fees and to do so at no less than an average of 45 days. Offer a quick pay for a reduced fee, but keep your bargain.

Negotiate even the most mundane of costs. You should pay only pass-through costs for outside services and a negotiated fee for all copying, facsimile use and the like. Another suggestion is to insist upon transmission of documents via attachments to e-mail as opposed to fax copies. Many law firms charge one to five dollars a page for facsimile transmission. If you have secure computers, insist upon documents being transmitted by e-mail. You will be surprised at the savings.

The litigation plan

At the first sign of the big case, get your proverbial ducks in a row. This one piece of advice will save you hundreds of legal hours.

Accumulate the documents now. The most important reason to obtain your documents now is to understand your weaknesses early. An incidental benefit is that early accumulation of documents is far less expensive than doing it later, after memories fade, employees leave, databases are altered or destroyed, and files mangled. Accumulating the documents at the earliest possible opportunity will save you time, expense and the possibility of embarrassment with severe legal ramifications.

It is strongly suggested that you funnel communication through one or two individuals inside and outside your organization. Too many cooks don’t ruin the broth, but it makes it damn expensive.

Consider having your outside counsel take statements from your employees right away. This suggestion, on the surface, seems to suggest spending money and not saving it. However, a big case is likely to go on for quite some time, and during that time, key witnesses from your side may be terminated or may leave for greener pastures.

When the statement is taken early, recollections are better and loyalty probably at the strongest.

Litigation can be expensive, diverting vital corporate resources and attention, and can be a constant annoyance and distraction to your business, but perhaps with these suggestions, you will be able to at least minimize the associated costs as well as the inherent irritation.

Frederick “Rick” Kranz is a trial lawyer with the Los Angeles office of Katten Muchin Zavis. He can be reached at [email protected]

Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.