Managing Litigation Costs with Risk-Based Budgets — Connecting Price to Value
Lane Powell Shareholder Milo Petranovich authored an article in the November/December issue of Oregon Business magazine titled “Managing Litigation Costs with Risk-Based Budgets — Connecting Price to Value.” In the article, Petranovich discussed how many businesses have increased their efforts to innovate and provide products and services more efficiently since the Great Recession. The need for innovation and efficiency has recently expanded to virtually every business and service provider. Although the total cost of legal services has remained essentially unchanged in the last five years, lawyers have also discovered the need to find ways to innovate and deliver more value to their clients by practicing more efficiently. Petranovich discussed the current pricing systems and fee arrangements for legal representation, as well as possible solutions that would encourage innovation and efficiency.
One solution is to break complex business litigation into pieces — then budget and manage each piece according to the risk to the case outcome inherent in that piece. The goal is to build a litigation plan, and a budget for that plan, that reflect the lawyer’s judgment of risk and the client’s available resources and risk tolerance.