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Take Charge: Use Early Mediation to Control Your Legal Fees

June 15, 2012

Just read a good article on how in-house counsel can prepare and conduct a productive mediation – 4 Steps to Prepare for a Productive Mediation.  While this article addresses the role inside counsel should take with outside counsel, I believe it also can be very useful for any client, not just in-house counsel.  While all four steps are valid, it is Step 4 that can and should be implemented EARLY in any dispute because a client and their attorney often have very different motivations at this stage of the dispute/litigation.

“4.  In-house counsel might have a cost-saving incentive to suggest early mediation. Outside lawyers often will propose that mediation be put off until a certain amount of discovery has been conducted so that the client makes an informed attempt at settlement. In-house counsel, however, may wish to save the attorney’s fees that are incurred during discovery and allocate at least a portion of these fees to the settlement. This assessment is critical to evaluating the true cost of a settlement, and in-house counsel must make it.”

The client’s main motivation should be the overall cost of the dispute, including attorney’s fees. As discussed above, the attorney, or firm, will usually argue for the need for discovery to make an informed decision on any potential settlement.  Unfortunately, discovery is usually expensive (see here) and profitable to the attorney.

I would advise a client to aggressively pursue mediation at the earliest possible point in the dispute.  If it is discovered at the mediation that more information is needed, limited discovery can be agreed to between the parties.  If the parties begin this type of dialog and collaboration, the odds of eventual settlement will certainly become greater.  For a client, there is little risk and/or cost to early mediation.  This may not be the case for your attorney who misses out on the discovery gravy train.

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