How To: Use a Trial to Your Advantage

To business executives, lawsuits are rarely good news. Taking a case to trial is expensive, distracting, and risky, which is why an overwhelming percentage of cases settle. Managing the legal risks of a business effectively, however, requires not only being prepared to take cases to court, but being able to identify when a trial is the best option. Ralph Shalom, associate general counsel and chief litigation officer for First Data Corporation, delineates the many factors his team considers when deciding which cases to take to court.

Review the Facts
Every case presents its own risks and opportunities. We try to figure out, as early in the case as possible, what is really at issue, what we will be able to prove, as well as what weaknesses may give the other side opportunities.

While full discovery can play out over an extended period of time, we try to get a good sense as early as we can of the competing positions and risks, so we can map out roughly how we plan to respond. This is often done even before we have retained counsel since the results may guide us in what counsel to hire.

Our objective at this stage is to understand the impact of the issues on the overall business—and that’s not only in terms of case value, but also to understand if there are any business changes that we should implement or any that we should recommend to minimize similar risks.

Assemble the Team
Defending a lawsuit of any complexity is a team exercise involving outside counsel, the internal legal department, and the business clients. We manage a lot of our discovery internally, so we can develop a greater expertise on company processes than we would ever find in a law firm or an outside vendor. We will use discovery counsel for the same reason, to develop the expertise on internal company processes. I am lucky to have a great discovery team.

All of this requires a lot of coordination. Everyone involved needs to understand the larger context for the issues in the case, what we’re trying to achieve, what needs to be done, and who is going to do it. The team metaphor is an apt one: each player may have assignments, but everyone needs to know the game plan and have confidence in each other.

Assess the Case
Once we have a sense of what the problem is and the risks it poses to the company, we can present our analysis to our leaders. We talk about our teams and who all needs to be involved, and we share our sense of what we want to do with the case. Some cases present a problem in our operations that we can solve. Others are challenges to the way the industry operates, and that demands a stronger defense. If we know that a settlement is the best option, we’d rather accomplish it sooner than let a case drag on. A settlement can resolve a claim in a matter of days; a court fight can take years.

Some claims don’t lend themselves to settlement and may need to be fought through. We try to identify those going in, so we can prepare for that eventuality.

There are definitely risks, but there can also be hidden benefits to trying a case. You have to look at each case not only as an individual claim, but more broadly. Sometimes a case is worth trying. Even if the cost of trying a case is higher than the issue presented, there are instances in which we have to fight to prove a certain point or principle. When we know we did the right thing, we look to defend it.

Learn from Experience
We try to avoid lawsuits, generally, but the issue a lawsuit brings to your attention can be an opportunity. It tells us how we can do better. It’s not just about defending ourselves against this case; it’s about avoiding future claims and improving how our business operates. Throughout the entire process, we give feedback to company leaders, and many things about our operations become apparent. There are always lessons learned, win or lose. I think our most significant contribution as lawyers is usually less about defending a particular case and more about providing the guidance to avoid future claims and improving business operations. We help the company in its overall process to get better at what it does, and we can use these challenges as opportunities to get better.