by Andrew Flake
Invited to an extended family reunion, I visited one of our state parks a few weekends ago. It was a cool and beautiful morning, and for a moment, standing under a bright blue fall sky, taking in the brilliant reds, yellows and oranges of the fall leaves, I resolved to return more often, and wondered why I had not done so already. A similar feeling hit me during a dinner discussion this week. Along with an engaging group of other ADR neutrals, we heard from some colleagues who have been serving for many years as outside settlement counsel. For the right case, which it seems to me is generally going to be larger dollar, higher risk corporate litigation, settlement counsel — who is different than, though complementary to, a mediator — can add tremendous value.
Let’s pause there for a moment. If you’re wondering what settlement counsel does, you’re not alone. While there was consensus in our dinner group about the value of that role, it was also recognized that even among many litigators the term “settlement counsel” is still not widely understood or appreciated. That is unfortunately, because it means that settlement counsel remains very much underutilized in cases they could benefit.
So who exactly is “settlement counsel”? She is a lawyer, retained by the client to coordinate with trial counsel, whose mission is to focus solely on obtaining the best result in a negotiated settlement. Often, and to greatest effect, settlement counsel is retained early. She is not a mediator, though the skill set has substantial overlap.
The ACC has a good case study here, noting that “settlement counsel often work on resolving disputes even as trial counsel pursue their litigation strategies.”
The concept has been understood for some time; I remember reading an article about using settlement counsel as a young lawyer some twenty years ago. The late Professor Roger Fisher, who wrote “Getting to Yes,” referenced a “two-track” approach to litigation in a 1983 article discussing litigation approaches. And any number of good law review articles over the past twenty-plus years have reviewed the advantages to the business client.
Yet, even as litigators have increasingly specialized, and new roles (e.g., litigation funders) have emerged, the use of settlement counsel has been slow to catch on. Why is that? Generally, I think there are some viewpoints — some received wisdom or truisms — that when we examine them, are really not that wise are true. I’ll review a few here, in the form of questions that often arise.
Isn’t settlement counsel just adding expense? Not if roles are appropriately delineated. Trial counsel often prefer to focus on preparing and winning, and settlement can become an afterthought, whereas settlement counsel if focused only on settlement. In addition, if the same advantageous settlement can be struck earlier, before an additional x-tens of thousands of dollars in litigation expense, doesn’t that favorably increase case value? Lastly, and of special interest to general counsel and the company CFO, the compensation model for settlement counsel is most often a contingency or success-based fee, aligning interests even more closely.
I thought settlement was the province of in-house counsel. Is a settlement counsel supplanting that work? Here again, role definition is important — the in-house counsel is the client representative, working with settlement counsel directly, both of whom are working with trial counsel. It is in-house counsel who is managing the entire case. She will be getting better results and better analysis from a team member solely assessing settlement. In the corporate context, too, where the typical in-house litigation counsel has tremendously limited bandwidth, having settlement counsel on board is freeing up valuable time.
Isn’t trial counsel supposed to be managing settlement? This one is easy to address, as trial counsel will quickly acknowledge where their strengths and preferences lie — in working up their own case and advocating before the court or tribunal for positional success, with the ultimate goal of prevailing at trial. It is a different mindset and mentality, and while it is possible to switch them, like changing hats, many trial counsel prefer to keep laser-focused on their principal charge, which is success at trial.
Can’t we just conduct a mediation? As a commercial mediator who employs a range of ADR tools and modalities, I would say this: the mediation process and the work of settlement counsel are and should be complementary. When a mediation is conducted the right way, the work of the mediator, and the processes she uses, look similar to those of settlement counsel. Also, good settlement counsel and good mediators are process-oriented, not even-focused. This point is a really important one: To be really effective, mediation should be viewed as a process, not a single event. It starts with the first communication with counsel; it continues through an exchange of information and perspectives, aiding the parties in their own case evaluation; and progresses with the active listening and guided negotiation necessary to reach agreement.
Settlement counsel will deploy many of the same tools as well: early assessment; systematically looking at future costs and expenses; considering the key “unknowns” and what information needs to be exchanged to address them; and developing a resolution plan that accounts for case-specific intangibles and party interests. Sometimes, their work can resolve a case before a mediator is involved, and sometimes, that work prepares the ground for a more fruitful mediation.
What do you think? Have you used settlement counsel, and if not, would you consider doing so in the right case? What kind of case would that be for you? Email your thoughts to me at email@example.com. I’d like to review some of your input and experiences in future posts.