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May 13, 2022

by Bill Nolan, Esq., Barnes & Thornburg LLP

“Should I fight, or cave a little and focus on making widgets?” Here are six questions I ask clients about that question in any dispute.

  1. How strong is our position?

Dispassionately evaluate your position now – not months and a chunk of fees later. Too often, companies emotionally dive in without taking a hard look at likelihood of success. Lawyers need to have the intestinal fortitude to tell clients what they don’t want to hear about this.

  1. What’s everything that’s at stake?

Often, there is an obvious target – the number in a contract, invoice or complaint. Are there also fees provisions in the fine print of that boilerplate contract? Statutory fees or penalties?

  1. Might settlement create costly precedent?

Settlement might affect future disputes. For example, an employer might choose not to settle a small dispute because there are more employees with the same issue. If the employer gives in to one, others may not be far behind.

But can’t everybody agree not to share the details of the settlement? That might work, but experience tells us interested bystanders seem to find out somehow, and it is hard to prove a violation of a confidentiality provision.

  1. Is there a principle at stake, and what’s it worth?

There is nothing wrong with emotions; just make sure to identify and distinguish them from cold, hard analysis. Sometimes clients say, “I’d rather pay you than pay them.” That’s valid if it is fully informed. If a business is making a decision based on what is right, try to quantify “right.” There will be no formula, but trying to “price” principle is a useful exercise.

  1. What might it cost to fight?

It is common to initially underestimate fees. Sometimes increased fees result from unanticipated twists and turns. But, it is human nature to be unduly optimistic at the outset, not only about the outcome but also about cost. Again, the lawyer can’t be afraid to give it to the client straight. (Here would be a good place to consider the time and energy that will be required.)

  1. How would the other side answer these questions?

While we critically evaluate our position, it is important to ponder your adversary’s position. You cannot know with certainty how they would answer these questions, but think through them from their perspective too.