In “bet the company” litigation, organizational decisions made in the heat of battle can have a detrimental effect of eventual recovery of defense and settlement expenditures.

KCIC recently developed a case study that illustrates just that scenario. It revolves around national product liability litigation leading to a comprehensive settlement program — outlining the many challenges common in such cases, along with corresponding best practices. For example:

Challenge: Defense costs for activities covered by the excess insurance policy were comingled with those not covered.

Best Practice: Establish separate matter and activity codes early and consistently across all firms. Do so at a senior attorney meeting rather than leave to a junior billing coordinator. Although each firm may use its own billing system, that does not preclude consistency.

Challenge: An alternative billing arrangement with NCC included fixed-fee elements, causing disconnect between timekeeping records and what was potentially covered by the policy.

Best Practice: Adopt a logical approach to dealing with alternative fee arrangements so that billing records can be easily reconciled with what was actually spent.

Challenge: Time entries did not tell a story and lacked detail to determine the nature of the activity. 

Best Practice: Prepare a narrative to accompany each bill, explaining activities and context — something very hard to recreate years later. Since fee auditors tend to use software that pulls out time entries in isolation, each entry should provide a hook to the activity. Contextual narrative descriptions and a timeline are helpful.

Challenge: While there was a single, organized set of settlement documents, the corresponding claim files were interspersed among local counsel and NCC.

Best Practice: Designate a single responsible party to set up and maintain a single claims database to handle all documents in electronic form, in one place, and satisfy the needs of all stakeholders.

Click here for the full case study, including all of the challenges and best practices.