The dilemma faced by general counsel is the inevitably high cost of necessary litigation. During my time as general counsel of Time Warner, successful fee negotiations with our outside law firms over fees had a welcome but fairly small impact on our total litigation spending. My problem remained the absolute cost of legal services altogether — always high, sometimes enormous. We did not pursue a claim unless we were convinced of the merits of our position and the cost benefit of resorting to litigation. But, even so, we would then face high cash costs, even with discounts or other alternative fee arrangements. We lawyers were never popular for reducing corporate profits and diverting cash from growing the business.
The alternatives, however, were unacceptable — foregoing a significant claim against culpable defendants or hiring one of the contingency fee law firms, many of which were already busy suing us. Although the major firms with whom we had a relationship were often willing to entertain some level of flexibility with discounting and performance-based billing, few were willing to take any significant risk on their balance sheets. For the most part, the same remains true today.
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