For many, developing the Litigation Budget is one of the most onerous parts of a litigation plan, but being able to submit and monitor a good budget is critical. A strong Litigation Budget that is tied directly to the invoices you receive, allows you to know where you are financially in a project in real-time. It also promotes a “billing mindshare” amongst the legal team that promotes transparency and predictability. And finally, it creates a repeatable model that continues to evolve in detail and accuracy.
What Are the Elements of a Successful Litigation Budget?
When creating the Cost Estimate Budget for a litigation plan, here are the best practices we recommend to clients:
- Use a Standard Format: Use a consistent format across the entire budget so that there is a clear understanding between the legal team. Billing guidelines will help to create the standard format, timekeeper and their rates, and the overall process for billing.
- Identify the Tasks: For any litigation, there is typically an order of tasks that must be performed. Carefully identifying these tasks in great detail will create the litigation template. Often times, some sub-tasks and identified high-level milestones will benefit the plan. Now we can carefully and intelligently estimate the total number of hours for each task that was created and assigned in the project plan. Then using these task codes for billing will synchronize all aspects for real-time reporting.
- Create Buy-in and Accountability: Be sure to have a specific person assigned to each particular task – whether it’s document review or depositions – as you create that budget task item. That gives team members buy-in and accountability. If you have a platform where they can simply submit the information and update it based on certain criteria (for example, they’ve added a custodian and why they believe this addition is important), there is a very clear path for how that is handled inside a litigation plan.
- Communicate: Develop a frequent status meeting schedule that includes budget updates. The ability to eliminate surprises and have a cohesive team able to make strategic decisions together creates a positively informed direction throughout the litigation process that keeps everyone informed and engaged.
- Collaborate: The mechanism to share and collaborate on cost details – for example, a legal spend management system with a collaborative backbone – is a key element of the plan. Having all this data available in a secure cloud-based system allows the entire team to have the information at their fingertips from wherever they may be.
It might seem like a large undertaking, but if you put the time into a good Litigation Budget Plan early on, it will pay large dividends as the litigation plan evolves into a standard model to approach similar litigations you might face.
If you have additional questions about creating a Cost Estimate Budget or would like to discuss how establishing strong litigation spend management plans can pay for itself in strategic and operational savings, call us anytime at 302-798-7500 or watch for our next Litigation Plan Workshop webinar.