“To get that full cup of justice for the client, to create full accountability and deliver the result to the client so that it really does fulfill what it ought to fulfill and it is this so-called megacase, that requires a lot of experience and skill.”
By Raychel Lean | January 11, 2022
It doesn’t take a large firm to handle large cases. In fact, small and medium-sized firms are increasingly taking “megamatters”—or matters generating more than $1 million in legal spend—from Big Law, as Dan Roe has reported for the Daily Business Review.
Before taking on a megamatter, here’s what law firm leaders should consider.
Are You Comfortable With Risk?
There’s no way around it: Litigation at the highest level requires an appetite for risk.
The Haggard Law Firm’s managing partner, Michael Haggard, is no stranger to megamatters, having secured a landmark $104 million verdict for the family of a 14-year-old boy who suffered a catastrophic brain injury when he was trapped underwater by the suction of an unsafe pool pump. That case led to others, sparking a law change.
Haggard’s boutique personal injury firm took a risk on that initial litigation against the pool pump industry, knowing losing it would mean losing about $250,000 in costs and $1 million worth of billable hours—if the firm followed that model.
But because smaller firms are, by nature, entrepreneurial, Haggard said they’re uniquely positioned to specialize and take the necessary risks.
“You’re ready to take on that risk and you’re so singularly focused on it because you’re not doing family [law] at the same time, you’re not doing immigration law at the same time. Everybody’s focus is on this megamatter,” Haggard said. “I think that’s why, over time, if you look at some of those cases that have resulted in these incredible awards and do change society, it usually is small to midsize firms, I would say.”
The key thing, in Haggard’s experience, is to be willing and able to lose because “you can’t just settle a case if it’s in your interest,” he said. That means considering, “Can you withstand not getting revenue on a certain case you’re putting all this time and effort into for three to four years?”
“If they can do that and they’re willing to take that risk and, ethically, they can always put the client’s needs first, then I think the way to do that is to take on riskier cases, take on cases with bigger damages, bigger legal challenges, always knowing there’s a huge risk and you’re willing to lose,” Haggard said.
Do Your Research
There are ways to manage that risk, including thorough vetting of a case in terms of liability and damages.
That’s according to Peter Prieto, who’s head of commercial and class action litigation at Miami’s Podhurst Orseck, which regularly litigates against corporate giants, including Volkswagen, Bank of America and Boeing. For class actions, that also means looking at whether the class can get certified.
Stuart Ratzan of Ratzan, Weissman & Boldt, which has secured more than $200 million in jury verdicts over the past seven years, said he’s found focus group testing invaluable.
“That is the greatest way to assess what risk we should take and what we shouldn’t,” Ratzan said.
Then, once you’ve done your homework, stick to your guns.
“Don’t fold your tent. Stand your ground,” Ratzan said. “If you’ve researched it and you understand that the case has tremendous value and they’re trying to settle it off cheap, even if cheap is a large number, if it’s not right for the case it’s not right for you or your client, then do your job.”
Find the Jugular
The next step, according to Podhurst Orseck partner Steven Marks, is deciphering, “How do you get to the finish line in the most efficient, effective way? Where is the jugular?”
“Very often, at least in my practice, it’s putting the insured and the insurer at odds with one another—where, if you can somehow create a situation where the insured is actually motivated and has an interest in making sure that the insurer resolves this for them because of business distraction, excess exposure or any other reason that the insured may have,” Marks said. “You have to figure out what that reason is; how are you going to turn the table on the insurer?”
Build Strong Infrastructure
Prieto and Marks said Podhurst’s infrastructure played a major role in its success, pointing to its experienced legal team, contract lawyers and staff members. Flexible fee arrangements and hybrid models are also key, according to Prieto, who said they comprise 80% to 90% of the firm’s cases.
“A lot of firms don’t have that, so gaining experience in alternative fee arrangements, including contingency work, is very important in handling these large matters,” he said.
Going toe to toe with huge firms also means leveraging project management techniques and technology to maximize productivity, according to Luis Salazar of Salazar Law in Miami, whose clients include TD Ameritrade and Wells Fargo.
“We use our own agile project management method, called Lawgile, which we use to efficiently and effectively marshal our resources,” Salazar said. “On strategy, boutique firms like ours are filled with people that live and die for clients, not for billable hours and originations. We must make a personal connection to clients to fully understand their unique challenges and bring our best thinking to bear.”
Team Up
Lawyers should be honest about what they can and can’t handle, prioritizing the client’s best interests, according to Haggard, who suggested partnering with an experienced firm.
“You develop long-lasting relationships that way,” Haggard said. “Sometimes I hate when lawyers think, ‘Well, that would reduce my fee.’ It’s like, ‘No, you’ll do better and you’ll be able to work on other things.’ That works itself out.”
Can You Manage People?
One of the most time-consuming issues, especially in multidistrict and class-action litigation, is managing people and ensuring clients receive individual representation.
“You not only have a co-lead counsel that you have to deal with, but you also have a steering committee,” Prieto said. “That can be very time consuming, and it takes a lot of time handling the personalities and managing people to ensure that everybody’s moving in the same direction.”
Be Patient
No firm can become “mega” without first mastering the basics and “doing an A-plus job,” Ratzan said.
“I was once at a seminar and the guy said, ‘Anyone can say I settled this multimillion-dollar case, but what if the case was worth $50 million and they settled it for $5 million?’” Ratzan said. “To get that full cup of justice for the client, to create full accountability and deliver the result to the client so that it really does fulfill what it ought to fulfill and it is this so-called megacase, that requires a lot of experience and skill. So there’s no quick, short sprint to this. It’s a marathon.”
Copyright 2022. ALM Media Properties, LLC. All rights reserved.
