Why you need a Litigation Response Plan
Legal problems can bring a company to its knees. Consider, for example, the costs. You can lose millions, even billions of dollars, if you lose the case, and that’s just the amount awarded to the winning party. However, that’s just the tip of the iceberg.
For example, how much is your reputation worth? As the case drags on, media can pounce on the problem and make you tomorrow’s headlines. Your stocks will plummet. Your investors will pull out. Your consumers may even lose their confidence, shift to a competitor, and hit your sales. Your PR and Advertising campaigns may even lose their momentum, as the public looks at them with increased skepticism. As your reputation takes a hit, so does your revenue.
The effects on company morale, the strain on your resources, the opportunities lost as you spend more time saving your business than building it—those also represent the “losses” your company must shoulder in the event that you are unprepared for a legal disaster.
The Importance of a Litigation Response Plan
You need a litigation response plan, well oiled machinery that not only protects your company from any legal problems but can quickly act in the event of a lawsuit.
The litigation response plan is more than a short document with the numbers of your legal department. It is a strategy that evaluates the legal risks intrinsic in the nature of your company or industry, and then handles the data and services required to protect you from them. It is crucial to stress the importance of data. The law is built on facts, and facts must be preserved: documents, forms, waivers, and all the paperwork that can act as a shield between you and disaster.
Data Request and Preservation
It’s important not only to be able to gather evidence, but to preserve it and make it easily accessible. You will need data extraction technology, organized system files, and a reliable way of storing and retrieving that information. Clearly, this involves more than having several folders stuffed into cardboard boxes.
Once that information is gathered and organized, the next step is to keep it secure—and in a way that allows it to be admissible by court standards as “evidence”. Again, this requires special professional and technological considerations. You may need to call in forensics teams who can help verify the information’s security, authenticity and chain of custody.
Data Storage and Retrieval
For a legal response plan to work, the team needs to be able to access information quickly. Time is of the essence, and this means being able to record data and retrieve it as quickly and efficiently as possible.
One aspect of creating easily accessible information is to remove duplicates. The company must find a way of streamlining the data to only the most essential, and ensure that there is no unnecessary overlapping of files. Again, electronic systems are highly advised.
Because many companies have limited storage space, it may also be necessary to find a way to compress that data or translate it into digital form. Another important task is to index it for search accuracy. Having it programmed into the computer is ideal; it allows information to be organized according to the companies’ needs, cross-indexed for faster analysis and comparison; and allows easy file transmission.
Of course, any digital system requires high levels of security. Data encryption, passwords, and firewalls are all necessary to ensure that these files are not going to go to the wrong hands, particularly since it can contain sensitive and highly confidential information.
Digital files should also be protected from any computer problems; the repercussions of losing those files from a technical problem are tremendous. Back up systems have to put into place. However, digital files are in themselves more secure than documents, which can be lifted and photocopied with very little evidence of theft. They are also safe against fires and other physical means of destruction.
Network of Experts
Documents are not the only source of data; sometimes it is necessary to call in expert witnesses who can provide their own professional inputs or add credibility to existing findings. Part of the information system must be devoted to creating a database of those experts and cross-indexing them for easy referral.
How a Litigation Response Team can Help
Most companies will have an in house legal department to handle legal matters. However, it is necessary to provide the necessary support system to allow them to work efficiently. While they, as professional attorneys, are in the best position to handle the strategy of a case, they need the infrastructure to gather the facts and access the materials to implement it effectively.
A litigation response team can work with the company’s management, legal department and IT system to create that appropriate infrastructure. This includes evaluating the company’s particular needs, the efficiency of the existing system, and then “closing the gaps” by designing the software for data gathering, data preservation, data organization, and data access. All of this will, of course, be aligned with the company’s legal strategy.
The litigation response team will usually provide a detailed report with their findings and recommendations on how to implement the plan. This will be reviewed by the company according to costs, and assessed by the management and the finance department. However, it is important to weigh the investment required by creating a litigation response team versus the costs of the disaster it averts. It is always better to be proactive, especially if the company faces many legal risks.
In short, a litigation response plan allows you to evaluate whether or not you have the appropriate measures to face a legal situation, particularly in your ability to gather the necessary evidence and preserve it in digital form. It is an assessment of how safe and ready your company is for any problems.
Due to this fact, a litigation response plan is not just a “legal concern”, a problem left to the company’s lawyers. It is a business concern. It is looking at how your company is at risk. Can you really afford not to?