In-House Counsel

General counsel don?t prolong litigation to spread costs over multiple years

By Rees Morrison

?Delaying resolution [of a lawsuit] spreads defense costs into next year?s budget. A case with a defense cost of $75,000 per year for three years actually looks better than a case resolved in one year with a $100,000 defense cost.? I don?t know which law departments John Henry, President of eLawForum , concluded this from, but that quote, published in Met. Corp. Counsel, Vol. 16, Feb. 2008 at 28, astounds me.

Senior management looks at the spending of a law department in a given year, but also over several years, because bulges in spending do not observe the calendar. Any general counsel who tried to game accounting by deliberately delaying payments into another year would soon be caught out. For example, a business unit that absorbs those costs would blow the whistle. More than that, the decision to game the system would be just plain wrong.

Full post as published by Law Department Management on February 20, 2008 (boomark / email).