business solutions to justice issues

When I was representing the interests of businesses as a litigator and trial attorney, I had this to say to anyone with an adversarial “legal” problem worth less than $250,000.

Take the $50,000 in legal fees and litigation costs you will pay me and convert it into cash.  Fly or drive to Vegas, Reno or Lake Tahoe (the west coast’s gambling capitals), check into the most luxurious hotel on the strip, have a stiff drink, head to the cashier, convert your $50,000 into chips and place them all on “red.”  Your chances of prevailing in the sense that business people think of winning – i.e., recovering your losses – are roughly the same.  And you might at least have fun losing the $50,000.

Does that sound too cynical?  It’s not meant to be.  I also routinely told potential business litigation clients the following:

Your best protection against lawsuits is not more liability insurance (since your chances of having to fight your insurance carrier for coverage is also fairly high).  Your best protection against lawsuits is dual:  (1)  the quality of your relationships in the business world; and, (2) a great risk management program that includes the general practitioners of the legal profession – (a) first class transactional attorneys to draft your contracts ; and structure your partnership or small corporate entity; and, (b) first class employment attorneys to structure an internal dispute resolution process for your representatives, whether they be employees or independent contractors.

Litigators and trial lawyers are the general surgeons (or cardiac specialists) of the legal world.  Better to get regular check-ups with your general practitioners; eat healthy foods, exercise regularly, and maintain a sunny, pacific disposition than to believe a triple by-pass will save you from careless business practices.

I used to say “the very last person you want to see is a litigator.”  Now that I’ve been mediating full time for five years I’d say “the absolutely, positively last person you want to see is me – a mediator. By the time you and your adversary are ready to sit down to negotiate a resolution to your commercial dispute based upon your own experience, wisdom, education and training, you are generally in the Intensive Care Unit – having expended tens of thousands of dollars trying to advance the dispute resolution ball to the Judge.

To shamelessly mix my metaphors, the Judge is sleeping in the castle.  Your attorney and your adversary’s attorney are spending your money trying to get to the sleeping Judge, but they are, at the same time, building the “forest of briars [that] sprang up around [sleeping beauty's] the castle, shielding it from the outside world [because] no one could try to penetrate it without facing certain death in the thorns.” (from Wikipedia on Sleeping Beauty).

Sleeping Beauty represents unconsciousness.  The thorns that protect and imprison her represent the obstacles (or, as I prefer, the challenges) that stand between us and an enlightened self-interest.  Make no mistake.  Fairy tales are deep and the dangers real.  Our confrontation with our enemy also requires us to grapple with our fear that we will be annihilated if we dare to confront our adversaries face to face with no champion by our side.  It requires us to give up the fantasy that someone else can rescue us from our predicament.  It requires courage.  It requires the recognition that we are both the beauty who sleeps in the castle surrounded by thorns and the prince who would rescue her.  It requires us to be accountable for our own part in causing the dispute at the same time we stand firm in our conviction that the other is not taking his own part in it.  We can demand that our business partners, customers, investors, employees and representatives live up to the expectations they have reasonably caused us to form only so long as we do the same.

That’s the other ADR:  conflict prevention and conflict management.  Business people don’t use the term “conflict” because they are not in the conflict resolution business.  They are in the business of business.  Business people rightly call conflict resolution and management, risk management.

Which brings us to the cloud.  There are times when litigation is necessary.  Those times often occur when technological innovation outstrips our predictive powers and calls upon lawyers and judges to make up new ways to resolve the unanticipated disputes presented by the new technology.  In those cases, you do want to manage some of your risk with the purchase of insurance, which is why I’m providing you with insurance coverage attorney Scott Godes’ article “Insurance for the Cloud.”

Here’s an excerpt, followed by a .pdf of the full article, which I urge anyone doing any business in “the cloud” to read.

[C]loud computing may represent a new trend in information technology, and a move away from established software brands. As such, it may well be a highly lucrative new market. But with such opportunity comes risk. Policyholders should be familiar with their coverage, become familiar with malware precedents, and be aware of how best to counter arguments that insurers commonly make.

Insurance for the Cloud (.pdf) from the Software Development Times.

Scott Godes is an attorney with Dickstein Shapiro LLP, and is the co-head of the firm’s Cyber Security Insurance Coverage Initiative. Scott is also co-chair of the American Bar Association Computer Technology Subcommittee of the Insurance Coverage Committee of the Section of Litigation. Idan Ivri, Scott’s co-author, is an associate with Dickstein Shapiro.

Check out Scott’s excellent blog Corporate Insurance.