Maintain Quality and Contain Costs with Decision-Tree Budgeting
Law department management expert Rees Morrison extolls the virtues of decision-tree budgeting in a recent post. Mr. Morrison is a recognized authority on in-house counsel cost control techniques, and his endorsement of this very effective cost containment tool speaks volumes. (Mr. Morrison also has an earlier post on the software available for creating these decision tree budgets.)
Virtually all corporate clients now require some kind of litigation budget for hourly work. As I have discussed in previous postings, it is a challenge to craft a budget that takes into account all the vagaries of high stakes litigation. The decision-tree method is an excellent tool for addressing these challenges. Decision-tree budgeting provides the client with a road map of the range of litigation costs she is facing. The tree breaks the case down into segments and allows the client to see what it will cost to get to various stages in the litigation. The client can then strategize in advance how to respond to significant events, such as denial of a motion for summary judgment. The client thus gets predictability and control over her litigation costs, which is the goal of any cost-conscious litigation management professional.
Decision trees also help the litigation attorney solidify his overall strategy in the case. When an attorney sits down and crafts a decision tree budget, the case plan takes shape. Future "if-then" decisions become readily apparent, and everyone on the case team knows where they are going. The entire case is now reduced to writing, allowing informed decision-making with regard to tactics and expenses. Also, budget amendments can be limited to specific sections of the "tree," so both client and outside counsel have a clear understanding of what was changed and how much it changed.
Decision tree budgeting, then, accomplishes both goals of an effective litigation cost control program: it preserves the quality of the legal representation while allowing the client to predict and contain the costs of the litigation. And that's why people like Rees Morrison rave about it.
