Settlement Counsel: An Alternative, But Complimentary Approach to Litigation

A teaching moment: following the initial case management conference in a trademark dispute, I walked up to opposing counsel and introduced myself. His client had sued my client for trademark infringement and, while I believed in my client’s position, I wanted to explore whether there was a non-litigious resolution to the dispute. He immediately made clear that the only resolution that he and his client would consider was total capitulation. I tried to move past this bravado and have an earnest conversation, only to be rebuffed.

Thus, the parties litigated over the course of the next year and my client prevailed. Not only did we defeat plaintiff’s claims of trademark infringement, but we succeeded in cancelling plaintiff's mark as generic.  

I raise this not to brag—trust me, I’ve also advocated for clients who were unwilling to entertain settlement—but as an example of how overconfidence in one’s position and reliance on litigation can backfire. And even where a party does prevail as expected, the economic, emotional, reputational, and other costs, can lead to a pyrrhic victory.

In response to these realities, more companies are turning to settlement counsel as either the first line of attack or defense, or to complement their litigation strategy. Settlement counsel is a lawyer whose sole purpose and role is to facilitate an out-of-court resolution of a dispute. There are many benefits to settlement counsel:

·         It places the negotiation function in the hands of an attorney who is skilled in conciliation and negotiation. A litigator does not always have the temperament or employ the proper process to foster a settlement. Using settlement counsel allows a litigator to be a litigator and settlement counsel to use the tools that they know best. In this way both can work together to achieve the best possible result for the client.

·         It enhances the chances of settling prior to or in the early stages of litigation. Too often, a litigator comes into a dispute focused on how to prevail. Settlement counsel, however, approaches the dispute differently—can it be amicably resolved on acceptable terms. This shift in focus can make all the difference in effectively settling a case early. And even where early outreach fails, it still provides clarity: the case needs to be litigated.

·         It breaks through the dilemma of who goes first. Often, even though a settlement or business resolution is in the best interests of both sides, neither side wants to initiate the conversation for fear of looking weak. Using settlement counsel, however, need not be viewed as being weak but, rather, as an ordinary business practice for all disputes.

·         It allows for the maintenance of an open dialogue. Because opposing counsel knows that cultivating settlement options is the job of the person with whom they are talking, they can have a more open dialogue without the worry of ulterior motives or being dragged into a discussion about a discovery dispute or the litigation itself.

·         It frees up litigation counsel to act solely in an advocacy role. Freed from settlement considerations and discussions, litigation counsel can focus solely on formulating legal arguments, marshalling evidence, and advocating for their client. This undivided attention benefits the client. The advantage becomes more pronounced during those phases when settlement prospects are at their highest, e.g., after discovery but before dispositive motions have been resolved, and in the lead up to trial, where litigation counsel can aggressively and proficiently pursue the case, while others focus on potential settlement.

Employing settlement counsel, thus, offers a different perspective on a dispute, a perspective that could ultimately lead to a favorable resolution when the time is ripe.