Video: The Top 8 Ways to Know When It’s GO TIME – #1: Enough at Stake

Mar 03, 2016
Shai Harary

I make my living as a litigator, and so you’d imagine that it would behoove me to push my clients toward long, expensive law suits – right?

WRONG.

In fact, I spend a lot of time and energy trying to proactively facilitate efficient and swift conflict resolution. Because in the end, my job is to make sure that my clients’ best interests are served. And let’s be honest — litigation can be costly and protracted AND yield unpredictable results, so it should be pursued cautiously and thoughtfully.

That said, there come those times when you have no choice… when you’ve got to go to court.

But how do you know when it’s GO TIME?

I’ve already shared my top 8 ways to know when you must litigate. And now I’m excited to go into depth about each reason, starting with what I consider the #1 way to know when it’s go time:

When there’s enough money at stake.

In civil cases (which are about money – as opposed to criminal case which are about liberty), there is one very specific way to know when to pursue litigation: when it makes economic sense to do so.

Sometimes this is an easy assessment, like when there are big bucks (hundreds of thousands or millions or more) on the line.

Then it’s easy to see that the cost of litigation will be far less than the dollar amount you are either pursuing (plaintiff) or protecting (defendant).

If it’s a contingency case (with you as plaintiff), meaning your attorney evaluates your case and sees enough upside to take your case on for a percentage of the settlement, it’s also very simple to see that the economics obviously work – otherwise your lawyer would never agree to take it on and become your partner in the suit.

It’s more difficult to make the call when you are either on the defensive side or if you are the plaintiff, but are looking at paying a lawyer’s hourly rate.

In these cases, you can and certainly should ask your attorney for an estimate. Then you can do an economic analysis of the situation at hand. But remember, estimating legal fees is a tricky proposition because of the uncertainty and lack of control created by the process.

For example, if you hired a contractor to renovate your house and the cost was $100,000, and halfway through he walked off the job even though he’d been paid in full, then the value of the case is $50,000 – the amount he has left to finish.

If your lawyer tells you her fees will run you around $20,000, then you very well may feel this is worth it to recoup the $50,000. But if she thinks it’ll be at least $50,000 to do the work, then you have a decision to make, since what you MIGHT get back would be eaten up completely by the cost of retaining counsel.

This is not to say that you can’t or shouldn’t pursue the lawsuit, it just means that economics, and not emotions, should ALWAYS be the focus.

Other types of infringements are more complicated to assess, such as Intellectual Property (IP) cases. If you already have significant equity in the development of a product or specific service, then the fight may well be worth it. If it’s an unproven idea you want to protect (i.e., the product is nowhere ready to be released), it’s much harder to articulate the value, and so the economic evaluation should include some expert (READ: not your own) input.

Once the economic analysis is underway, it at least shifts the focus to the concrete bottom line, which is a hard and fast way to make an informed decision driven by facts, not emotion.

When you are clear on what’s at stake, that’s the first good step at determining whether or not it’s really go time.