The Economics of Litigation Trey Cox, Rick Anigian, Allen Jacobs, and Rebecca Szelc October 2014

Agenda Experienced experts and trial attorneys discuss the economic drivers in litigation What Are the Trends in Litigation Cost Reduction? What Are the Expense Drivers in Litigation? Optimizing the Settle/Move Forward Decision Best Practices in Cost Reduction

What Are the Trends in Litigation Cost Reduction? Alternative Fee Arrangements Fixed fee—with or without a collar Discounts with specific level increases Capped fee or not to exceed Contingent fee/Reverse contingent fee Blended fee (hourly plus a contingent or “success” component) Arbitration Clauses Is arbitration really less expensive anymore? Provisions to consider Optional appellate procedure

What Are the Expense Drivers in Litigation? Discovery ESI Discovery disputes Production Document Review Agree with opposing counsel in advance on custodians and search terms to include in ESI review

Optimizing the Settle/Move Forward Decision What are the decision criteria for when and how to settle? Precedence Likely “copy-cat” suits (tail considerations) Fact/discovery/confidentiality issues Cost of defense Modeling the decision Scenario analysis and costing (a litigation P&L model) Applying probability theory

Best Practices in Cost Reduction Decide early on the lead trial attorney Treat all serious matters as if they will go to trial. Establish early a concise, jury-palatable theory. Avoid rabbit trails and missed opportunities. Limit the size of trial team as much as possible. Only educate the number of attorneys necessary to present case at trial and to properly take and defend depositions. Others can be involved on a task basis, but will not need to know all of the background facts in order to contribute. Decide which depositions need to be recorded by video and other means, such as Live Note. Do you need more than one attorney at a deposition?

Best Practices in Cost Reduction (cont.) Involve consulting or testifying experts (both internal company personnel and outside experts) in the discovery process Ask early for what you will need (without the kitchen sink) Think about conducting document discovery in stages. Start with rifle shots and decide if you need to serve additional requests. Get the right deponents to the table (ask the right people the right questions at the right time) Early deponents should assist in framing future document requests. Find useful documents to facilitate favorable settlements. Do not treat mediation like a trial Do not spend time/money on small procedural victories of little consequence to case outcome

Biographies Trey Cox is a founding partner of Lynn Tillotson Pinker & Cox, LLP and is consistently recognized as one of the country’s best trial lawyers. He has spent nearly 20 years helping clients, from Fortune 500 corporations to entrepreneurs, resolve large, complicated, and often high-profile business disputes. His jury trial experience and courtroom success have earned him the distinction of being double Board Certified by the National Board of Trial Advocacy. Rick Anigian is the chair of Haynes and Boone, LLP’s Business Litigation Practice Group. Rick concentrates on a variety of complex commercial disputes in federal and state courts, as well as arbitral proceedings. Rick has extensive experience in commercial, mergers and acquisitions, financial transactions, and bankruptcy-related litigation, real estate, and oil and gas disputes. He has handled complex disputes among partners and business owners, as well as a wide range of business torts litigation. Rick also has significant experience in the area of technology litigation, including theft of trade secrets and non-competition disputes.

Biographies (cont.) E. Allen Jacobs is a director at BRG. He has testified as an expert on economic and financial issues in federal and state courts and before federal regulatory boards. He has been certified as an expert by federal courts in antitrust, economics, economic damages, and finance. Allen’s testifying assignments have included estimation of damages, antitrust analyses, corporate valuations, evaluation of financial structures, valuation of financial instruments, and evaluation of class certification for securities litigation. Rebecca E. Szelc is a director at BRG. She has extensive experience as a consulting and testifying expert on economic damages issues associated with a variety of complex commercial disputes, including tortious interference, theft of trade secrets, patent and copyright infringement, false advertising, loss of use, and breach of contract. She has provided expert testimony in commercial lawsuits, mediations, and arbitrations.

Biographies (cont.) Rob Maher is a director of Business Development at BRG. He focuses on matters with an emphasis on economic, finance, accounting, and investigations, primarily in Texas. He brings 12 years of experience in litigation consulting to advise clients and their counsel, corporate legal departments, and government agencies worldwide in identifying and selecting the expertise relevant to their cases and identifying the appropriate expert for the matter. Specifically, he has experience addressing complex commercial litigation matters related to breach of contract, theft of trade secrets, bankruptcy litigation, securities litigation, patent infringement, and internal investigations.

Disclaimer The opinions expressed herein are those of the individual authors and do not represent the opinions of Berkeley Research Group, LLC; Haynes and Boone, LLP; and Lynn Tillotson Pinker & Cox, LLP or their other employees and affiliates. The information provided is not intended to and does not render legal, accounting, tax, or other professional advice or services, and no client relationship is established with these firms by making any information available in this presentation. None of the information contained herein should be used as a substitute for consultation with competent advisors.