Poof! Seeing Litigation as a Business

 This article is an excerpt from a longer article and e-book available for free download by clicking here

Litigation, that is, one piece of litigation, is what I call a “poof business.”

Similar to any other business, a particular piece of litigation has revenue, expenses, full-time and part-time employees, consultants, sometimes a formal budget, some form of organization, a team culture and its success or failure can be measured in dollar terms.  When compared to these typical business traits, a piece of litigation sounds like a business, right?

So, why “poof” you ask?  Well, unlike most businesses built to last for many years, decades or even centuries, litigation has a finite lifespan.  Poof!, it’s there, and poof!, it’s gone.

It’s a peculiar thing really, and I think it is a business model worthy of closer examination.  In this article excerpt (download full article as part of a free e-book on litigation leadership here), I would like to briefly examine one element of the poof business model: leadership.

Poof Businesses

The litigation business is not without comparison.  Other poof businesses do exist.  For example, a movie production, a Broadway play, a concert tour or an election campaign.  Each of these businesses shares traits with litigation that are more than just being created with an end in mind.

Non-poof businesses have a startup phase usually accompanied by some form of business plan. Companies like Google, Facebook and Amazon ran on very little cash in their first few years.  Google only had $100,000 to fund its first year, and Amazon’s first year investment consisted of a few hundred thousand dollars that came from founder Jeff Bezos’ parents’ life savings.  Even Facebook started with a budget of near zero.

Poof businesses, on the other hand, spend millions of dollars in their short lifetimes.  According to the AIPLA, the average cost of major patent litigation is estimated to be at least $6 million with many costing tens of millions.

Leadership in Poof Businesses

As intensely studied as traditional businesses are, poof businesses, by comparison, have received scant attention.  Many authors devote their lives to educating people on leadership in business. Amazon lists more than 50,000 titles about leadership alone.  Still, hardly any of these books give leadership in poof businesses (by any name) any attention.

Many of us in business leadership positions spend significant time and effort focused on becoming better leaders.  Like more than 10,000 other CEOs in the U.S., I spend a full day each month attending Vistage meetings (a CEO focused organization) where the emphasis is on education, methods and ideas for improving leadership.


Leadership in the Business of Litigation

I believe litigation team leadership should be well-defined and openly discussed.

One of the many best-practices that litigation teams can learn from other business teams is that a clear leadership model is imperative to the success of any business; even if that business is short lived by its very nature. I believe choosing the wrong leader for a team can lead to just as bad an outcome as choosing the wrong lawyer to try the case.

As celebrated Vistage Chair David Belden has said, “leadership is not about what you say, your followers are watching what you do and that is all that matters.  To be seen as a leader, you must be seen leading.”  So, what does good leadership look like?

Achieving Level 5 Leadership in Litigation

In Good to Great, Jim Collins describes five attributes of a Level 5 leader, the type of leader associated with the most success.  In two excellent articles on the topic (part 1, part 2), Dr. Carl Robinson offers a guide for becoming a Level 5 leader and summarizes their habits and traits.

Having worked with hundreds of the world’s top litigators in my sixteen-year career in litigation consulting, I believe that those litigation team leaders with traits similar to those described by Collins and Robins have the best results.

Conclusion

I believe that a piece of litigation should be seen as business and can be categorized as a special type of business called a poof business.  It’s leadership should be clearly defined, and it’s leader should be asking himself or herself how they can become, in the nomenclature of Good to Great, a Level 5 leader of their business.  If they can recognize the importance of a clearly defined leadership structure and the importance of the leader having or developing Level 5 leadership qualities, I believe they will deliver the best results for their clients.

To download the complete version of this article as part of a free e-book entitled Leadership Lessons for the Business of Litigation, please follow this link.