As you know, we often speak about the high cost of litigation (and our last blog was on this very subject) but specific instances really hit home.
How much do you think a fairly standard injunction will cost you as a client, if you decide to instruct an “IBM-principle*” City firm? Remember the partner will be on £500/hr., the associate £350 and the trainee £150. That adds up to an eye-watering £1,000/ hour. Running at that rate, the fees on your side alone can well add up to £150,000 – and now multiply that by 2. That is not a hypothetical figure.
We would suggest that to justify that level of costs to the Board, one would have to say that it was a “bet-the-company” situation, but in the main that is not the case, which only heightens the embarrassment.
The way around that situation? The first tactic is “not to start from here”, otherwise known as the Prima Facie principle (contact us for more on that count). The next is that the oft-quoted “IBM-principle” is dead. If you instruct your panel City firm and lose, incurring £X00,000 in legal fees, expect repercussions from the C-suite. We suggest that substantially under-spending your opponent is good (win or lose). If you win, expect to get back a very high percentage of your billed costs; if you lose, having spent far less on your own count you stand a good chance of slashing your profligate opponent’s bill.
The irony of the situation is that big (and expensive) never guarantees the best service – its time to put that myth to bed.
* "nobody ever got fired for buying IBM"