Demand for expert services has remained steady for years, but competition within the industry has recently “intensified” due to an increase in the numbers of experts and a diversification of their expertise.1
However, despite the increased availability and diversity of experts, at the recent Complex Commercial Litigation (“ComCom”) Conference of the Massachusetts Bar Association, during a panel discussion, one judge expressed “bewilderment” at how poorly litigators select their testifying experts. The other judges on the panel concurred.
Given the significant impact an expert can have on the outcome of a dispute, and the significant investment of time and money required to present expert testimony, why do many firms struggle with managing this important piece of complex litigation cases?
There are two overarching, and somewhat opposing, challenges in managing expert witness engagements. One is identifying the appropriate expert, quickly, who is capable of handling the clients’ case. The other is controlling cost. There are several common reasons that the cost of expert services is, or eventually becomes, out of control. Often, this significant cost is unavoidable. However, there are several mistakes law firms typically make that may exacerbate the problem.
The first mistake often occurs at the very beginning of the process: Actually selecting the witness.
In too many cases, attorneys rely on their friends and coworkers to identify expert witnesses. The problem with this internal search approach is that it usually results in a small, homogenous pool of options. Additionally, if a referral comes internally, attorneys may be naturally more likely to accept that the referral is a good option, whether or not it should be considered so on an objective basis. This type of assumption by the attorney often means that the attorney does not perform comparisons of expert qualifications or potential costs.
At the very least, to better manage your expert network, law firms should establish a permanent, easily located, internal databases of experts hired, or even considered, by the firm. We recommend the database include:
Another best practice is to leverage this well-maintained network of experts for referral, when a new expert or unique expertise is required. Experts are usually more than happy to assist firms locate the right expert for the job.
The Institute for the Advancement of the American Legal System (IAALS), along with the Forensic and Valuation Services Executive Committee of the American Institute of Certified Public Accountants (AICPA), conducted a study to find ways to reduce client costs in civil litigation. One of the four recommendations resulting from that study is that attorneys should involve financial experts early in the litigation process.2 This study found that delaying expert retention resulted in poor expert selection, ineffective case management and missed opportunities for achieving better efficiency in areas of interrogatories, document/data requests, and depositions.
For an expert to be responsive under a shortened timeline, they are often required to ramp up their teams with a less-than-ideal staffing mix or, they may not have the opportunity to leverage work appropriately. The lack of leverage means that your clients pay for labor hours at higher billing rates.
As most people in professional services occupations know, operating under a sudden “emergency” deadline rarely results in greater efficiency. In fact, concern for cost management becomes entirely lost under heightened pressure to complete the job quickly. Unfortunately, quality may also become jeopardized. A shortened window of time prevents the financial expert from fully digesting the evidence, which may reduce their ability to devise a properly supported position for the client.
The amount of data generated by companies in today’s business environment is astounding. It’s important to remember that not all that data is necessary to win cases.
Hiring an expert consultant early in the litigation process can help attorneys better identify the critical data the expert witness will need, thereby limiting the totality of data or documents produced in discovery. This process will save time, effort and money in the long run.
Further, attorneys should understand that what they need to support their case is not entirely congruent with what their expert might require. Efficient firms will invest some of their staff’s time to cull the amount of information turned over to the expert, ensuring they have what they need to formulate an opinion-and nothing more.
Competent experts won’t request documents or data in discovery that aren’t necessary to formulate their opinion. When working with an expert, thoroughly lay out the issues of the case with the expert, specify the exact issues you need them to opine on, collaboratively discuss the data and documents likely required for them to arrive at a supportable opinion and challenge the expert’s document/data request list. If an expert can’t adequately explain why they need particular information and what they are going to do with it, don’t provide it. This early restraint will pay off with savings on the hours of time required to review unnecessary documents.
Depending upon the specifics of your case, consider hiring an expert jointly. There are many circumstances, in litigation and arbitration matters, under which this ‘neutral expert’ option is viable, and the result could be a reduction in costs for both sides. If the parties can agree on:
Then the use of a jointly retained expert witness is possible. There are unique risks to this approach. However, if managed properly, significant efficiencies can be attained. Recently, considerations for implementing this approach were skillfully discussed in an American Bar Association article titled, “The Practical Implications of a Jointly Retained Expert Witness.”3
Hiring a third-party expert witness can be an incredibly time-consuming and expensive process. But, at the same time, it could be the difference between winning and losing.
By avoiding the mistakes listed above, your firm will be able to more effectively and efficiently manage expert engagements; and better control your clients’ costs.
1 Expert Witness Consulting Services in the US, IBISWorld, Inc., December 2015
2 Financial Experts on Reducing Client Costs in Civil Litigation, Civil Litigation Task Force, AICPA, 2012