What if a law department added up all the months its lawsuits have been underway, and divided by the number of lawsuits? That metric would be a weighted average of duration, and if cycle time matters, the department should strive to reduce the metric over time. With this calculation, if done month after month, the law department should strive to show that its inventory of cycle time is diminishing. The shorter the average cycle time, the closer a law department moves to a claims-management approach.
What if the department divides those total months by the total amount spent since inception on all those lawsuits? That would be the weighted average, monthly burn rate of litigation. With this second calculation – a blended run rate for litigation – law departments will be more accurate when they forecast their spending. They will also have a baseline against which they can show improvement.
Third, but beyond the scope of this post, the length and cost of the case portfolio needs to be assessed in terms of total cost of resolution (See my post of Dec. 10, 2005 on BellSouth and TCR).