Published on:

Transaction costs of transferring ongoing cases to a replacement law firm

Despite yearning to reduce law firm costs, despite dissatisfaction with one or more firms currently handling litigation, despite finding a firm that offers better prospects for costs and results, despite all this most in-house litigation managers balk: they are worried about loss of case-specific knowledge and about savings being eaten up by the transfer’s transaction costs.

Such concerns are over-rated. The replacement firm will absorb some of the ramp up expenses of becoming familiar with the case and making the necessary filings. Second, the first firm was not performing as effectively as you would like – or you wouldn’t be pondering the switch. Third, a new set of eyes might see in the case possibilities for resolution that the previous firm had been blind to. Fourth, the files and pleadings to date can accelerate learning about the case, although admittedly they do not capture the personalities of those who are enmeshed in the litigation. The net cost of transferring cases, even those that are mature and long-running, can be minimal.