There are few things as wasteful and painful as litigation. And that’s from someone whose career started as a litigator and, after a long tenure in-house, now works for a litigation boutique! While sometimes it is simply unavoidable and necessary, any in-house lawyer can tell you that litigation is expensive, time-consuming, distracting, frustrating, risky, and very difficult to predict outcomes. As a result, ending litigation is usually a great feeling (sometimes celebrated with bottles of expensive champagne). Still, litigation rarely ends with a jury verdict or bench decision. It usually ends with a settlement, i.e., an agreement by the parties to the litigation to end the matter based on some agreed upon terms. Sounds simple, right? It’s not.
A settlement agreement is an extremely important document and should receive the same level of attention to detail as any other complex contract your company might enter into. There are many ways a settlement can go “wrong” and that is why the agreement is not something to leave solely to the outside lawyers once the “deal has been made.” In-house counsel need to be intimately involved with the documentation and execution of the deal. Simply put, careers can end because of “bad” settlement agreements. You do not want to be on the receiving end of a settlement agreement that turns out NOT to be the deal you (and the CEO or Board) thought you had to end the litigation. Since many in-house lawyers rarely deal with litigation, let alone settlement agreements, this addition of Ten Things will discuss some of the key things you need to keep in mind when settling litigation so you can do your best to make sure it’s really over: