Answer to Question of the Week #1
Here are the results to Question of the Week #1. We received a total of 321 responses — thanks for your participation!
What’s the best way to control skyrocketing employment litigation costs?
a. Require all employees to sign mandatory arbitration agreements (41%)
b. Take a “no settlement” approach to litigation (14%)
c. Require law firms to adhere to billing guidelines and litigation budgets (32%)
d. Move your business to Antarctica so that you’ll have no employees and thus no lawsuits (13%)
We believe that the best answer to this question is “c.” Here’s why . . .
Many of us in the Manpower Legal Department used to work in big law firms. As a result, we’ve developed a pretty good feel for what’s fair — and unfair — for law firms to charge. We developed the law firm guidelines and the budget, report card and RFP tools in the “How to Keep Lawyers from Taking All Your Money” section to help keep legal fees in check. We’ve found that using those tools in combination saves $$$ far beyond anything else we’ve tried.
The top vote-getter was mandatory arbitration with 41% of the votes. In our experience, arbitration can be a decidedly mixed bag. The prospect of going to court and facing a judge and jury can have more of a deterrent effect on potential plaintiffs than the prospect of facing a lone arbitrator in some dingy hotel conference room. In addition, arbitrators are famous for “split the baby”-type awards rather than taking a hard stance in favor of either party (even if the facts strongly favor the company). Last, some cases wind all the way through the arbitration process (with discovery and briefing costs just like court litigation) only to wind up in court anyway when the losing party appeals the arbitration award.
The “no settlement” approach generally only works for operations located in a small town or region where word of the settlement might result in “copycat” filings. In our experience, adopting a no-settlement policy leads to increased litigation costs and is particularly unwise in any case in which the company has significant exposure due to wrongdoing.
Lastly, as a long-time resident of the chilly state of Wisconsin, I can sincerely appreciate the 13% of the respondents who would rather move to Antarctica than face litigation.
