Almost 10 years ago, I read about an absurd case that was pending in Miami federal court. The corporate plaintiff and their big corporate law firm had taken what was really a breach of contract situation and tried turning it into antitrust, unfair competition, and a bunch of other claims. I followed the case in real time. And I wrote multiple blog posts about what a train wreck the case was, critiquing the corporate plaintiff’s terrible strategy, and predicting the future (bad news bears). I was right. It ended in a disaster. The corporate plaintiff lost and got tagged for $15 million in attorneys’ fees. Then there was a legal malpractice case. I know, because I was the plaintiff’s expert witness.
My Vantage Point: I Got that Eye of Thundera, Son
Let’s be really real at the risk of trampling on fragile egos. When I started my career in law, Boies Schiller & Flexner was one of the most preminent law firms in existence. They were the hotness. I learned from the best. My two primary bosses both clerked on the United States Supreme Court. My original area of substantive expertise was antitrust law. I was an antitrust geek from the jump, going back to law school. As a first year associate, I got roped into wild antitrust projects. I was a 2nd year lawyer writing the first draft of major antitrust motions in $100 million cases. I also spent a lot of time on investment fraud and everything that flows from that. I was a 1st or 2nd year lawyer coming up with ideas to prevent a $1 billion securities fraud class action from getting dismissed on jurisdictional grounds. Facts.
As a 3rd year lawyer, I left BIGLAW and hung my own shingle. I basically practiced door law. That means you take everything that comes in the door. No, I didn’t fuck with things like criminal law, family law, probate, etc. I stayed in the civil / commercial arena. But anything within that arena, I would run with it. Sick building case? Dispute between rival stamp collectors? Investment fraud? Jammed up on a non-compete agreement? And that’s where I had my first epiphany: The non-compete cases.
As everybody knows who follows my work, I’ve got a big problem with employee non-compete agreements. The vast majority of such agreements are point blank illegal. They are illegal restraints of trade. They do not protect any legitimate business interest. They just exist to eliminate fair and ordinary competition. It’s an antitrust issue. I know — because I’m also an antitrust lawyer. But try telling this to a random judge in Florida. I federal judge once told me, point blank: I don’t know about all this antitrust. But I enforce non-compete agreements all the time. Mind blown.
So I decided, yeah, I’ll mess with this for a bit. Florida had/has a terrible non-compete abuse problem. And back in 2012 when I started doing this, courts were rubber stamping non-compete injunctions left and right. Oh, you got a non-compete? Here’s your injunction. And that is not how the law is supposed to work. Nobody really stood up to that in Florida. Why? Because the pro-non-compete forces are so powerful (big companies, corporate lawyers, BIGLAW firms). So I carved out a niche defending non-compete cases. And then non-compete and trade secret cases. And then anything connected or attached to that broader arena. Unfair competition. Tortious interference. Fiduciary duty. Computer Fraud and Abuse Act.
Over time, I got bigger, more complex, and higher dollar cases. C-level executives. Entrepreneurs. Bet the farm type litigation. So here I am in a jurisdiction that is basically pro-non-compete. Many courts and judges have a hair trigger when it comes to granting non-compete and trade secret injunctions. I’m operating in this generally unfavorable landscape. And we do take some losses. But, on the whole, we manage to win the vast majority of our cases in some fashion. That win could be at the preliminary injunction stage, at appeal, at a trial or final arbitration, via settlement, via a corporate bankruptcy strategy, etc.
Here’s why that matters: I’ve been doing this complex, high stakes litigation for years. Thousands of hours. Cases with all sorts of risks and minefields. Calibrating strategy. Calling shots. Sometimes throwing Hail Marys. Unorthodox. Southpaw. Wild card. Legal strategist and litigation architect.
I’ve been doing this for a decade via a small law firm that I own. We usually have just 4 or 5 lawyers. And we’ve managed to do this at the highest level. Sometimes in very ugly cases with many millions at stake. If BIGLAW screws up, they almost never suffer real consequences because they are so big. If a 4 or 5 lawyer shop screws up, they tend to disappear.
You see: I know what I know. And I know what I don’t know. I don’t fuck with anything that I don’t 100% know and understand. And I am always cognizant of the unknown unknowns. Rummy was right about that premise. And Nassim Taleb writes about it all the time.
Typical Litigation Train Wrecks that I See
I’ll just spit on this one. Here are some of the most common scenarios:
- Never-ending state court litigation. Florida state court. Call it trade secret litigation. Other side wants millions of dollars. Case has been in court for a year or two already. Zero progress. Hundreds of thousands of dollars already spent on attorneys’ fees and discovery. No plan. No strategy. Purely reactive lawyering. No end in sight.
- You picked the wrong fight litigation. Armed with a BIGLAW firm, a company files a lawsuit. Let’s say it’s a non-compete and trade secret lawsuit. But they dress it up with lots of other claims. BIGLAW says it’s a slam dunk. A year in, $500,000+ fees later, and the client is not so sure. The client wants to get out of dodge, end the case, walk away. But the lawyer wants to keep going. The client is getting worried. Why can’t they get a walk away? Uh oh. The other side has countersued. They have real claim. And there’s fee exposure — the client is going to lose and be on the hook for the other side’s attorneys fees.
- Bet the farm litigation that is not being litigated like it’s a bet the farm case. Call it $10 million at issue. The more at stake, the bigger the chess board. The more you have to consider all options and alternatives. Big picture thinking. But, instead, the lawyers are running the case like it’s a typical case, paint-by-numbers, going through the motions. Big bills though. And it feels like the future / fate is just sort of floating in the breeze. No plan. No strategy.
- The discovery quagmire. Call it a trade secret or computer fraud and abuse case. Anything in the wheelhouse of misappropriation or unauthorized access to computer systems or technology. And the case has basically turned into a mostly worthless and endless exercise in discovery. Fighting over every single document and discovery request (why?). Meanwhile, hundreds of thousands of documents collected and exchanged. Those documents all have to be reviewed. Many computers and phones collected. Definitely a case that’s being billed by the hour. And you totally lost sight of the actual end goal. The goal now seems to be doing more discovery for the sake of doing more discovery and because every other lawyer and law firm does endless discovery. Ring a bell? Shocking. Got that Eye of Thundera again.
Two Roads Diverged in a Yellow Wood: Options
A fairly typical approach in these train wreck cases is just to keep going in whatever direction you’re already headed. It’s the basic principle of inertia. The sunk cost fallacy. Sometimes I see litigants in these cases bring in another BIGLAW firm. I’ve seen a case where the 2nd BIGLAW firm came in, basically co-signed on what the 1st BIGLAW firm was doing, and just said let’s do MOAR of the same (i.e. MOAR billable hours). Train wreck. Huge judgment against the client.
Let’s out with the elephant in the room: A big part of this whole mess is billable hours. The lifeblood of BIGLAW but a truly perverse system. Consider the discovery phase of litigation. I’ve written lots over the years about discovery. In cases like this, discovery is basically the BIGLAW buffet. The feeding trough that never runs low. And they set it up that way. Think about all this in terms of (a) the actors involved (b) the interests in play and (c) the system or systems involved.
Many lawyers are risk averse. And many lawyers always hedge. Legal doublespeak. Only “maybe” and never a clear “yes” or “no”. CYA. Going on endless discovery crusades fits with that product and that worldview. They can easily sell the client (even a big corporate client) on the following theory: We have to leave no stone unturned because there could be a smoking gun somewhere in this universe of 1 million documents. We have to take 20 depositions. We need to review and re-review every single document that could possibly implicate this case even if it costs $500,000.
Even big companies fall for that sort schtick. Privately held entities fall for it all the time — even ones with $200 million. Who rebels against the endless discovery play? In my experience, only really badass, sophisticated general counsels who actually know the game, have heavy duty litigation experience, and are confident in their own judgment.
It’s the easiest sell: If you – client – don’t let us conduct this WWIII level massive discovery operation, we could miss something and you will lose the case. And if that happens, we are not responsible for it — because you hired us for our judgment and didn’t trust our judgment. Like shooting fish in a barrel.
Any person or company that really starts cranking in business and makes lots of money needs to get a really good lawyer as one of their primary advisors. Somebody with broad experience in business and litigation. Because once you start talking about $20 million, $30 million in revenue… and growing … you’re going to start having legal problems. It comes with the territory. It comes with growth. Especially in places like Florida. Florida generally tends to protect entrenched market actors. So growing companies often run into lots of problems with bigger, entrenched rivals (bogus non-compete, trade secret, tortious interference, etc cases).
Especially early-stage, growing companies …. You hire a lawyer in-house as soon as you can afford it. Until then, you find someone to be your real counselor / advisor / strategist. Because when you hit the bigger leagues and these legal / litigation problems crop up …. and they will crop up … you need sound advice. Not advice that is calibrated to what will result in the greatest number of billable hours. But advice that truly is geared toward protecting your best interests.
Maybe that was somewhat of a tangent, but this is all pertinent. And it brings us back to the ugly reality: Yeah, this is fundamentally about billable hours.
Many of these litigation train wrecks were never driven by sound advice, good judgment, strategic considerations, business realities and business goals. They were driven by billable hours.
I don’t dabble. I stay within my area of knowledge and expertise. But lots of lawyers dabble. They can’t turn away a big case and lots of billable hours. So they take cases where they don’t really know what they’re doing. Cases that they are not properly equipped to handle.
And then they step in it. They get into the case. They start doing a bunch of haphazard litigation and discovery. They bill $500,000 or even millions of dollars with more to come. There’s endless discovery. The case turns into a train wreck. And now the lawyer / law firm is stuck.
Look, not every strategy is successful. But there’s a difference between a strategy that is reasonable and potentially viable that ultimately proves unsuccessful and a strategy that was never reasonable or viable from the outset. Or, situations where there is no strategy other than get into the case, bill hours, and figure it out on the fly.
I see those cases all the time. You’d be surprised who calls me. And in those cases, the lawyer / law firm is in a real pickle. They have royally messed things up. Maybe even to a degree of legal malpractice. They frequently refuse to consider another strategic option let alone implement another strategic option.
They say we just need to keep going — ahh, the double down on bullshit and hope for a miracle strategy. Classic approach.
They get angry and defensive about their judgment not being trusted anymore.
They cannot bring themselves to admit that they did not have enough experience in this particular type of case and should have declined the engagement.
Bottom line: Litigation train wreck? Better get a second set of eyes on it.
Jonathan Pollard is a lawyer and writer. Pollard has litigated more than 100 complex, high stakes cases involving non-compete agreements, trade secrets, unfair competition, tortious interference, computer fraud, and more. Pollard and his colleagues at Pollard PLLC have been recognized by both Super Lawyers and Chambers and Partners. Pollard has appeared in or on the New York Times, Wall Street Journal, NPR, PBS, Inc. Magazine, The Guardian, The New York Post, Above the Law, and more. Pollard PLLC has offices in Fort Lauderdale, Miami, and St. Louis. The firm’s can be reached at 954-332-2380.
