|John E. Osborn and Eric L. Guhring
October 1999Originally printed in The Metropolitan Corporate Counsel, October 1999
Why Excellent Inhouse Counsel Facilities Cost Effectiveness And Winning
Cost effectiveness and success in the resolution of construction disputes is determined by a recipe. The recipe is different for each dispute because the characteristics and ingredients of each construction project and the participants and their quality vary widely. It is clear that the quality of inhouse counsel significantly affects the cost and success of the dispute resolution.
Protracted dispute resolution has a severe negative impact on the client, is expensive and creates a negative impression of the outside counsel managing the dispute resolution process. When the dispute resolution process stalls, costs get out of hand and the client’s staff and resources are strained; no matter how successful the ultimate result, failure to reach a prompt closure on the construction dispute costs an extraordinary amount and derails productivity of client staff. Excellence of inhouse counsel is appropriately measured by the ability to reach prompt and favorable resolution before significant legal fees and personnel resources are expended.
The following are some of the reasons that inhouse corporate counsel are so well positioned to be effective in managing construction disputes:
What Inhouse Counsel Does – Specifically – To Help With The Construction Dispute: The Major Hotel Renovation
The major hotel renovation project is a good example of a construction dispute in which a lot of money is at stake. It is clear that if project problems delay the opening of the hotel, significant revenues will be forfeited. The construction or renovation contract must take this into account at the outset so that, if there is a dispute, or an unanticipated condition encountered, the parties will have guidance on resolution. The converse is also true: if the architect or contractor is delayed by the owner, his costs may be significant. Suffice it to say that getting to the bottom of the problem, at the earliest stage possible, is essential. A realistic view of the facts and practical views toward resolution are essential ingredients.
Inhouse and outside counsel – as a team – are in a good position to reach a prompt realistic and practical resolution by doing the following:
Litigation must be a tool toward favorable settlement. Getting an accurate and realistic view of the case at an early stage is essential to being cost-effective and winning. Being passive and simply letting the process “play out” is not an option – it is simply too expensive and the result too unpredictable.