Wednesday, January 28, 2009

Thoughts on Strategy, Preventive Law, Rambo Lawyers and Sun Tzu

I wrote about applying Sun Tzu to legal matters in Protecting Your Business and Going to Court. Sun Tzu was an ancient Chinese general who wrote the Art of War. Today, I am writing about litigation and preventive law and why preventive law is the best legal strategy for a business.

Strategy has a central place in business and law. I am thinking of the following definition of strategy:

2 a: a careful plan or method : a clever stratagem b: the art of devising or employing plans or stratagems toward a goal...
Under Indiana's Rules of Professional Conduct, the client has to set the goals and the lawyer has to figure out how to reach those goals.

Mark McNeilly has a web site for his book applying Sun Tzu to business (and he is not the only one apply Sun Tzu outside the military; see here and here and here and here). I suggest reading his article, The Six Principles from Sun Tzu and the Art of Modern Warfare.
Sometimes clients want an all-out war. Panic and/or anger motivate this kind of strategy. They do not like being told to consider the costs and the benefits of this strategy. They will say that cost is no objective. I generally avoid these kind of clients - in the end costs mean everything. This past year I dealt with two clients of this type. Before you start a total war consider this:

If the goal of a country is to survive and prosper, then what is the goal of its strategy? Sun Tzu offers this advice:

Your aim must be to take All-under-Heaven intact. Thus your troops are not worn out and your gains will be complete. This is the art of offensive strategy.

The second principle is an important tenet of this philosophy: avoid strength, attack weakness. This principle discusses how to win All-under-Heaven intact.

Now an army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army avoids strength and strikes weakness.

Although many generals prefer to attack each other head-on, this approach is very costly. As discussed earlier, wars of attrition can last for months and even years, leaving both sides in a weakened state. Instead, using the method of avoiding strength and attacking weakness maximizes one's gains while minimizing the use of the nation's resources. This, by definition, increases prosperity. This principle is discussed in detail in Chapter 2, Avoid Strength, Attack Weakness: Striking Where The Enemy Is Most Vulnerable.

For the two years (almost) of this blog, I have tried to tout the virtues of preventive law. Since this goes against the common conception of lawyering, I have met with no success. With the worsening economy, I expect to see even more businesses straining to save pennies so that they can waste dollars. Litigation may be necessary but it should not the first resort of any business fro dealing with its legal issues.

Not that the Bar does much to dispel the public's idea that the knuckle-dragging, take no prisoners litigator is the epitome of a trial lawyer. We even have a term for them: Rambo litigators. Go back to my quote from McNeilly and you will see who is not the Rambo litigator in that quote. Compare that with Proper Handling of the "Rambo" Litigator and you should see the weaknesses of the Rambo litigator. The public does not seem to understand the difference between fighting hard and and a noisy fighter. As the song goes, not all that glitters is gold.

Consider this paragraph from "Rambo" Litigators Are Losers -- And So Are Their Clients:

"There is a common MISperception in the public that the 'Rambo' or 'pit bull' litigator is a good thing, and that those types of litigators are more successful than others. That's a myth. The reality is that such litigators 1) act like that because the are more interested in soaking their client for fees than in actually getting a good result, 2) engage in such tactics to leverage a settlement because they are terrified of actually having to go to trial, and 3) are less successful than attorneys that follow the rules and know the law."

Why do I think preventive law is the best idea for businesses? Waiting for the Complaint to arrive means that the other side gets to choose the ground for the lawsuit. In any fight, each sides wants to choose its won ground. The Yankees prefer Yankee Stadium and I suspect George Custer wished he had chosen some place else other than the Little Bighorn.

What makes preventive law better for a business than an army of Rambo litigators? Let us go back to Sun Tzu for the utility of prevention:

3. With regard to ground of this nature, be before
the enemy in occupying the raised and sunny spots,
and carefully guard your line of supplies. Then you
will be able to fight with advantage.

4. Ground which can be abandoned but is hard
to re-occupy is called entangling.

5. From a position of this sort, if the enemy
is unprepared, you may sally forth and defeat him.
But if the enemy is prepared for your coming, and you
fail to defeat him, then, return being impossible,
disaster will ensue.

6. When the position is such that neither side will gain
by making the first move, it is called temporizing ground.

7. In a position of this sort, even though the enemy
should offer us an attractive bait, it will be advisable
not to stir forth, but rather to retreat, thus enticing
the enemy in his turn; then, when part of his army has
come out, we may deliver our attack with advantage.

8. With regard to narrow passes, if you can occupy
them first, let them be strongly garrisoned and await
the advent of the enemy.

The book has other examples comparing and contrasting the arrival of the army at a position before the enemy (for commentary on this section of The Art of War go here). Preventive law works to get the client in a good position before a lawsuit.

Do not think that I am alone in my thinking about applying Sun Tzu to litigation, or how The Art of War provides the antithesis of the Rambo litigator. You may also want to read The Art of War and Public Relations: Strategies for Successful Litigation PR and Successful Early Resolution Strategies (PDF format) and SUN TZU's TIPS on Effective Mediation. The pithiest example of similar thinking comes from's Nanotechnology litigation: Winning the war before it starts:
"In the 6th century B.C., Chinese strategist Sun Tzu observed that “victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” These words remain instructive for 21st century nanotechnology companies inevitably facing growing litigation risks as concerns about health and environmental implications continue to mount. As scientific research, regulatory action, and public opinion begin to crystallize, businesses still have a rare chance to shape the future fight. By anticipating trends and taking proactive measures now, nanotechnology companies may even win the war before it starts."
Sun Tzu also wrote about "The Nine Situations." These are:
 1. Sun Tzu said:  The art of war recognizes nine varieties of ground:
(1) Dispersive ground; (2) facile ground; (3) contentious ground;
(4) open ground; (5) ground of intersecting highways;
(6) serious ground; (7) difficult ground; (8) hemmed-in ground;
(9) desperate ground.

I have always read them as being about position and what to do in these situations. (For more detailed commentary on these nine situations, go here). That is get the other side on desperate ground for the fight. Without the client involving its attorney into its strategy, the other side gets to choose the ground for the fight and gives to them the advantage of placing the business into desperate ground.

Not that preventive law will remove all risk of litigation. As we have seen from the recent Wall Street debacle, anything thinking they can eliminate all risks are delusion. What preventive law can do is mitigate risks of litigation and litigation's costs. I cannot think of a better conclusion to this discussion of preventive law and Rambo litigators than this from The Art of War- Litigation and Business Mediation by Ashley Mediation Centers:
"Such litigation practices are, in fact, the product of poor lawyering. As Sun Tzu wrote:

'To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.'"

But how does one break the will of one’s adversary to litigate without litigating? The answer, according to Sun Tzu, lies in making careful calculations prior to commencing litigation which assure victory.

"The general who wins a battle makes many calculations in his temple before the battle is fought. The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat; how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose."

This may appear as an admonition to be smart — but guidance many of us may be constrained from observing by genetics. What Sun Tzu is really saying, however, is to fully use the intelligence one has to carefully think through the strategies one intends to apply to bring about victory as quickly and painlessly as possible. One must resist the temptation to mindlessly implement the same tactics one has regularly employed in the past. Always ask where the opponent’s vulnerable points lie, and how one may fully exploit them within the limits of the ethics and mores of our profession and society.* One’s goal should be to elevate oneself to the status of the "victorious strategist," who Sun Tzu describes as follows:

"Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterward looks for victory."

At the same time, one must accept without shame that sometimes, no matter how carefully are laid schemes, a case cannot be won. The "terrain" (facts) may not be as the "spies" reported; the "gods" (judges) may throw "thunderbolts" (adverse rulings) at one’s advancing army; or one may find the army swept up by an unanticipated "flood" (change of law). Nevertheless, one may still look oneself in the mirror with the knowledge that Sun Tzu regarded the general who "retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, [to be] the jewel of the kingdom."