How Do You Know if You’re Getting Value for Your Litigation Spend?

Contents

The “more for less” challenge confronts every director and general counsel responsible for managing litigation. You’re facing flat or shrinking budgets while litigation demands intensify. Regulatory disputes, shareholder claims, contractual fights, the risks keep growing, but the money available to manage them doesn’t.

“More for less” is about value. How do you get better value for your litigation spend?

But here’s the problem: you can’t achieve better value without an objective sense of what value actually looks like in litigation.

So the real question is: how do you know when you’re getting value for your litigation spend?

Key Takeaways

  • Value is not just about price: The cheapest lawyer charging $500 per hour may cost more than the $800-per-hour specialist if they take twice as long or miss critical issues
  • Result alone is a poor measure: A win that cost three times more than necessary is not good value, no matter how satisfying the judgment feels
  • Your lawyer must have a framework: Value cannot be delivered without a structured approach covering alignment of interests, outcome focus, responsive service, effective execution, and objective advice
  • Proportionality matters: Australian courts actively scrutinise whether litigation costs are proportionate to the issues and amount in dispute, with penalties for wasteful conduct
  • Directors carry personal risk: Approving meritless or disproportionate litigation spend can breach your duty of care under section 180 of the Corporations Act
  • Early case assessment drives value: The biggest savings come from rigorous analysis at the start, not cost-cutting during the fight

The Problem: We Use Crude Proxies That Disguise Value

Most clients resort to two poor proxies for value when assessing their litigation spend: result and price.

Let’s start with result.

Why “Did We Win?” Is a Poor Measure of Value

By “result”, I mean whether you win or lose at trial. It’s the most emotionally satisfying metric. It’s also one of the least reliable measures of value.

Why?

First, the biggest predictor of the outcome of litigation is the facts and the legal consequences of those facts. Not even the most effective lawyer will achieve a result that is at complete odds with the facts.

Think about that for a moment. If the contract clearly says X, and you did Y, the most brilliant barrister in Australia cannot turn that into a win. The facts are what they are.

This is not to say that lawyers do not play a critical role in achieving a particular result. They do. Strategy, evidence handling, cross-examination, and advocacy all matter. But no lawyer can control the outcome when the underlying merits are weak. There are always factors that will affect the outcome of a dispute beyond the control of even the most brilliant lawyer.

Second, you may achieve a successful result in a dispute but spend substantially more than was necessary to achieve that result.

That can arise for a whole host of reasons: undertaking work that was not necessary, duplication of effort, general inefficiency, over-lawyering a straightforward dispute, or poor project management.

As Justice Finkelstein observed in Black and Decker v GMCA [2007] FCA 623 at [4]:

“A case that is reasonably well prepared is just as likely to be decided correctly as a perfectly prepared case.”

Read that again. A reasonably well prepared case is just as likely to be decided correctly.

The insight is powerful: perfection is expensive, and it rarely changes the outcome. The lawyer who spends an extra 40 hours polishing submissions that were already clear is not adding value. They’re adding cost.

If you win, but you spent $400,000 when $200,000 would have achieved the same result, that’s not good value. That’s waste dressed up as victory.

Why Price Alone Tells You Almost Nothing

Price, based on time, is often used as the most basic measure of value. Clients compare hourly rates like they’re comparing petrol prices.

In my experience, price is one of the poorest indicators of value.

Using price alone, how can you make any realistic assessment about whether you get better value out of the lawyer charging $500 per hour compared to the lawyer charging $800 per hour?

You can’t.

The ostensibly cheaper lawyer may take twice as long to perform the same task as the more expensive lawyer. The more expensive lawyer may offer valuable insight and experience that the cheaper lawyer does not bring. They may spot the issue that ends the dispute in three months instead of dragging it out for 18.

The problem is, the reverse may hold true. And I have seen it hold true on far too many occasions.

The senior partner billing $950 per hour who delegates everything to a junior associate doing the actual work at $400 per hour, but you’re still being charged the senior rate for “supervision”? That’s not value. That’s a billing structure designed to maximise revenue, not outcomes.

Therefore, price alone is a particularly poor indicator of value.

Obviously, result and price are not irrelevant. They are important, and they feed into the question of value. The point is, alone, they are poor measures of value. Alone, they do not allow a client to determine whether they are getting good value for their litigation spend.

Key Point

If you’re measuring litigation value only by hourly rate or win/loss, you’re flying blind. The $300,000 “win” that should have cost $150,000 is a loss.

How Australian Courts Measure Proportionality (And Why You Should Too)

Australian courts don’t just let parties spend whatever they want and then argue about it later. The system actively pushes for proportionality.

Under the Uniform Civil Procedure Rules (NSW, and equivalents in Victoria, Queensland, and other states), courts assess whether litigation conduct justifies the costs claimed. If you over-litigate, if you pursue unnecessary interlocutory applications, if you engage in scorched-earth discovery when targeted requests would suffice, you risk costs penalties.

The most painful penalty? Indemnity costs orders.

Normally, if you win, you recover somewhere between 60% and 70% of your actual legal costs from the losing party. That’s the standard “party-party” basis. You wear the gap.

But if the court finds your opponent’s conduct was unreasonable, or if you rejected a reasonable settlement offer and then failed to beat it at trial, the court can order costs on an indemnity basis. That means close to 100% recovery (or liability, if you’re the one penalised).

The High Court reinforced this in 2024. Courts will not tolerate wasteful litigation tactics. Section 180 of the Corporations Act also looms over directors who approve disproportionate litigation spend: you have a duty to act with care and diligence. Signing off on a $500,000 fight over a $150,000 debt, with no realistic commercial justification, exposes you personally.

Proportionality is not a nice-to-have. It’s a legal expectation, and it directly affects value.

If the courts measure proportionality, why wouldn’t you?

Expert Tip

Before approving major litigation spend, apply the court’s test: is this step proportionate to the amount and issues in dispute? If the answer is no, your lawyer should be explaining why it’s still necessary.

The Five-Element Framework: How Litigation Lawyers Deliver Value

Your lawyer can’t provide value without a framework for focusing on and delivering it. The first step is to ensure your lawyer has that framework.

So what does that framework look like?

In my view, it has five basic elements. These are not theoretical. They are practical, observable, and measurable. If your lawyer cannot demonstrate all five, you are not getting value.

1. Alignment of Interests: Pricing and Incentives Must Match Your Goals

Delivering value must be predicated on some basic alignment of interests. For interests to align, a law firm’s performance and remuneration must be measured in ways that are consistent with a client’s expectations and interests.

Think about it this way: if your law firm measures success by how many billable hours its lawyers record, what behaviour does that reward? Long emails. Unnecessary conference calls. Over-researching simple questions. Gold-plating submissions.

Now imagine the firm rewards responsiveness, efficiency, and early resolution. The behaviour changes.

For example, if we assume responsiveness to be a key driver of client satisfaction, then a law firm should value responsiveness by measuring and rewarding its lawyers for being responsive. If it doesn’t, the incentive structure is broken.

Further, it should be obvious that a pricing model that can reward unnecessary and inefficient work is obviously inconsistent with an alignment of interests. Hourly billing, in its purest form, rewards inefficiency. The longer the matter drags on, the more the firm earns.

Does that mean hourly billing is always bad? No. But it does mean you need safeguards: budgets, caps, milestone reviews, and a lawyer who will tell you when to stop spending.

Alternative fee arrangements (AFAs) are one response. Fixed fees, capped fees, staged fees, success-based fees, the models vary, but the principle is the same: tie price to outcomes, not hours.

Data from 2025-2026 shows 84% of law firms now offer AFAs in some form, with flat-fee usage up 34% over three years. General counsel are demanding it. Why? Because a fixed fee forces the lawyer to manage efficiency. If they waste time, they wear the cost, not you.

Finally, to deliver real value there should be an obvious relationship between the value of the objectives and probable outcomes to the price. One important way of measuring value is to ensure that the ultimate price is proportionate to the issues and amount in dispute.

If you’re spending $300,000 to recover $200,000, the pricing model is not aligned with your interests. Unless there is a clear strategic reason, protecting a critical precedent, deterring future claims, satisfying a regulatory obligation, the spend is not proportionate.

Your lawyer should be able to explain, upfront, why the price makes sense relative to the likely outcomes. If they can’t, or won’t, that’s a warning sign.

Key Point

Hourly billing is not inherently bad, but it is inherently misaligned unless paired with caps, budgets, and a lawyer willing to tell you when to stop. Insist on pricing that ties rewards to outcomes, not hours.

2. Focus on Outcomes: Every Step Must Be Purposively Directed to Resolution

Delivering value is ultimately about taking only the steps that are necessary to resolve a dispute. That requires a mindset and processes that allow each step to be purposively directed to resolution.

The dispute resolution process should not feel like you are strapped into an interminable, archaic, and expensive ride where the outcome is completely unpredictable.

But that’s exactly what it feels like for many clients.

The litigation lawyer adds value by understanding a client’s objectives and agreeing to clearly defined and achievable outcomes. They then explain how each step in the process is helping to reach those outcomes and why that step should be favoured over other considered alternatives.

Let me put that in practical terms. Your lawyer should be able to answer, for every significant step:

  • What is this step designed to achieve?
  • Why is it necessary now?
  • What is the alternative, and why is this better?
  • What does it cost, and is that proportionate to the benefit?

If your lawyer cannot answer those four questions clearly, they are not managing the case with an outcome focus. They are managing it procedurally, which is how costs blow out.

The hardest and often the most important decision in litigation is not necessarily whether to start the process, but whether to continue. There is little value in being locked into a slavish adherence to process.

I have seen cases where the best decision, six months in, was to stop. The facts changed. The costs mounted. The opponent made a reasonable offer. The commercial context shifted.

A lawyer focused on outcomes will tell you when to stop. A lawyer focused on process will tell you the next step is discovery.

One is adding value. The other is adding cost.

Outcome focus also means understanding the economics of settlement versus trial. If you have a 60% chance of winning $500,000, but it will cost $150,000 to get to trial, the expected value of proceeding is $300,000 minus $150,000 = $150,000. If your opponent offers $200,000 to settle today, the math says take it.

Of course, litigation is not purely mathematical. Reputational risk, precedent value, and deterrence all matter. But a lawyer focused on outcomes will frame those non-financial factors clearly, so you can make an informed decision.

Expert Tip

At every major case milestone, after pleadings close, after discovery, before trial, ask your lawyer: “What would it take to settle this now, and is that better than continuing?” If they dismiss the question, they’re not focused on outcomes.

3. Your Dispute, Your Objectives: The Lawyer Must Be Empathetic and Responsive

Value is about finding the most effective way to meet your realistic objectives. They must be your objectives. They must be realistic. And you need a lawyer who will be empathetic and responsive to your needs and concerns.

This sounds obvious, but it is surprisingly rare in practice.

Too many litigation lawyers impose their own objectives on the client. They want to run the “perfect” case. They want to win on every interlocutory skirmish. They want to set precedents. They want to impress the judge.

None of that matters if it does not serve your objectives.

To deliver value, a lawyer must therefore have an approach and clear processes to ensure that they listen to and understand your objectives, they help guide, test, and engage with you on agreeing to realistic and achievable objectives, and they are responsive to your needs and concerns.

What does “realistic and achievable objectives” mean?

It means your lawyer should test your assumptions. If you say, “I want to bankrupt them”, your lawyer should ask: “Is that commercially smart? What does that achieve? What are the risks?” If you say, “I want my day in court”, your lawyer should ask: “What outcome does that deliver that settlement would not?”

This is not about discouraging you. It is about ensuring your objectives are grounded in the reality of what litigation can and cannot deliver.

Responsiveness is also non-negotiable. At a minimum, there should be a clear (and reasonable) expectation about when your lawyer will respond to your questions or concerns, and you should measure performance by whether your lawyer meets that expectation.

If your lawyer takes four days to respond to a straightforward email, or leaves you in the dark for weeks between updates, that is not responsive service. That is a culture problem, and it erodes value.

Equally, your lawyer should not be just reactive. There should be clear expectations about when and how you are informed about the progress of your dispute, and you should measure performance by whether your lawyer meets that expectation.

Proactive communication might look like this:

  • A monthly case update email summarising what happened, what is next, and any decisions you need to make
  • A heads-up call before a court date to explain what to expect
  • A “here’s what we learned from discovery, and here’s how it changes our strategy” debrief

Reactive communication looks like this:

  • Silence until you chase them
  • Vague reassurances (“it’s all going fine”) with no detail
  • Surprises in court

One builds trust and delivers value. The other destroys both.

Key Point

If your lawyer cannot articulate your objectives back to you in one paragraph, and explain how the current strategy serves those objectives, they do not understand your case. That is a value problem, not a communication problem.

4. Effective Execution: Project Management and Rigorous Planning

One cannot deliver value without a demonstrable framework and method for ensuring every task is directed at achieving the agreed objectives and is planned and executed in the most efficient and effective way.

Litigation is a project. It has defined stages, deadlines, resource requirements, and deliverables. Yet most law firms do not manage it like a project. They manage it like a series of reactive tasks.

To deliver better value, your lawyer must have an ability to plan for and manage a litigation project in a way that prioritises outcomes and effectiveness. Your lawyer must have a proven method to apply project management principles and processes.

What does that look like in practice?

It means:

  • A clear case plan at the outset, with milestones, budgets, and decision points mapped out
  • Resource allocation that matches tasks to the right level of lawyer (a paralegal can manage document review; a partner should not be doing it at $900 per hour)
  • Regular budget tracking and variance reporting, so you know if costs are blowing out before it is too late
  • Risk registers that identify the key factual and legal uncertainties, and a plan for how to resolve them early (not at trial)
  • Use of technology to reduce costs: e-discovery platforms, case management software, automated document review

Effective execution also means avoiding duplication and waste. If three lawyers attend a two-hour conference when one would suffice, that is six hours of wasted time. If your barrister and solicitor both prepare overlapping written submissions, that is duplication. If your lawyer re-researches a question they researched on a previous case, that is inefficiency.

You should not be paying for your lawyer to learn on the job, to duplicate effort, or to do work that could be done faster and cheaper with the right tools or processes.

One of the biggest drivers of wasted spend is poor early case assessment. If your lawyer does not rigorously analyse the merits, evidence, and cost-benefit equation at the start, you will spend months (and hundreds of thousands of dollars) heading in the wrong direction.

The most valuable work in litigation often happens in the first 30 days: understanding the facts, identifying the issues that will decide the case, pressure-testing the merits, and exploring settlement. If your lawyer rushes through that phase to “get the claim filed”, they are not managing the project effectively.

Expert Tip

Ask your lawyer for a case plan at the outset. It should include milestones, budget estimates for each phase, and decision points where you will reassess whether to continue. If they cannot provide one, they are not managing the case as a project.

5. Objective Advice: Your Lawyer Must Tell You What You Need to Hear, Not What You Want to Hear

If your lawyer is just your cheerleader, you will not be receiving value. You will fail to properly assess risk, you will incur costs unnecessarily, and you will miss opportunities to negotiate timely, favourable outcomes.

Resolving disputes effectively requires a thoughtful and realistic assessment of risk, an assessment that necessarily involves being able to be honest and critical about a client’s conduct and expectations.

In litigation, that realistic assessment can only be delivered by a lawyer who maintains and values objectivity and sees independence and objectivity as being critical to serving a client’s best interests.

Let me be blunt: you do not need a lawyer who tells you that you are right, you are going to win, and the other side is evil. You need a lawyer who tells you where your case is weak, what a judge might think of your conduct, and what the realistic range of outcomes is.

Objectivity does not weaken an ability to forcefully advocate for a client. On the contrary, it makes that advocacy more powerful and persuasive. The lawyer who understands the weaknesses in their case is the lawyer who can address them head-on, neutralise them, and focus the court’s attention on the strengths.

The cheerleader lawyer cannot do that, because they have not done the hard work of realistic risk assessment.

Objective advice means your lawyer will:

  • Tell you when your case is weak, and why
  • Explain what the other side’s best arguments are, and how strong they are
  • Identify the facts or conduct that hurt your case, even if it is uncomfortable
  • Give you a realistic settlement range, not an inflated best-case scenario
  • Advise you to settle, or to stop, when that is the smart decision, even if it means less fees for them

If your lawyer has never told you something you did not want to hear, they are not being objective. They are being compliant.

And compliant lawyers cost you money.

I have seen cases where a client was convinced they would win, their lawyer never challenged that view, and they lost comprehensively at trial. The costs award was in the hundreds of thousands. The lawyer collected their fees. The client was left with a judgment debt and a bill.

That is not advocacy. That is malpractice by omission.

Key Point

The best litigation lawyers are the ones who tell you the hard truths early, not the ones who make you feel good. If your lawyer has never recommended against proceeding, they are not being objective.

Red Flags: Warning Signs You Are Not Getting Value

How do you know if your current lawyer is failing to deliver value? Here are the warning signs.

Vague or Inconsistent Communication

If your lawyer cannot explain the strategy, the next steps, or the likely costs in clear language, that is a red flag. If updates are vague (“things are progressing”), or inconsistent (radio silence for weeks, then a flurry of emails), you are not getting value.

No Clear Plan or Budget

If your lawyer cannot provide a case plan with milestones and a budget estimate for each phase, they are not managing the case effectively. If costs are blowing out with no explanation or early warning, that is a failure of project management.

Every Step Feels Reactive

If it feels like you are lurching from one procedural step to the next, with no overarching strategy or purpose, your lawyer is not focused on outcomes. They are focused on process.

Settlement Is Never Discussed

If your lawyer never raises settlement, or dismisses it out of hand without analysis, that is a red flag. Every case should have regular settlement assessments, especially after key evidence emerges.

You Are Paying for Duplication or Junior Lawyers Doing Senior Work

If your invoices show multiple lawyers attending routine hearings, or junior lawyers doing work that is then “reviewed” (and re-billed) by seniors, you are paying for inefficiency.

Your Lawyer Has Never Told You No

If your lawyer agrees to every request, never pushes back on unrealistic objectives, and never advises against a particular step, they are not being objective. They are being a service provider, not a strategic adviser.

You Do Not Understand Why Each Step Is Necessary

If you cannot explain to your board or your CEO why a particular step is happening, and what it is designed to achieve, your lawyer has failed to communicate. And that lack of clarity is costing you money.

Expert Tip

At every invoice, ask yourself: “Do I understand what this work achieved, and why it was necessary?” If the answer is no, that is a value problem. Raise it with your lawyer immediately.

How to Value a Case: The Expected Value Model

One of the simplest and most powerful tools for assessing litigation value is the expected value (EV) model. It is widely used by in-house legal teams and sophisticated litigants to decide whether to proceed, settle, or walk away.

Here is how it works.

Expected value = (Damages you might recover x Probability of success) – (Your costs to get there)

Example:

  • You are claiming $500,000 in contract damages
  • Your lawyer assesses your chance of success at 60%
  • Your costs to trial are estimated at $150,000

Expected value = ($500,000 x 0.6) – $150,000 = $300,000 – $150,000 = $150,000

That means, on a purely rational basis, the case is worth proceeding with if your goal is financial recovery. But if your opponent offers $200,000 to settle today, the math says you should take it, because $200,000 now is better than an expected value of $150,000 after a trial (which also carries risk, stress, and time).

Of course, litigation is not purely mathematical. You might proceed even if the EV is lower, because:

  • The case sets an important precedent
  • You need to deter future claims
  • Reputation or principle matters
  • Regulatory obligations require you to defend

But the EV model gives you a rational baseline. It forces you to quantify risk and make a conscious decision about whether non-financial factors justify the spend.

If your lawyer is not walking you through some version of this analysis, they are not helping you assess value.

Expert Tip

Run the EV calculation at the start of the case, after discovery, and before trial. As facts and costs change, so does the value. Be willing to reassess and change course.

Alternative Fee Arrangements: Aligning Price with Value

Hourly billing is still the dominant model in Australian litigation, but it is not the only model. Alternative fee arrangements (AFAs) are increasingly common, especially for clients demanding cost certainty and better alignment of interests.

Common AFAs in litigation include:

Fixed Fees

You pay a set amount for a defined scope of work (e.g., $50,000 to draft and file pleadings, $120,000 to run the trial). The lawyer wears the risk if the work takes longer than expected.

This works well for predictable stages (pleadings, applications, hearings) but less well for discovery or trial, where variables multiply.

Capped Fees

Hourly billing up to a cap (e.g., $200,000 maximum). You get cost certainty, and the lawyer has an incentive to stay efficient.

Staged Fees

Fixed or capped fees for each stage of the litigation (pleadings, discovery, trial prep, trial). This allows flexibility while maintaining some cost certainty.

Success-Based Fees

The lawyer’s fee is tied to the outcome (common in class actions and plaintiff-side work, often combined with litigation funding). In Australia, “no win, no fee” arrangements are allowed, but uplift fees are capped (usually up to 25% above standard fees).

Hybrid Models

A reduced hourly rate plus a success bonus, or a fixed base fee plus additional fees tied to milestones or outcomes.

Data from 2025-2026 shows that 84% of law firms now offer AFAs, and usage is climbing. General counsel report that flat-fee arrangements have increased 34% in the last three years, driven by pressure to control costs amid flat or shrinking budgets.

The benefit of AFAs is alignment: the lawyer has a financial incentive to be efficient, to resolve the case early if that is the smart move, and to avoid unnecessary work.

The downside is that some lawyers price AFAs conservatively (loading in risk buffers), so you may pay more than you would have under hourly billing if the case settles early. Negotiation and transparency are critical.

Key Point

If your lawyer refuses to discuss AFAs, or insists hourly billing is the only option, ask why. The best firms offer flexibility because they are confident in their efficiency and outcomes.

Director and General Counsel Duties: The Personal Risk of Poor Litigation Decisions

If you are a director or general counsel approving litigation spend, you carry personal legal obligations. You cannot delegate these away.

Under section 180 of the Corporations Act, directors must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise in the same position. That includes litigation decisions.

If you approve disproportionate, wasteful, or meritless litigation, you risk:

  • Breach of director duties (s 180)
  • Personal liability if the company becomes insolvent and the litigation spend contributed to that insolvency (insolvent trading under s 588G)
  • Shareholder derivative actions or oppression claims if the litigation harmed shareholder interests

For general counsel, the risk is reputational and professional: if you approve spend that a reasonable GC would not, and the board or CEO later questions it, your judgment is under scrutiny.

What does “reasonable” litigation spend look like?

Courts and regulators look for:

  • Proportionality: is the spend proportionate to the amount and issues in dispute?
  • Merits: is there a reasonable basis for the claim or defence?
  • Process: did you get proper legal advice, assess risk, and consider alternatives (including settlement)?
  • Transparency: did you inform the board or senior management, and document the decision?

If you can demonstrate all of that, you have discharged your duty. If you cannot, you are exposed.

This is why objective legal advice matters. If your lawyer tells you the case is strong, and you rely on that advice in good faith, you have a defence. If your lawyer is a cheerleader who never challenged your assumptions, and the case collapses, both you and the lawyer are in trouble.

Expert Tip

Keep a litigation decision log. Document why you approved each major spend, what advice you received, what alternatives you considered, and why you proceeded. If questioned later, that contemporaneous record is your best protection.

Cost Recovery in Australia: What You Will Actually Get Back

One of the biggest misconceptions in litigation is that “if I win, the other side pays my legal costs”.

That is true, but only partially.

In Australia, costs generally follow the event: if you win, the court orders the losing party to pay your costs. But “costs” does not mean 100% of your actual legal bill.

Party-Party Costs (Standard Basis)

On the standard basis, you recover approximately 60-70% of your actual costs. The gap exists because some work is considered unnecessary, excessive, or not recoverable under the court rules.

For example:

  • Your actual legal bill: $300,000
  • Costs recovered on a party-party basis: $180,000 to $210,000
  • You wear the gap: $90,000 to $120,000

Even if you win.

Indemnity Costs

If the court finds the losing party’s conduct was unreasonable, for example, they rejected a reasonable settlement offer and then failed to beat it at trial, or they engaged in vexatious or oppressive litigation tactics, the court can order indemnity costs.

Indemnity costs are close to 100% recovery. The gap shrinks significantly.

This is why Calderbank offers (formal settlement offers under the Uniform Civil Procedure Rules) are so important. If you make a reasonable offer, the other side rejects it, and you then achieve a better result at trial, you can apply for indemnity costs from the date of the offer.

The 2024 High Court decision in a costs dispute reinforced that courts will not tolerate unreasonable rejection of settlement offers. Indemnity costs are a real risk, and they change the value equation dramatically.

Security for Costs

If you are a plaintiff, and the defendant applies for security for costs (an order requiring you to pay money into court to cover their costs if you lose), that is a significant cash flow issue. It is also a warning sign: the defendant is signalling they think your case is weak.

Impecunious plaintiffs, foreign plaintiffs, and corporate plaintiffs with limited assets are common targets for security for costs applications.

If you face one, the value equation changes. You may need to fund security upfront, in addition to your own legal costs, just to continue.

Key Point

Never assume you will recover 100% of your legal costs, even if you win. Budget for a 30-40% gap, and factor that into your settlement assessments.

Litigation Funding: Shifting Risk (and Value)

Litigation funding is increasingly common in Australia, especially in class actions, shareholder disputes, and commercial claims where the plaintiff cannot (or does not want to) fund the litigation themselves.

A litigation funder agrees to pay your legal costs in exchange for a share of any recovery (typically 20-40% of the settlement or judgment, plus reimbursement of costs).

The benefit: you shift the financial risk to the funder. If you lose, you do not pay the funder back (though you may still face an adverse costs order from the other side, which the funder may or may not cover).

The cost: if you win, you give up a significant portion of the recovery.

Is that good value?

It depends. If you would not have been able to pursue the claim at all without funding, then yes, 60-80% of something is better than 100% of nothing. If you could have funded it yourself, then you are paying a premium for risk transfer.

Litigation funding is regulated under the Corporations Act (section 553C and related provisions), and the Federal Court has issued Practice Note GPN-FUND setting out transparency and disclosure requirements. Funders must be licensed, and funding agreements must be disclosed to the court in certain cases.

The key value question: does the risk transfer justify the cost?

If you are a well-capitalised company with the resources to fund the litigation, funding may not make sense. If you are a startup, an individual, or a company with cash flow constraints, funding can be a valuable tool.

Expert Tip

If you are considering litigation funding, negotiate the terms hard. Funders have room to move on their percentage share, especially in strong cases. And ensure the funder will cover adverse costs orders if you lose, not just your own legal fees.

Technology and Spend Tracking: Visibility Drives Value

One of the fastest-growing areas in litigation management is technology for spend tracking and case analytics. General counsel and clients increasingly demand real-time visibility into what they are spending, what they are getting, and whether it is on track.

Tools like e-billing platforms, case management software, and AI-driven analytics allow clients to:

  • Track spend in real time, by lawyer, by task, by stage
  • Compare actual spend against budgets and flag variances early
  • Benchmark costs against similar cases or industry averages
  • Identify inefficiencies (e.g., excessive time on routine tasks, duplication across lawyers)

If your law firm cannot provide this level of transparency, or resists using technology to track and report spend, that is a warning sign. The best firms embrace transparency because they are confident in their efficiency.

AI is also starting to play a role in document review, legal research, and case prediction. While AI cannot replace lawyers, it can reduce the time (and cost) required for routine tasks. A law firm that uses AI to automate document review and passes the savings on to you is delivering value. A law firm that ignores technology and keeps billing for manual work is not.

Key Point

Insist on detailed, itemised invoices with task descriptions, not block billing or vague entries like “review documents: 6.5 hours”. Transparency is a precondition for assessing value.

When to Change Lawyers: The Hardest Decision

One of the most difficult decisions in litigation is whether to change lawyers mid-case. There is a natural reluctance: the new lawyer will need time to get up to speed, there may be cost and delay, and you may feel loyalty to the current lawyer.

But if your current lawyer is not delivering value, the cost of staying is higher than the cost of switching.

When should you seriously consider changing lawyers?

  • If they cannot clearly articulate the strategy, the next steps, or the likely costs
  • If costs are blowing out with no explanation or accountability
  • If they are not responsive, proactive, or transparent
  • If they have never recommended settlement or reassessed the case
  • If you have lost trust in their judgment or objectivity
  • If the case is not progressing, and there is no clear reason why

Changing lawyers mid-case is not uncommon. Courts allow it (though you may need the court’s permission in some cases, and you will need to deal with any liens the outgoing lawyer has over your file for unpaid fees).

The key is to do it strategically: at a natural break point (after pleadings close, after discovery, before trial), not in the middle of a critical hearing or urgent application.

And be clear with the new lawyer about what went wrong with the old one, so they can avoid the same mistakes.

Expert Tip

Before you change lawyers, have a direct conversation with your current lawyer about your concerns. Give them a chance to fix it. If they do not, or cannot, then make the change.

Conclusion: Value Comes from Clarity, Alignment, and Accountability

Every client should be concerned with getting value from their litigation spend. The stakes are too high, and the costs too significant, to accept anything less.

To ensure you are getting value, you should first look to ensure your lawyer has a framework for focusing on value: alignment of interests, outcome focus, responsiveness to your objectives, effective execution, and objective advice.

Secondly, have a series of objective measures to assess performance: Are they meeting their communication commitments? Are they staying on budget? Are they explaining each step and its purpose? Are they reassessing settlement regularly? Are they telling you the hard truths?

Finally, be willing to compare and change lawyers. Loyalty is admirable, but not at the expense of value. The right lawyer will welcome scrutiny, provide transparency, and earn your trust through performance.

Litigation is complex, yes. But the pathway shouldn’t be a mystery. The costs shouldn’t be a surprise. And the value should be measurable.

If it is not, you are not getting what you are paying for.

To discuss ways to develop your own organisational framework for measuring value, or to learn how Aptum delivers value through specialist expertise, outcome focus, and transparent client partnership, contact us today.


General Disclaimer: This article provides general information only and does not constitute legal advice. Every dispute is different, and you should seek specific advice tailored to your circumstances before making litigation decisions.

About the AuthorNigel
Nigel Evans – one of our founding directors – came to Aptum with 11 years experience at the Victorian Bar. Since founding Aptum, he has become the strategic and commercial core of our practice. This has seen Nigel consistently named as a Leading Commercial Litigation and Dispute Resolution Lawyer by Doyles Guide, included in the Best Lawyers in Australia for Tax Law, and named as a Finalist for Litigation Partner of the Year at the Partner of the Year Awards. Having been at the forefront of complex commercial litigation, Nigel has seen firsthand how client outcomes are all too often... read more

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