The Market for Leadership in Corporate Litigation

Abstract

Conventional wisdom has long held that leadership decisions in corporate litigation are best left to the lawyers. Even as the world of corporate litigation has changed dramatically, courts have consistently relied on the lawyers themselves to decide who among them will control litigation decisions. As a result, leadership decisions in corporate litigation are almost always made in private negotiations and back-room deals. This Article pulls back the curtain on these decisions, using empirical data to conduct the first in-depth examination into the market for leadership in corporate litigation. This examination reveals a market that bears little resemblance to the ideal imagined by courts and commentators. The reliance on private ordering forces lawyers to agree to overly complicated leadership structures. These structures in turn cause lawyers to underinvest in litigation, encouraging hold-outs and opportunism at the negotiating table. It need not be this way. Other types of complex litigation, from small-scale consumer class actions to multi-district securities class actions, have successfully avoided such problems. The time has come for corporate law to draw on these insights and develop a new market for leadership in corporate litigation. In the end, leadership is far too important to be left to the lawyers.