Article

Effective Litigation & Second-Level Thinking

Jun 24, 2021
Texas Lawyer

A second-level thinker in effective litigation has the discipline to act prudently as the client’s adviser and advise the client with specificity on the risks the client faces in the present and the potential risk the client may face in the future as a result of this dispute.

Effective dispute resolution is the cornerstone of effective litigation. But to effectively litigate, a litigator must possess a thought process that allows for in-depth thinking and somewhat of a contrarian mindset to effectively solve their client’s dispute. This thought process has to incorporate not just the legal ramifications of the dispute, but must also include how the dispute will affect the client’s business today and in the future. Focusing on the legal standards and binding authority relative to the client’s dispute is not enough to effectively and efficiently resolve the client’s issues. Instead, it requires a deeper level of thinking.

In the investing world, famous investor Howard Marks calls it “second-level thinking.” He describes second-level thinking as “the ability to see around the corner.” He further describes a second-level thinker as one who goes through a much more complex process when thinking about an asset, rather than simply observing what’s on the surface. In his book The Most Important Thing, Marks says, “first-level thinking says, 'it’s a good company; let’s buy the stock.' Second-level thinking says, 'it’s a good company, but everyone thinks it’s a great company and it’s not. So the stock is overrated and overpriced; let’s sell.'”

Similar to effective litigation, the dispute itself is just the surface. There is a strong possibility that the dispute could affect the commercial client’s supply chain, its business operations, its ability to acquire other business, and the list can go on. A first-level thinker says, there was no duty so the negligence claim will be dismissed and the client won’t have to worry about this anymore. A second-level thinker says, there are valid grounds for dismissal, however, how did this dispute come about? What part of the client’s business did this affect? What resources does the client have—if any—that can effectively be implemented to prevent such an issue from arising again? Second-level thinking in effective litigation is the ability to—to the best of one’s ability—solve the present dispute while “seeing around the corner” and predicting how the present dispute could potentially affect the client’s business in the future. Furthermore, a second-level thinker in effective litigation has the discipline to act prudently as the client’s adviser and advise the client with specificity on the risks the client faces in the present and the potential risk the client may face in the future as a result of this dispute.

Effective litigation is a subjective practice. Some litigators think that quickly getting rid of a lawsuit is effective, or advising their client not to go to trial and settling on the courthouse steps is effective. Many litigators use the “zealous advocacy” approach, which encompasses numerous aggressive tactics and poses them as effective litigation. These are features in which effective litigation can be practiced, however, the practice itself is more than dismissing a claim, settling a lawsuit, or bombarding the adverse party with loads of discovery.

As a second-level thinker, an effective litigator must advise their client on the costly endeavor of litigation and its potential risks. Advising clients on settlements is effective, however depending on the claim and client, going to trial may be a necessary evil. But the client must be aware that trial is uncertain. There is a high degree of uncertainty when a commercial client is judged by a jury, and the client must be aware of this uncertainty. In Nicholas Taleb’s famous book Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, Nicholas states “When things go our way we reject the lack of certainty.” This befalls some of the best legal minds because if the law and facts are favorable to the client, most would agree that the case is “in the bag.” However this certainty is an illusion and if not met with discipline and second-level thinking, a litigator can overpromise results that potentially may not come to fruition.

An effective litigator is and can be many things. One’s perspective can define an effective litigator. Within that definition, an effective litigator must have, but not be limited to, a stoic mind, a keen sense of the client’s business, a view of how a dispute affects today and how it may potentially affect the client’s business tomorrow, and more importantly the risk associated with the dispute. These traits accompanied by second-level thinking allow for a high probability of effective litigation and a satisfied client.

Ian Shaw is an associate at Munsch Hardt Kopf & Harr, P.C. He can be reached at ishaw@munsch.com.

 

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