From the business person’s perspective, litigation can seem like a confusing, time-consuming and (unnecessarily) costly drain on the bottom line. Getting an insider’s view of litigation’s key elements not only puts the costs and value of litigation in context, but it also reveals how to use litigation as a tool to meet—and even reach—goals tied to that bottom line.

The lawsuit will cost money.

Litigation is not cheap. You’ll need lawyers who are skilled in handling litigation matters, and you’ll need to begin conducting discovery unless you can get the case dismissed very early on. During discovery, each side asks the other for information and documents including all sorts of electronically stored information (ESI). The cost of preserving, collecting, processing and reviewing documents and ESI can account for a significant portion of the legal bills. In addition, there’s also the cost of taking depositions, paying for flights across the country and possibly hiring experts to help prove your case.

With increasing frequency, law firms have developed budgeting tools and in-house e-discovery practices to drive client value. Still, some litigation expenses just remain a given. Whether you are being sued or bringing a lawsuit, it’s important to remember that the filing of the complaint or answer will inevitably trigger a series of costly obligations and deadlines that you will be legally required to meet. Thus, the early stages of the lawsuit are often the most critical when weighing the benefits of settlement.

It will take up your time and your team’s time.

Regardless of whether you are the plaintiff or the defendant, litigation will take time. Even if your company has an in-house legal department, there will be times that outside counsel will need to meet with the business people to:

• Understand the facts of the case
• Obtain accurate information for discovery responses
• Determine where potentially responsive documents might be
• Follow up for more information as the discovery process proceeds and the legal arguments evolve on both sides.

Unless the case is resolved, you and likely members of your team will have to sit for depositions. Deposition preparation will usually take a full day but can vary from a few hours to a couple of days in more complex matters. The deposition is likely to last an entire day as well. Read about what business people need to know about depositions here.

You may have to disclose confidential information.

Part of the discovery process requires disclosure of confidential, sometimes highly sensitive information, including business plans, pricing and other proprietary information. In response to these concerns, the parties will ask the court to enter a protective order, which restricts the use of such information. For instance, it can only be used for the purposes of the litigation and can only be shown to certain people. If the case is between competitors, the protective order will usually have a provision that allows only the other side’s outside attorneys to view it.

But more and more courts are construing confidential information very narrowly. If the information is a few years old, it might not be considered confidential in the court’s eyes. Even if it can be construed as confidential, if the case goes to trial, everything is usually open to the public, and it might be hard to maintain confidentiality at that point.