Walk softly and carry a big stick. Trust but verify. Never bring a knife to a gunfight.

People who know me, have read my blog regularly, heard me speak on ERISA issues, or been on a jury in a case I have tried, know that I am very fond of analogies, metaphors, short examples, and good stories. To me, they are like the old saying that a picture is worth a thousand words – they boil down complex ideas that I am trying to communicate to judges, fact finders, witnesses, clients, readers, and anyone else in a way that makes the idea easier to grasp. For experienced courtroom lawyers, this is a significant tactical concern: how do you take decades of experience and knowledge on a particular topic and communicate it, quickly and succinctly, to a judge who may be a generalist and may have only seen the particular issue a few times, or to jury members who have never heard of the issue before. You don’t have time to teach a seminar on it, and stories, analogies and examples are the tools that let you explain the issue both accurately and quickly.

The three sayings (or possibly cliches at this point) with which I opened this post are all meant to capture the value and importance to plan sponsors and fiduciaries of relying in the current world order on an experienced courtroom advocate, preferably a trial lawyer and if at all possible, one with deep knowledge of ERISA. When I say this, I don’t mean just calling one when a dispute arises or service of a complaint is received, but instead relying on one in the day in, day out course of running a plan.

As some of you know, I have begun a new series of posts on this blog, captured in a new category topic, called Plan Sponsor and Fiduciary 2.0. The idea behind the series is that developments in running an ERISA governed plan have, at this point, come so fast and furious that it no longer makes any sense for sponsors and fiduciaries to continue to operate just as they did in the olden days, such as a few years ago. We have learned too many lessons about risks and liabilities in offering plans, and are watching too many things change, to not update the best practices for plan sponsors and fiduciaries.

In my most recent, and first, post on this topic, I discussed the need for plan sponsors and fiduciaries to start paying far closer attention to their contracts with vendors. Today, I want to talk about the importance for plan sponsors and fiduciaries of having a veteran ERISA litigator watching their backs.

And why do they need that, now more than ever? Because the ever-expanding range of risks that plan sponsors and fiduciaries are facing, and the rapidly evolving decisions they have to make, call for a litigator’s advice, and preferably not any litigator, but one with both significant courtroom experience and deep substantive knowledge of ERISA.

There are many reasons for this, all rooted in the realpolitik of running a plan in the current economic, regulatory and litigation environments, but today I will give you three examples that should be sufficient to make the point.

The first concerns the effort to open up 401(k) plans to private equity assets. I guarantee you there isn’t a fiduciary of any defined contribution plan of any size at this point who isn’t being bombarded with pressure to open up the plan to private equity investments. If they are not getting it directly already from vendors or some participants, they are hearing about it internally from other company executives or they are seeing it constantly in the media. But there is a great deal of homework that plan fiduciaries are going to have to do before they can safely greenlight opening up their plans to private equity investments, and part of that involves thinking critically about the investment option at the center of current efforts to add private equity investments to plans –target date funds.

The idea, I think obviously, is that including private equity investments within the overall mix captured within such a fund solves the liquidity problem in opening up plans to such investments, and will likely give some room for arguing that the accompanying fees are reasonable, when considered in the context of the overall mix of costs and investments in such a fund.

But a trial lawyer who knows his or her way around ERISA will tell you right off the bat that this idea may be good for those selling private equity investments to plans, but it is going to be a terrible look for plan fiduciaries caught in the crosshairs of a breach of fiduciary duty class action alleging that a plan’s performance was too volatile or, over time, too poor because one part of the fund’s investment mix consisted of private equity holdings. Plan fiduciaries and sponsors should assume that, unless somehow no fund holding such assets ever underperforms, class actions making such claims will be the inevitable outcome of adding private equity into plans, including within the confines of target date funds.

And when that happens, plaintiffs’ counsel, in his opening at trial, is going to characterize the inclusion of private equity assets in target date funds not as having been a way to solve technical ERISA problems of liquidity and expenses, but as a way to hide private equity investments with volatility, risk and expense problems from participants. And that is going to be a very poor way to start a trial, if you are a plan sponsor or plan fiduciary, particularly if insurance isn’t going to cover every penny of any settlement during trial or of a potential verdict.

An experienced trial lawyer, particularly and maybe only one who knows his or her way around ERISA, is the one who can see down the road to that day when the class action lawyers come knocking at the door about the decision to include in the plan target date funds with private equity assets in them, and is almost certainly the only one who can tell a plan fiduciary in advance just how poorly that is likely to play in a courtroom at trial. I am not saying plan sponsors or fiduciaries cannot properly decide to include such assets in a plan, but they aren’t doing it with full knowledge and awareness if they haven’t – before making that decision – sought out the advice of a veteran ERISA litigator who can predict some of the future for them.

Here’s a second example of why a plan fiduciary or sponsor needs a sharp ERISA litigator in the tool kit at all times these days. I have long been an advocate of plan sponsors, fiduciaries, insurers and the ERISA defense bar taking more breach of fiduciary duty cases, particularly class actions, to trial. The record, as more (although only a few) are tried, is proving the worth of this advice. For instance, here is a nice write up from Kantor & Kantor on a very recent trial win for plan fiduciaries on a breach of fiduciary duty case. What’s particularly noteworthy about it is that the court found that the case was not black and white, but instead shades of gray, as to whether a breach had occurred, meaning that it was almost certainly never a clear and obvious choice for the defendants to try the action. Anyone can and will try a case when the evidence for the defense is flawless, but it’s a different calculus all together when you have to steel your nerves to make that choice with a debatable defense case.

I have little doubt, particularly as the class action ERISA bar turns its sights increasingly on high value targets in the health and welfare space, using ever more novel theories, that taking cases to trial will become more and more the right call. But the issue with doing so is that plan sponsors and fiduciaries have to take the right cases to trial, and a lot goes into evaluating whether to try any one, particular case. It would take pages to list those types of considerations, and I won’t do it here.

But at the end of the day, only someone who has tried enough cases to understand the subtleties of trial, and of how particular pieces of evidence or particular witnesses will be viewed by the bench or a jury, can be counted on to make a good call on whether to take a particular case to trial. And in the context of ERISA cases, that almost certainly also requires a veteran courtroom lawyer who, in addition, knows enough about ERISA to make the right tactical calls in this regard.

The third reason for keeping an experienced ERISA litigator close at hand rests in the subtext of the Supreme Court’s recent decision in Cunningham v. Cornell. Much of what someone else called the ERISA commentariat has coalesced around the idea that the Court through that case should, but did not, have made it harder for the class action bar to bring excessive fee cases. The Court certainly did not do so in its decision. But the Court clearly, at the same time, sent the message that, with regard to the plan sponsor, plan fiduciary and defense bar community, it is time for the doctors to heal themselves – in other words, for the ERISA defense bar to stop seeking some sort of deus ex machina event where the Court puts an end to excessive class action litigation against plans in one fell swoop, and to instead start using all the tools of the federal rules and courts to push back against cases that overreach on their facts or their theories.

All the tools necessary to do so are already there, resting in a court’s power to control the cases before it, in bifurcation orders, in the discovery rules, in Daubert and in a dozen other places. But only an experienced ERISA litigator is going to be able to tell a plan sponsor or fiduciary how to use them to do that, and in what cases.

So at the end of the day, what is the lesson, in these modern and risky times, for plan sponsors and fiduciaries about ERISA litigators and trial lawyers? Very simple – don’t leave home without one.