f/k/a . . . the archives

May 31, 2003

Is a Legal Fee Ever Too Big?

Filed under: pre-06-2006 — David Giacalone @ 11:11 pm

NYS Justice Charles E. Ramos suggested last year that 625 million dollars (about $13,000 per hour) might be an excessive fee for the six law firms that helped settle the State’s case against the tobacco industry. Overlawyered.com covered this surprising act of judicial bravery last July. The case was in the news again this week, as reported in the New York Law Journal and Law.com on May 28th (free, with a cumbersome registration). On Tuesday, a panel of appellate judges heard arguments, in the case of State of New York v. Philip Morris, as to whether Justice Ramos even has the power to raise the issue of unreasonable fees, especially at this time.


In a world where the ethical ban against excessive contingency fees is almost never enforced by ethics boards or judges (per Cardozo Law Prof. Lester Brickman), this could be a momumental case. But, I’m not getting my hopes up. Nobody in the case supported Justice Ramos, and he had to appoint his own Independent Counsel to defend his position. Even the normally toughminded and consumer-friendly Attorney General, Eliot Spitzer (featured on Sixty Minutes last Sunday for battling Wall Street ripoffs), opposed Justice Ramos strenuously.  Let’s face it, there are immensely powerful interests who want Justice Ramos put in his place.  If the NY 1st Department Appellate Court wants to overturn Justice Ramos, the facts present many procedural reasons that could be used.


Usually, it’s the “little guy’s” legal fees that bother me, not fees awarded to lawyers for sophisticated clients like New York State. This case interests me, however, because the real clients are the residents of the State. Even more important, if $13,000 per hour isn’t enough to warrant a close judicial look or review by an ethics board (long before it got to Justice Ramos), I have to wonder why the legal profession even has a ban on excessive fees. Why not just limit the rule to actually stealing your client’s money or intentionally padding a bill?




  • Two Cents from (the Editor’s alter ego) Jack Cliente: What I wonder is where the elite consumer-lovers are when it comes to preventing scandalously high lawyer fees, which come out of the victims’ hides one way or the other.  Why wasn’t the Ramos story important enough for the New York Times to cover this week?  Have campaign contributions to Democratic politicians, and large donations to liberal nonprofit organizations, neutered all of the consumers’ watchdogs?

May 30, 2003

P/I Lawyers v. Common Good

Filed under: pre-06-2006 — David Giacalone @ 4:37 pm

As reported last Sunday (5/25/03) in a balanced, thorough New York Times article, the social action group Common Good has coordinated petitions in 13 states aimed at reducing contingency fees in situations where an early settlement is reached. (click for the Common Good Press Release about the Petitions, May 6, 2003; and see Miami Herald coverage of the proposal, Jan. 3, 2004) In those cases, they argue, the plaintiff’s attorney neither took a large risk of not being paid nor worked extensive hours. Common Good contends that their proposal will increase victims’ shares of “early offer” settlements, while preventing unethical fees, and without limiting the victims’ ability to press their case. “Most importantly, the change will increase the settlement proceeds going directly to accident victims.”

As is their habit, the plaintiff’s personal injury bar has already geared up its spin machine and tarred the proposal as neoconservative Tort Reform, inspired by big business.  Tort Reform proposals would put limits on certain kinds of recovery by injured victims. The Common Good proposal doesn’t. Both would result in smaller fees (for lawyers on both sides), and that’s the connection, I think, for the trial lawyer bar. See a May 7th article from the Richmond Times-Dispatch; and Daniel Wise’s report of May 6, 2003, for the New York Law Journal.

Although the proposal may need some fine-tuning to assure that the plaintiff is not put at an unfair advantage, I endorse its basic goal and approach. It will keep the client-victim from being victimized again by her own attorney. Because the ethics system currently does nothing to police against excessive windfall fees in p/i cases, the only recourse is a more specific and strictly-enforced rule.  [For a full discussion of why using a locality's "standard" contingency fee -- often one-third, or 40%, or more -- is often unfair to clients and unethical, see our 4-part essay on the Ethics and Economics of Standard Contingency Fees: Part I (Market failures); Part II (risk matters)Part III (do “standard” fees still exist?); and Part IV (ethical duties)]

Two Cents from Jack Cliente: This proposal won’t hurt victims unless p/i lawyers refuse to take an easy case that isn’t likely to make them a lot richer.   It’s Jackpot-JD time again — $400 or $500 an hour isn’t enough of an incentive for some lawyers.
Mr. Editor and I would love to hear what’s happening in the 13 states involved: Alabama, Arizona, California, Colorado, Maryland, Mississippi, New Jersey, New York, Ohio, Oklahoma, Texas, Utah and Virginia, so drop us a line about news coverage and any good insider gossip. [In our posting "UnCommonly Good Advice on Contingency Fee " (June 3, 2003) , we discuss a strategy to avoid the need for the Common Good proposal -- actually enforce the current ethical rules and principles regarding contingency fees.]

May 29, 2003

D for Discipline

Filed under: pre-06-2006 — David Giacalone @ 10:39 pm

I’ve posted my op/ed piece, D for Discipline in the “Essays” folder. Although aimed at the system of lawyer discipline in New York State, the essay describes problems that can be found across the nation, and suggests solutions based on the recommendations of the national legal reform group HALT. The Consumer Federation of America recently endorsed HALT’s proposals, calling for an end to secret hearings and private reprimands, a large increase in the number of nonlawyers on panels, the investigation of all complaints, and the opening up of attorney discipline records.

For a detailed look at each state’s disciplinary problems, see the Lawyer Discipline Report Cards issued in October, 2002, by HALT for all 51 jurisdictions. HALT concluded that the American system is still broken — as an ABA Commission stated in 1992, lawyer discipline is “too slow, too secret, too soft, and too self-regulated.”

May 26, 2003

grand opening soon

Filed under: pre-06-2006 — David Giacalone @ 5:33 pm

There’s a lot to do before this legal ethics and clients’ rights weblog is ready for public viewing, so this will be my only News posting until the “grand opening,” in a few days.

ethicalEsq will focus on efforts to reform lawyer ethics — the system and the rules — to better serve the interests of the average client-consumer; it will, of course, also highlight attempts within the profession to frustrate such reform.  I’ll be collecting and linking to relevant web resources, as well as offering commentary on news items and developments (or the lack thereof). My sidekicks, Joe and Jackie Cliente, will offer their insights, too.

Filed under: pre-06-2006 — David Giacalone @ 3:48 pm

 

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