f/k/a . . . the archives

January 28, 2004

Our Promise: No Politics Here

Filed under: pre-06-2006 — David Giacalone @ 4:26 pm

 sorry, dude vote


Come on by, if you’re looking for a politics-free zone.  We promise you won’t find any new listings at e&hEsq dealing with election-related or party-related topics — at least until the summer (if ever again).

Value Billing and Lawyer Ethics

Filed under: lawyer news or ethics — David Giacalone @ 3:56 pm

clock obsolete?

On his new weblog the [non]billable hour, Matthew Homann has raised some important issues concerning “value billing” and lawyer ethics, which I believe are by no means as clearcut as Matthew presumes. In “One good reason for value billing” (Jan. 28, 2004), he discusses a case where a firm “got in trouble by billing two clients tens of thousands of dollars (in hourly billing) for the same product.”

Matthew (who is trying to remove hourly billing from his practice) agrees that the particular conduct was dishonest, but asks, “should the second client have been charged significantly less because the documents were already ‘in the system’ and just needed to be revised?” He continues (emphasis added):

This is the dilemma many lawyers face when trying to bill hourly when they have become proficient at any given task. If my technology investment allows me to complete a task in one-third the time it took me last year, does that task become two-thirds less valuable to my client? Staying away from hourly billing should allow lawyers to maximize their revenue, capitalize upon their efficiencies, and keep their law licenses.

If I understand this approach correctly, there’s more than “one good reason for value billing” by the purely profit-seeking lawyer. Athough I’m sure Matthew has no intention of charging excessive fees himself, his position is basically saying that a lawyer, by avoiding hourly billing:

  • doesn’t have to pass on to the client efficiency benefits from expertise and proficiency in an area, or from technological advances and investment
  • can price-discriminate by extracting from each client the “value” of the services to the client
  • can, therefore, potentially bring in more total fees while working less, and
  • will avoid charges of charging excessive fees, because the client by definition never pays more than the value of the services to the client

I can see why this scenario might sound good to a lawyer, but I’m far from certain that it serves the client’s best interests or avoids ethics violations. First, the sophisticated business client may be able to put a “value” on a particular lawyer’s service, but it’s difficult to see how we can expect the everyday consumer of legal services to do so. What’s it worth to have the peace of mind of an estate plan, a clear property deed, a favorable plea bargain? What’s the value of being divorced to escape an ugly marriage? Like Matthew, I was a divorce mediator. How could a divorcing couple put a value on reaching an out-of-court, as-amicable-as-possible divorce agreement? What’s it “worth” to the spouse who most wants out of the marriage?

great value

These are not questions we normally ask buyers of important or necessary services to make, except in the gross sense that they choose to totally forgo the service if the price being offered by the provider is utterly unaffordable or outrageous.

Medical Analogy: Should society permit a medical doctor to charge a fee based on the value of the cure or treatment to each patient (pity the professional soccer player with a foot injury), rather than on a combination of the physician’s skills and the difficulty and time needed to perform the treatment, tempered by some market discipline? A lot of patients would probably die while attempting to determine just what a cure is worth.

In our economy, we expect suppliers to produce additional output until price equals marginal cost (see Arnold Klingman). We also expect that competition will motivate suppliers to innovate in order to become more efficient, and thus reduce costs and price. Matthew appears to want to avoid the attorney’s marginal cost in the pricing process, and to avoid passing on the benefits of efficiency and competition to the consumer. The “special protection” offered the client in the attorney-client relationship would be protection from the forces of competition and innovation within the legal profession.

I don’t see how we can divorce the billing process from the ingrained historical notion that the reasonableness of a fee depends upon the amount of time spent performing a service and the expertise and skill of the lawyer and staff. Now, when a lawyer uses a fixed fee, that fee is presumed to mimic the total fee resulting from multiplying a fair hourly rate by the time the lawyer expects to take to perform the function, after assessing the overall complexity of the client’s situation. The reasonableness of that hourly fee takes into account the lawyer’s skill, human capital investment, overhead, and technological investment, etc. — tempered by comparison to what other’s are charging for similar services.

  • newspaper If you say, “but that means technology may make many lawyer services very cheap to perform or even obsolete,” I say — from the consumer perspective, “ain’t that grand! let the competition begin!” The Good Olde Scriveners Guild didn’t much like the printing press, either.   I’m sure some scriveners found niche markets for scribe services, some became farmers, and others bought presses and started producing quicker and cheaper newspapers and books.  Once competition began in earnest among publishers (who by the way owed no professional nor fiduciary duties to their customers), they surely did not get away with saying to each consumer, “Tell me, what’s the value of this Bible to you?” The basic price depended on the costs of the inputs and quality of the product.
  • Traditionally, “value” has meant “a good product at a good price,” and has always taken into account competitive market forces that tend to bring price down to the seller’s cost.  That’s why computers cost less today than a decade ago, although buyers “need” or “value” them more now, as they have become central in our business and personal lives.  We need to be suspicious of a new definition of value that is based on a buyer guessing in advance just how much a product is worth, without knowing the quality or quantity of the services to be performed or the actual results, and with no connection to what the service costs the seller to produce.

There are a lot of problems with the billable hours system, but most of them are the result of abuses rather than of the inherent nature of using hourly billing. In determining the reasonableness of a fee, therefore, the legal profession has attempted to avoid the worse distortions from hourly billing by not fully charging for hours spent “getting up to speed” in an unfamiliar area of law. The client rightfully expects expertise and needs to be informed by the ethical lawyer when he or she is not yet fully competent in a particular legal subject.

The client also rightfully expects to pay a fee that corresponds — at least roughly — to the amount of time spent by the lawyer. And, the honest fiduciary should let the client know approximately how much work is involved. Some sophisticated clients might want to experiment with or negotiate for some kind of value-related fee.  But, in a world where there are so many capable lawyers, no sophisticate would say “I know you’ll only spend a few minutes on this, but it’s worth millions to me, so here’s a seven-figure check.” Instead, the savvy client would negotiate for, or shop around for, a more competitive fee, no matter the “value” of the result.

Illinois, where Matthew practices, has adopted Model Rule 1.5 on fees, which clearly continues to focus on the amount of time spent and skill needed, along with the expertise of the lawyer and the fees charges by other lawyer’s in the community, when determining reasonableness. In its brochure on Fee Disputes Between Lawyers and Clients, the Illinois State Bar has this to say about the basis of a reasonable fee (emphasis added):

“Abraham Lincoln, himself a lawyer, once said, ‘A lawyer’s time and advice are his stock in trade.’ The basic ingredient is the amount of time spent.”

Fitting value billing into the reasonable fee rubric seems far more difficult than Matthew admits. Lawyers need to keep in mind that esquires were shield-carriers and horse-tenders, and not the knight on the steed, much less the lord of the manor. Lawyers are servants of their clients (and not their partners). They are, of course, presumed to be skilled servants, and that’s why they make a lot more than minimum wage for their services.

briefcase women However, value billing in many ways turns the lawyer into a partner in the client’s venture. No wise entrepreneur takes in a partner without asking what contribution he or she brings to the enterprise. The “value” of that contribution to the entrepreneur depends greatly on how many others are capable and willing to provide the same investment, and not merely whether the project needs someone to provide the service or product.

I’m all for giving clients the benefits of many pricing options. However, clients must be given full information along with options (especially novel options like value billing) — information that includes the likely amount of attorney time involved to perform the service, along with a description of advantages the firm can offer due to expertise and technology. If the client is not allowed to make fully informed choices, the law firm is not fulfilling its ethical and fiduciary obligations. I plan to learn more about value billing as it might be applied by lawyers. Right now, call me skepticalEsq.

  • As for Matthew’s original question — “should the second client have been charged significantly less because the documents were already ‘in the system’” — the answer is clearly less. However, it’s possible that the first client should also have been charged less, too — especially if the firm knew it had a very similar case in the pipeline, so that the hours could be split between the clients, rather than charged to each client.

tiny check further reading at this weblog: In our post “ethics aside” (April 8, 2005), we noted that f/k/a‘s editor emeritus ethicalEsq: is getting a little annoyed by the “ethics aside” approach of the gurus and evangelists of law firm branding, marketing and alternative or value pricing. They offer the easily-tempted lawyer a paradise of premium clients and fees, with increased profits, while never probing the ethical and fiduciary duties of the lawyer to insure that the client is fully informed, treated fairly (and without manipulation) and, in the end, charged a fee that is reasonable for competent and diligent services.

. . . . Those who are advocates of “modern” marketing and pricing methods for attorneys have a duty to put the ethical issues front and center. If they, and those who are so eager to follow them to higher profits, need a place to start, they might take a look at some of our prior posts — or read them again with our ethical duties in mind. For example:

- LexThink about higher fees (er, value billing)
- brand Lex (branding to permit premium pricing and reduce price elasticity)
- chronomentrophobia (hourly billing is not the problem)
- value billing or venal bilking? (what is value billing? what should it be?)
- fees and the lawyer-fiduciary
- jackal sequel (image-making rather than quality as the basis for higher fees)
- fee fie foe and fum (change values first)
- ron baker: sensitive guy? and Ron Baker and Price Sensitivity (a look at the goal of leveraging premium fees from the client, especially the Change Order)

It’s worth repeating what I said two days ago, after LexThink: “I am all for modernizing the law firm and the lawyer-client relationship — so long as it is a tool for better serving the client’s interests, rather than one that merely uses modern selling techniques and technology to artificially increase lawyer fees and profits and to stave off the democratizing effects in the legal services marketplace of the digital revolution.” [Ron Baker disagreed with our assessment of ethics and value billing, see our response and find the thread here.].

- updates: See our comprehensive post “broadening the hourly-billing debate” (Aug. 18, 2007) and linked materials; and commentary in smart clients care about . . . marketplace “value” (Nov.25, 2008).

And, for a list of the Red Flags that have caused us to worry about the ethical and fiduciary soundness of value billing, see “value billing by lawyers raises many ethical red flags” (Dec. 4, 2008).

January 27, 2004

Weblog Ads Seem Too Tacky for Most Lawyers

Filed under: pre-06-2006 — David Giacalone @ 8:01 pm

deleteKey n . . .

 

Ethics aside, aesthetics and economics appear to doom any widespread use of advertising by weblogging lawyers — at least if those commenting at this site are representative of their webLAWg colleagues 

 

When Instapundit pointed today to Matt Welch‘s sales pitch for BlogAds, it reminded me to wrap up our own e&h inquiry into the use of content-targetted ads on lawyer websites.  Welch says there’s good money to be made allowing BlogAds on a weblog and he wonders why anyone would turn down the gelt.  A proponent of Google’s AdSense content-targetted ads had similarly wondered why webloggers weren’t cashing in on the ”free money” generated by such ads. 

 

Well, the lawyer weblog editors who responded to our questions seem to have reached a consensus:


Content-targetted ads are simply



  • too tacky


  • too likely to hawk the services of competitors and/or unsavory types, and


  • too unlikely to bring in serious amounts of money

to be used on their weblogs or law firm websites.   Using ads in general, even if un-associated, also appears to fall into the “too tacky” category.

Recently, TVC Alert pointed to an article from Search Engine Watch that explains how contextual ads operate and why they might be attractive to advertisers.  Like ads placed in a niche magazine, online contextual ads “are placed on a web page because of an ‘association’ between the web page content and the advertisement.”  Such ads can show up on any website that accepts contexual ads and has appropriately “associated” content.  BlogAds are more conventional — they are directly placed by advertisers on particular websites, and approved in advance by the website owner. 

 

Because the lawyer website owner/editor does not have control of the third-party ads appearing on a weblog or firm website, we wondered whether there might be ethical issues raised, if those placing the ads were engaged in the unauthorized practice of law or the ads were deceptive or fraudulent.  We also asked if the ads jibed with whatever image the lawyer was attempting to project. 


Our initial posting garnered comments from Steve Minor of the SW Va Law Blog, CorpLawBlog‘s Mike O’Sulllivan, Carolyn Elefant of MyShingle.com, Jerry Lawson at NetLawBlog, Denise Howell at Baby & Baggage, Marcia Oddi of the Indiana Law Blog, Kevin J. Heller of Law Tech Advisor (the only commentor using weblog ads), Marty Schwimmer of the Trademark Blog, and B. Janell Grenier of BenefitsBlog.  

You can find quotes and summaries of the comments at the foot of our original 12-21-03 posting.

 

traffic cop s  Only one lawyer besides myself seemed much worried about possible ethical issues — perhaps, because the conclusions of the others made the ethics moot.   We ethical worryworts still fret that visitors to a website/weblog might conclude that the lawyer was associated with the advertiser or was endorsing the product.  If being an “ethical lawyer” requires more than saying “I won’t be disciplined for this” [or, "it's not a felony"], a lawyer using such ads should — at the least — check regularly to see what is being offered in the targetted ads and by whom; and arrange to filter out inappropriate advertisers.  Otherwise, the lawyer is profiting from the deception or fraud — offering a platform for the ads and then turning a blind eye to their content in order to make a few dollars.

 

Since my law school days, I’ve looked askance at the “dignity of the profession” arguments raised by the legal profession (especially when used to discourage rivalry among lawyers for clients).  I must confess, however, that — were I still seeking clients as a lawyer or mediator — it is hard for me to imagine using ads on any weblog or firm website under my control.  



  • That’s true, even though Google’s ads are discrete and tastefully done.  The BlogAds seem clearly aimed at a “groovier” audience and are fun.   Still, no matter who my target audience might be, were I seeking clients, having advertising would seem to clash with the image I’d want to project.  As some of those commenting to the first post noted, almost no one is looking for a lawyer who needs to make a few cents per click-through (or wear an e-sandwich board) to stay afloat.  To me, “informal” or “friendly” is not the same as “cheap.”  Of course, that’s just me, and it’s an issue of aesthetics, not ethics.  Thanks to my generous alma mater’s free weblog service, I also have not been even tempted to pass the hat or rattle any cans.

p.s.   Tiffany left this Comment today at Matt Welch’s site:  ”I want money, but the ads would ruin the aesthetics of my site. Wow, I can be superficial. (;”   haikuEsq points out that seeking beauty should trump seeking bucks any day.


update (01/30/04):  Matt Welch successfully nudged Glenn Reynolds this week to put BlogAds on his Instapundit website.

January 26, 2004

New Weblogger Wants Fewer Billables, Less Procrastination

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

wristwatch . .

Today is the very first day for a new weblog called the [non]billable hour, which is edited by Illinois solo lawyer-mediator Matthew Homann.  Matthew’s  weblog promises “daily ideas to re-energize your law practice and make practicing law fun again.”  I’m a little confused about that “again” concept, but I hope he can pull it off.



Matthew’s very first weblog post is called I hate billing by the hour! and contains a number of New Year’s resolutions (delayed for posting ’til Jan. 26), the first of which is:


I resolve to move all of my practice away from the billable hour — no exceptions.  I do not want to keep another timesheet as long as I live.

His second posting contains a strategy to end procrastination, which I happen to believe is the finest labor-savings device ever invented, and thus a great way to reduce billables.   Be that as it may, you should check out the [non]billable hour and let Matthew know if your practice is fun again.

 

P.S.  This evening, Matthew posted what will apparently be the first of a series of commentaries on The problem with the billable hour.    In fact, like many brand-new webjournalists, he appears to be having a burst of productivity (what will happen when the inventory shelf is empty?), inspired by evangelical zeal for practicing client-centered lawyering — and the radical notion of actually listening to the client.  (Gaining mediator skills, I believe, makes a lawyer a better lawyer, and a better person.)

Telephone Appearances Finally Appear in NYC (Will the Savings Appear, Too?)

Filed under: pre-06-2006 — David Giacalone @ 7:58 pm

It took a while for the telephony revolution to reach the Empire State but, earlier this month, fourteen Manhattan judges began allowing lawyers to make several types of court appearances by telephone.  A NYLJ article explains that the new service is experimental, and is being administrated by the California-based company CourtCall.   (New York Lawyer, “NY Lawyers Now Can Make Appearance By Phoning Court,” by Daniel Wise, Jan. 26, 2004).

 

At its website, CourtCall declares that “Lawyers can stop spending their time and their clients’ money traveling to court by making a CourtCall Appearance.”  It lists, along with the NYC Supreme Court, sixteen other states where one or more court is currently using CourtCall’s proprietary system (California, Florida, Georgia, Hawaii, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, New Jersey, New Mexico, New York, Oregon, Texas, Utah, West Virginia).  

 

phone ringing  Appearing by telephone (as opposed to “just phoning in” an appearance) can clearly be an important tool for reducing attorney billables and clients’ overall litigation costs, while also helping courts to operate more efficiently and smoothly.  Given the well-entrenched practice in parts of New York State of billing clients a flat fee for each “court appearance” — usually amounting to two or three billable hours at the attorney’s normal rate – and charging multiple clients for the same time in court, it will be interesting to see whether and how these savings will be passed on to clients.  I hope someone is monitoring this situation.

 

 

January 25, 2004

Nevada high court upholds jury trial right in cases under $5000

Filed under: pre-06-2006 — David Giacalone @ 9:07 pm

According to an article in the Las Vegas Sun, (AP, Nevada high court upholds jury trial right in small cases, by Brendan Riley, 01-23-04):



“[T]he Nevada Supreme Court held Friday it’s unconstitutional for the Las Vegas Township Justice Court to deny jury trials in civil cases involving $5,000 or less.



“The [5-1] split decision overturned lower court rulings in two cases that upheld the Justice Court policy adopted in 1999 as a way to “‘preserve judicial resources.’”


The decision did not address, but would appear to draw into question, the ability to preclude juries in “small claims” matters, which are also filed in Justice Court (using secial procedures), and may include claims up to $5000.  Nevada’s attempts at increasing access and conserving judicial resources by making court procedures more user-friendly (especially through its self-help centers, which we discussed here) may also be in jeopardy.

The two cases in question involved auto accidents.

Some sectors of the Bar may rejoice at this turn of events, which will mean more work for lawyers, but it does not bode well for increasing accessibility to civil justice for the poor and middle-class consumer.

What’s the Future (Virtual or Actual) of the Legal Profession?

Filed under: pre-06-2006 — David Giacalone @ 6:56 pm

Following Dennis Kennedy‘s recent pointer to the current edition of Law Practice Today (January 2004) proved to be well-worth my effort.  I found three articles that ask some very good questions about the future of the legal profession.  The answers will be important to the profession’s ability to better serve and understand the interests of its clients.

 

question dude  I found Kennedy’s article to be especially interesting.  It’s called “A Vision for Virtual Law Firms — Questions You Should Be Asking” (Law Practice Today, by Dennis Kennedy, Jan. 2004).  Dennis says “To me, virtual law firm simply means an affiliated group of lawyers connected by technology rather than co-existing in common physical locations.”  With that definition in mind, he asks some important questions.  The first two give a good taste of Dennis’ current thought processes:



  1. What happens when you find that the mentors, experts and authorities you grow to rely on are not the people down the hall, in your offices, or even in your geographic area? With e-mail lists, this phenomenon is increasingly common.

  2. Do you best serve your clients by referring work to your partners when you have professional contacts clearly able to do a better job?

Clearly, Dennis is asking lawyers to think outside-the-firm when attempting to serve the client’s interests — to give clients the best value, once you understand their needs and desires, by choosing the attorney or service provider that is the best match.  This may often mean turning to an attorney who is not employed by or a member of your “actual” law firm.  In the past, physical limitations made it easy to ignore this question.  Technology now makes the ability to use “outsiders” easy.   Will law firms firmly reject the notion of sending client matters outside of their own profit centers?  Don’t fiduciary and ethical obligations mandate that the client’s interests come first?  These issues need full discussion and reflection — in an atmosphere devoid of the guild mentality that predominated in prior millennia.

 

Another LPT article worth a look is Steven A. Lauer‘s “What Do Law Firms Sell? What Do Clients Buy?“  Lauer’s article discusses the trend by corporate clients to turn to a smaller number of “preferred law firms,” and to put pressure on law firms to reduce fees.   Lauer notes that (emphasis added):


 ”Law firms think that they are in the profession of selling a process, such as counseling. While that clearly constitutes a significant component of what their invoices describe, in truth clients want to purchase something else. Clients want to receive, and pay for, a result. That result might be representation in a lawsuit. It might be the legal work necessary to close a business transaction. Their focus on process, however, causes lawyers to think of themselves as sellers of their time rather than their expertise (despite what they say in their brochures and other marketing materials). The result is legal fees calculated by multiplying time and rate.


If law firms view their output as a result, they can revisit the way in which they price their product. They should be able to apply more imagination and creativity to their pricing. This can enable them to address (and perhaps even anticipate!) clients’ concerns in that regard. Fees based on something other than an hourly rate multiplied by the number of hours devoted to a task (e.g., “alternative” fees) can be a basis for them to do so. 


Like Dennis Kennedy’s issue of referring client matters to “virtual law firm” colleagues, Lauer’s focus on results (and information transfer) for clients asks the law firm to put the client’s interests first, despite a likely reduction in fees — at least in the context of any one project or case, and possibly overall.


briefcase girl  The final article I want to mention is the next generation roundtable, “Looking to the Future: What Changes Do You See Coming in the Next Twenty Years?”,  (LPT, January 2004, organized and edited by John Tredennick with assistance from Aman Bagga and Marisa Davies, and including law students from Stetson U. College of Law).  The Questions about the likely future of the profession are important (e.g., role of billable hours, substituting software for lawyers, going global), and the editor says ”Some of their answers might surprise you.” 


However, I suggest you read the roundtable discussion mostly to spur your own responses.  It seems, unfortunately, that today’s law students and newbie lawyers aren’t any more aware of the realities of law practice than they were in “my day.”  (Am I kidding myself that we were more articulate than the current crop?)  I won’t quote any of the less-then-edifying answers, to protect the “innocent”.   However, Young Lawyer Division representative Aman Bagga, who surely had more opportunity for serious consideration of the issues than the students, had some insightful comments on the most important role changes we can expect for lawyers, due to new technology.  For example:



Bagga: On the consumer side, software will change the function of a lawyer. Lawyers in the future will review documents after their clients first prepare a preliminary version. The work balance will shift from one where the lawyer does all the preparations to a model where customers do some of the groundwork and the lawyer reviews the document.


Already there are many legal programs that help the average person fill out legal documents using a “check-the-box” method. This is similar to taxes, which can be completed either by hand, by using software or by using a professional. Some legal documents will initially be created using software by selecting clauses that a person wants to include in the document. Lawyers will then earn their fee by reviewing the document for completeness and by offering advice to make sure all the issues are covered.


I’m happy to note that most young lawyers seem to get their sea legs, and smoother tongues, rather quickly once thrown into the real world of law practice.   (See, e.g., Ms. Scheherazade.)    Now, if we can just get them to be more interested in service over profits, they’ll soon be teaching the gray-beards (and those who cover their gray) some important lessons in professionalism and ethics.


Follow-up (01-27-04): See the “What Do Lawyers Sell” posting at the [non]billable hour.

January 24, 2004

Undergrounder Feels Under Attack by ethicalEsq

Filed under: pre-06-2006 — David Giacalone @ 8:01 pm

I’ve spent way too much of my Saturday leaving Comments to a posting this morning by Evan Schaeffer of Notes from the (Legal) Underground.  Evan seems surprised that I could respond yesterday to a humorous “riposte” by him, with both a little humor and a little serious ethics discussion.   

 

Evan say he refuses to address the ethical issue concerning contingency fees, because its “not the focus” of his website.  Nonetheless, he states:


treasure hunter  “Call me a coward, but I’m not going to take Mr. Giacalone’s bait, at least not right now, except to say the contingency fee system isn’t broken and doesn’t need to be fixed. In the real world, injured people who need a voice to speak for them often don’t have the means to pay that voice by the hour. So some of them agree to pay when the case is over, happy to allow their lawyer (that is, me) to assume the risk that the case might yield nothing at all, in which case I’ll be paying the costs. All things considered, I usually charge a third, sometimes more, sometimes less. (With that said, I recognize the benefits of Mr. Giacalone’s weblog and his commentary on legal ethics, and look forward to reading it. However, I’m not going to direct my clients to his site, as he suggests in his post, before they sign with me. Sorry.)”

I’ve never attacked the basic concept or use of contingency fees, and instead support it.  (see the many listings on our Fees resources page).  My gripe is with the use of a standard contingency fee — with a firm offering virtually all of its clients the same fee, with no offer to negotiate the level, regardless of the merits of their case — rather than tailoring the fee to the risk involved to the lawyer in each case.   At best, Evan’s argument above explains why a contingency fee can be good for many clients.  Well, sure.

 

As Public Citizen said last year in a filing opposed to the Common Good “early offer” proposal: 


“It is widely accepted that contingency fees should vary depending on the riskiness and complexity of the individual case; indeed, that is what the ethical rules currently require (even though almost universally honored in the breach).”  [emphases added] 

As we then replied, decrying Public Citizen’s lack of action to help p/i clients (as opposed to p/i lawyers):


complaint bill . . .



The meaning of Public Citizen’s admission is clear:  Although the percentage rate of a contingency fee is ethically required to relate to the riskiness of each particular case, they “almost universally” do not.  Since p/i lawyers customarily reject the most risky cases and almost always charge the maximum percentage allowed in their jurisdiction for the cases they do take, a large percentage of contingency fees are greater than can be justified by the risk taken by the lawyer of working without adequate compensation.  Put another way, in a significant percentage of p/i cases, plaintiff’s lawyer is paid an excessive amount of the client’s award and the client is cheated out of a portion of his or her fair share.  In those cases, the lawyers receive unreasonably high fees, in violation of their ethical obligations.    


ABA Formal Ethics Opinion 389 (described and discussed at length here and here) lays all this out clearly, interpreting the same ethical rule on fees that exists in Illinois and Missouri, where Evan Schaeffer practices.

The entire plaintifff’s tort-p/i bar appears to be afraid to address those ethical issues directly.  Evan uses much of the space at his weblog to defend p/i lawyers and the contingency fee system.  Yet he claims that the ethics of contingency fees is not his focus.  That is exactly what’s wrong with the way p/i lawyers use contingency fees: they want to automatically apply their percentages, without any concern for whether the results unfairly and unethically take money from their clients.  I guess Denial runs Underground in the world of tort law.




  • boxers One final issue:  Evan tells his readers that I only wrote my post about Enthusiasm/Machismo as an excuse to lambast him over contingency fees. Those are fighting words (which got my blood roiled).  You can see my response(s) at his site’s thread.

fireman hose . .


P.S.  Evan has wisely suggested this evening that we bring this tiff to an end. [I've done I all can to increase his page hits on a slow weekend.]   I would sincerely like to hear his thoughts on the ethical issues raised concerning standard contingency fees.   I also really wish that haikuEsq had been in residence today, to impose better priorities and more brevity on this humble weblog. 

January 23, 2004

Do Law Clients Want Enthusiasm or Machismo?

Filed under: pre-06-2006 — David Giacalone @ 11:53 am

pirate  your kind of lawyer?


Evan Schaeffer at Notes from the (Legal) Underground shoots our Southwest-Airlines-as-law-firm metaphor out of the skies this morning (see yesterday’s post).  He doesn’t think law firm clients would be “accepting of the warm-and-fuzzy-advocate” suggested by the successful airline’s approach to doing business.  They would instead choose the air force image.   I’m not at all sure that clients would prefer military-style discipline, cost-overruns, and collateral damage over a firm that gets the job done economically but enthusiastically, with morale high and customer satisfaction the first priority. 


Of course, a lot depends on just what service the clients needs, and Evan might be right about many personal injury clients, who are his specialty.  I went to his law firm site to see what image Schaeffer & Lamere was projecting.  Instead of warrior soldier graphics, I found dignified sepia-tones and genteel images.  I guess Evan lets his Mars side show while weblogging and litigating.  


  • On a more serious note, I checked out Evan’s Personal Injury FAQ page and made a discovery that clients should not be at all happy about — although S&L “will not take your case unless we think it has a good chance of success,” it “typically” charges a 33.3% fee, with 40% taken for “more complex kinds of cases.”  The spoils of victory are indeed great for the swashbuckling esquire — and, when a standard contingency fee is used, not related to the risk incurred by the lawyers.  I wish all personal injury clients got to read this or this before signing their contingency fee agreements.  It may not be entertaining reading, but it is educational. 

MJP Reform: Bumpy Road or Fast Track?

Filed under: pre-06-2006 — David Giacalone @ 9:27 am

“x-skier” . . .


An article in the current issue of the ABA Journal takes a look at the inevitable, uneven and unpredictable state-by-state review that follows any major change in a Model Rule of legal ethics.  The ABA adopted New Model Rule 5.5  in 2002 in the hope that multijurisdictional practice would be easier to accomplish and would take place under more uniform rules across the nation.   (See our posting earlier this week, discussing rejection of changes to Rule 5.5 by the Connecticut Bar Association, which has links to ABA MJP resources.)



  • Because rules of professional conduct come under the authority of each licensing jurisdiction, Model Rules are only advisory, and each state must decide whether to ignore or adopt them — and/or adapt them to their own needs and internal pressures. 

The Journal article notes that “In the 17 months since the ABA amended the Model Rules to ease restrictions against multijurisdictional practice, six states—Colorado, Delaware, Nevada, New Jersey, North Carolina and South Dakota—have enacted new rules that lower the barriers against temporary practice by out-of-state lawyers. . . . By late 2003, proposals to revise MJP rules were pending in at least 13 other jurisdictions.”


Nonetheless, Wayne J. Positan, the Roseland, N.J., lawyer who chaired the ABA Commission on Multijurisdictional Practice, “cautions that the entire review process could take up to 20 years.”  And:



An even greater concern for proponents of easing rules on multijurisdictional practice, however, is that the states will not agree on uniform rules, leaving a patchwork of regulations imposing varying requirements on lawyers who seek to practice temporarily in outside jurisdictions.


There are apparently no clear trends yet, but the article takes a look at many of the variations that have already cropped up.

January 22, 2004

We Like SWA, L.L.P.

Filed under: pre-06-2006 — David Giacalone @ 11:30 pm

silly jet

 

Larry Bodine at LawMarketingBlog invites us to imagine what a law firm would be like if it were run like Southwest Airlines.   Like Larry, I think such a law firm would be great for clients and employees.    Among the characteristics listed, a law firm run like SWA:



We Like SWA, L.L.P.

Filed under: pre-06-2006 — David Giacalone @ 11:30 pm

silly jet

 

Larry Bodine at LawMarketingBlog invites us to imagine what a law firm would be like if it were run like Southwest Airlines.   Like Larry, I think such a law firm would be great for clients and employees.    Among the characteristics listed, a law firm run like SWA:



Should Substance Abuse Affect Bar Admission?

Filed under: pre-06-2006 — David Giacalone @ 10:40 pm

The topic of substance abuse and bar admission is discussed at length in the current edition of the ABA’s Student Lawyer magazine, in “Under the Influence,” by Cynthia L. Cooper. (December 2003, Vol. 32, No. 4).  The opening lines are an understatement:

martini Drug and alcohol dependence affects law student’s health and their prospects for bar admission. Law schools and legal groups are working to raise awareness of the problem and develop solutions, but the task isn’t easy.

As we discussed in a posting last June, the numbers show that substance abuse is a major problem for both lawyers and law students.  The article notes:

  • There are “15,000 law students nationwide who acknowledge problem drinking. Uncalculated are the number who get into trouble when they inhale, shoot, snort, or pop their substances.”
  • “Studies indicate that lawyers engage in higher-than-average drug and alcohol abuse, affecting from 15 percent to 18 percent of the profession, compared with 10 percent of the general population.
  • Disciplinary bodies discover that chemical dependency problems are at the root of 40 percent to 70 percent of complaints about lawyers, says New York state Chief Judge Judith Kaye, president of the Conference of Chief Justices. . . . ‘I believe the court system owes it to the public to do all we can.’”

Judge Kaye’s numbers may be a bit high, as substance abuse is often an excuse given by lawyers who are trying to minimize their responsibility for unethical conduct, and gain sympathy.  Still, it seems clear that the problem is big enough to warrant significant attention by those responsible for admission and discipline within the profession

coffee cup The article says that “To encourage law school deans to take action on chemical dependency, the ABA outreach committee opened a hotline, printed stickers and advertisements, and is developing an informational kit.”   Also, James Moore, chair of the New York State Lawyer Assistance Trust, advises schools to have a written policy to address alcohol and drug use, serve less alcohol at student functions, create relationships with the Lawyer Assistance Programs that now exist in every state, (in order to help students confidentially), warn students that an unaddressed problem may affect their ability to be admitted to practice, and enlist someone as a designated person for student assistance.

Naturally, the potential effect of recovery efforts on bar admission is crucial for many students.   The article states:

For the bar application process, most states require disclosure of legal infractions related to substance abuse, such as drunk-driving arrests; others inquire into substance abuse or treatment. Some establish a period of probation or other conditions to admission; others do not.

Some law students say their colleagues avoid treatment because they fear that getting help would send the wrong signals to bar examiners and result in denial of bar admission, by putting them on a blacklist. The ABA Law Student Division is helping to research and promote a “best practices” standard on recovery and bar admission.

What role should substance abuse problems and attempts at recovery play in the bar admission process?  I’m not sure and invite your comments.  Given the obvious harm to clients from lawyer misconduct related to substance abuse (from missed deadlines to misappropriated funds), the topic seems highly relevant to the fitness of a candidate.  Honesty on the topic should be demanded, of course, but a record of prior abuse problems should not be an automatic bar to admission.  Serious, successful attempts to ”dump old drinking and drugging habits in the pursuit of professionalism” should be commended, not penalized.  Are probationary periods advisable and workable?


. . . .. Although substance abuse may no longer be stigmatized as a moral failing in our society, failing to get help and seriously work at recovery is an indication that an applicant to the bar, or a newly admitted member, is not taking his or her responsibility to clients, the courts or the bar seriously enough to warrant getting or keeping a license to practice law.   A generation of students who believe that binge drinking is a normal part of social life needs to do some growing up and reality testing while in law school.  I hope that the carrot of bar admission can be a sufficient incentive.

  • The June 2003 issue of the DC Bar’s magazine, Washington Lawyer, has a Bar Counsel column titled Factoring Disabilities Into Discipline: A Special Equation. In it, Joyce E. Peters explains the complications that arise when substance abuse, mental illness or other disabilities are brought into the disciplinary process.

Identity Theft Again Tops FTC Complaints List for 2003

Filed under: pre-06-2006 — David Giacalone @ 3:29 pm

Today, the Federal Trade Commission released its Top Ten List of Consumer Complaints for 2003, as part of its report National and State Trends in Fraud and Identity Theft”. The press release states:


For the fourth year in a row, identity theft topped the list, accounting for 42 percent of the complaints lodged in the FTC’s Consumer Sentinel database. The FTC received more than half a million complaints in 2003, up from 404,000 in 2002, and Internet-related complaints accounted for 55 percent of all fraud reports, up from 45 percent in 2002.

 

  • Of the 516,740 complaints received in 2003, 301,835 were complaints about fraud and 214,905 were identity theft reports.
  • Identity theft reports represented 42 percent of all complaints, up from 40 percent in 2002.

  • police  Computer technology may be making fraud easier to perpetrate, but it is also helping to track the complaints and facilitate law enforcement.



    “Howard Beales, Director of the FTC’s Bureau of Consumer Protection noted that in addition to the complaints consumers register directly with the FTC, other organizations, including the FBI’s Internet Crime Complaint Center, the U.S. Postal Inspection Service, The National Consumers League’s National Fraud Information Center, Canada’s Phonebusters, and Better Business Bureaus contribute complaint data to the FTC’s Consumer Sentinel database.


    “More than 900 law enforcement agencies in the U.S., Canada, and Australia are using Consumer Sentinel, accessing one-and-a-half million consumer complaints through the Sentinel network,” Beales said. “They can coordinate actions, track down leads, and research other law enforcement tools. This model – one central source of consumer fraud data available to law enforcement, reflecting overall trends in fraud, ID theft, and emerging scams – is making our work more efficient for law enforcement and more effective for consumers.”


    Consumer Information:

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