… dagosan

Notice: After almost 6 years, 2500 postings, and a million visits,  f/k/a stopped publishing new material (and accepting new Comments) as of March 1, 2009.  The content is all still here in our archives, of course, so please browse to find unique and wide-ranging punditry, much of which deals with the foibles of lawyers and the rights of their clients, plus thousands of quality haiku by a couple dozen fine poets.  See our About page, to learn about f/k/a’s history, philosophy, honors, etc., and our Prof. Yabut’s Favorites Page for the closest thing we have to a Greatest Hits List.

Broken Link Warning:  Due to an involuntary webserver change in the Spring of 2009, some of our links to internal f/k/a material no longer work.  We regret this inconvenience.  However, all of our content still exists, and you should be able to locate the desired post by doing a Google Search of f/k/a [put a space and then your search terms after our URL in the Google search box].

….. david giacalone – Editor/Proprietor

Archive of Ages? This is the last new post that will appear at this web address.  As of March 1, 2009, f/k/a will be in “archival status,” existing only in its archives, with posts dating back to May 2003.

• Don’t miss our artsy goodbye, “a few farewell haiga” (photos with linked poems)
• . . . nor our personal thank you’s in “just getting to know you” and “all that great haikai“

• By the way: no one was willing to go through 2,472 posts to try to choose f/k/a’s Greatest Hits, so you’ll have to make do with our Prof. Yabut’s Favorites Page.  Go to the Honored Guest Poet Index for links to the individual archive of each of our haiku poets.  Clicking ethicalEsq’s Resources will bring you to our portal for legal ethics commentary (including extensive commentary on lawyer fees).  See “Our Resources” and “Categories” in the Sidebar for more topics.

As I type right now, there are fewer than 12 minutes until my self-imposed midnight shutdown deadline.  So, you’re in luck: There’s no time for a long-winded farewell apologia, nor even an attempt to answer Darren Rowse’s recent question: “If your blog died today, what would it be remembered for?”  Sad to say, however, the f/k/a Gang — your Editor and his various alter egos — have apparently learned little since we tried to quit this weblog in October 2003.  Our sentiments then ring just as true today.  Because we still haven’t learned how to pace ourselves, we’re going cold turkey on intense daily blogging, to free up time and energy for creating a more joyful, satisfying and meaningful journey.

• If interested, you can still find my new poetic offerings at “dagosan’s haiku diary“ and “simply senryu” (which should get a lot more attention in my post-f/k/a era), and published works here.

A parting note:  It’s been great to be able to opine on subjects as diverse as the Graying of the Bar, the meaning of “goomba,” and the importance of pink flamingos and Wendy Savage, while cultivating my artistic side, and bringing the joys of genuine haiku to a wider audience.  Many thanks to all who have made f/k/a their regular stop for one-breath poetry and/or breathless punditry, and to the generous and talented poets who let me share their haiku.  If I find a new online project or job, I’ll get the word out to my blawging and haijin friends.

One year ago today, I took this picture at the end of the block where the f/k/a Gang lives.  We hope to see a lot more of the Mohawk River from now on.

ides of March
floodwaters where
the snowman stood

… by David Giacalone

fireworks finale!
her eyes return
to the fireflies

… by David Giacalone – Simply Haiku, Autumn 2007, vol 5 no 3 -

afterwords: If you’re missing our photography, check out “suns along the Mohawk,” which features my photos from along the Mohawk River and around the Schenectady Stockade.

HALT has been working for over 30 years to achieve “Simple, Affordable, Accountable Justice for All.”  f/k/a and our self-help-law sister weblog SHLEP have quoted and linked to HALT, its studies, Report Cards, and guides scores of times, beginning on our very first day of blogging in 2003.  To my surprise, however, I was disappointed by HALT’s Understanding Attorney Fees ["UAF"]. It correctly advises consumers that:

“If you find yourself with a legal question, you should explore all of the options available to you and become educated about your legal question. You may actually find that you do not need to hire an attorney. . . . However, if your legal matter is complex, substantial money is at stake, you’re charged with a crime, or you’re simply uncomfortable handling legal matters on your own, you’ll probably need to hire a lawyer.”

For those who do need to hire a lawyer, there is simply too much left unsaid in Understanding Attorney Fees about how to keep your legal fees down.  The HALT Guide does note that “As a legal consumer, your best defense against paying more than you should is to educate yourself about legal fees before signing on the dotted line.”  And, it promises to explain “the most common billing arrangements used by lawyers, some new billing arrangements lawyers are using and specific ways you can lower your legal costs.”

Nonetheless, for our money, HALT’s Understanding Attorney Fees:

• Offers very little help for controlling or lowering fees that are based on an hourly rate for the lawyer’s time — not when the client is entering into an hourly billing agreement, while the services are being provided, nor when presented with a periodic or final bill.
• Takes a real dive on contingency fees, completely ignoring HALT’s own position on such fees from a decade ago, as presented in its Injured Consumer’s Legal Bill of Rights (The Legal Reformer, December 1997; issue no longer online).  At that time, HALT insisted that p/i lawyers should be charging clients a lower percentage in less-risky cases, rather than using the same standard contingency fee for virtually all clients (i.e, one third or 40%).  Lawyers were also required to provide the client with key information and estimates relating to risk prior to entering a fee agreement, with the information included in the signed agreement.  Frankly, the contingency fee section in the UAF Guide sounds like it was ghost-written by the plaintiff’s personal injury bar.  It doesn’t even mention the word “negotiate.”
• Seems to offer a blanket endorsement of “alternative” billing methods, with very little help on how to shop for such fees, and no warning that some lawyers offering alternative fee arrangements in fact intend to extract higher fees than possible when billing by the hour (e.g., so-called Value Pricing).

. .   We hope consumers will read HALT’s “Understanding Attorney Fees,” but we believe the HALT staff has left too much out of its Guide. There’s no way the f/k/a Gang can create a comprehensive new draft or supplement to HALT’s publication (especially since we are moth-balling this site tomorrow).  We will, however, summarize portions of HALT’s UAF Guide, suggest some tips for keeping fees down, and point to a few other helpful sources.

Consumers shopping for legal services need to remember that every kind of pricing arrangement can be exploited or misused to result in excessive fees or inadequate services.  For example, hourly billing might result in a lawyer doing too much, but fixed fees can lead to lawyers doing too little, and contingency fees can make you pay far more than is warranted by the risk the lawyer is taking of not being paid or the amount of work that will be required of the lawyer.  See, e.g., our posts “other thoughtful voices on the lawyer billing debate;” and “the reality of alternate billing.”  Clients need to insist on more information and lawyers need to act in ways that create trust and give full value.

First, two quick points:

• Unbundling can Save You a Bundle: With “unbundling,” the lawyer and client agree that the lawyer will only perform specific, discrete tasks. If you think you’re willing and able to play a large role in your own legal affairs, but know you want or need a lawyer to help perform “discrete tasks” and serve as advisor and coach, look into Unbundling. (see our prior post; and this posting from SHLEP for an introduction); the excerpts from M. Sue Talia’s book Unbundling Your Divorce can help you determine if they are good candidate. Find State unbundling rules here.
• Do-It-Yourself/Pro Se: For information relating to do-it-yourself resources, see shlep: the Self Help Law ExPress [which was started by f/k/a's Editor], where you will find information on locating self-help materials, thinking about whether representing yourself makes sense for you, a Topic Index, and much more.

In “Understanding Attorney Fees,” HALT reminds consumers that “The type of arrangement you enter into can have a huge impact on the amount of fees you’ll pay, so it’s important to understand how each works and the incentives lawyers have for using them.”  It explains that:

“How much lawyers charge depends on where they do business, whether they are self-employed or working for a firm, how complex the case is and, in some circumstances, what you can pay.  The market rate for any given legal service, then, is really a range of fees that often varies.”

“. . . Lawyers usually charge for their services in one of three ways—hourly rates, flat fees and contingency fees.  They can also charge a retainer or “down payment” on the legal services you are purchasing. The type of fee arrangement with your lawyer can have a huge impact on the amount you’ll pay.”

“. . . Hourly fees are based on the number of hours a lawyer works on your case. If your lawyer charges $100 an hour, your fee will be $100 multiplied by the number of hours worked. .  .  .  Flat fees are typically offered for routine legal matters that are largely paperwork, like preparing a will or getting an uncontested divorce.  You are charged one specific fee for all of the work done on your case, no matter how long it takes.  Finally, with contingency fees, attorneys receive payment only if they win your case”

In a too-brief section called “Lowering Legal Fees,” the UAF Guide offers ideas relevant to all fee arrangements.   Here are “specific things you can do before and after you hire a lawyer to help keep legal costs down.”

“Shop carefully.  One of the best ways to ensure you won’t pay more for legal services than you should is by hiring the right attorney at the start.  To do that, you need to shop carefully—much as you would for any big purchase.  Lawyers develop expertise in different areas of the law so you shouldn’t hire a divorce lawyer to assist you with a real estate transaction.  Comparative shopping for a lawyer helps you to understand the range of services and prices available, compare differing views on your legal problem and select a lawyer who is likely to handle your case as you expect and at a price you can afford.”

“Case retainers.  These fees are paid to retain the services of an attorney at the beginning of a case. This is the kind of retainer most often paid by the typical legal consumer.  It may represent all of the fee, none of the fee, or a portion of it. It may be refunded or not, depending on your agreement.  For example, a lawyer may charge you a flat fee of $800 for an uncontested divorce and ask you to pay a retainer of one-quarter—$200—up front.  This money may also be used to pay expenses associated with the case, such as filing fees. The important thing to make clear at the outset is whether the retainer is an advance on expenses, fees or both, and whether any unused part of it will be refunded.”

“Review billing statements.  When you receive your lawyer’s bill, make sure you understand what you are being charged for—don’t be afraid to question discrepancies or to ask about charges you don’t understand.   Reviewing your bills lets your lawyer know you are on top of things and that you do not expect to be charged more than you should be.”

Here’s how HALT’s Understanding Attorney Fees treats the three primary types of billing arrangements, along with my comments and suggestions.

Hourly fees. As most Americans know, hourly fees are based on the time devoted to the client’s matter by lawyers or others in a firm, stated as dollars per hour.  Although most clients still purchase legal services from lawyers by the hour, UAF has a rather brief discussion of hourly fees.  The HALT Guide makes the following points:

• “If your lawyer charges $100 an hour, your fee will be $100 multiplied by the number of hours worked.  Lawyers also bill for partial hours spent, usually by the quarter or tenth of an hour.”

f/k/a says: Hours X Hourly Rate is meant to be the maximum that a lawyer can charge under an hourly billing agreement.  The figure is not automatic or set in stone.  As the 1996 Statement of Billing Principles from the American Bar Association [ABA] Task Force on Lawyer Business Ethics says: “The lawyer is expected to use professional judgment in determining whether the number of hours spent on a matter is reasonable under the circumstances of the engagement” — e.g., making appropriate reductions (”writing off” hours) for time that is not used in an efficient, cost-effective manner, or that constitutes training or getting up to speed.

Increments:  An “increment” is the shortest amount of time a firm will bill in calculating hours spent working for a client. An increment of 0.10 of an hour means the firm will charge the clients for the equivalent of six minutes, no matter how much less than that was actually spent.  In that context, a quarter hour seems very high and clients should resist such a large increment. [It would mean, for example, at $200 an hour, paying $50 for a two-minute phone call.]  As was stated in Professional Lawyer magazine (in an article discussed below),

“A normal billing arrangement for a firm is to bill in increments of 0.10 of an hour, (6 minutes). ‘[P]rofessional persons who charge their clients fees in excess of $80.00 per hour, based upon time spent, cannot, in all honesty and reasonableness, charge their clients for increments in excess of one tenth of an hour.’ In re Tom Carter Enterprises, Inc., 55 B. R. 548, 549 (Bankr. C.D.Cal. 1985).”

• “Under an hourly-fee arrangement, the more hours worked, the bigger the bill.  This rewards the lawyer who puts in more hours on your case, whether or not it needs that much time.”

f/k/a says:  This is true, which is why the lawyer has an ethical and fiduciary duty to work efficiently and to find out, as the ABA Billing Statement puts it, whether the matter is “of such critical importance to the client that a ‘leave-no-stone- unturned’ approach is appropriate,” or the client would instead “prefer to accept some risk in order to avoid some of the costs attendant to such an approach.”

• “If you agree to an hourly rate, make sure your agreement specifies the hourly rate for your attorney as well as what you’ll pay for junior level professionals or support staff.  You should not be paying the attorney’s hourly rate for work being done by administrative staff.”

The Actual Hourly Rate:  You should keep in mind, when looking at a firm’s schedule of hourly rates for its lawyers that the standards embodied in Rule 1.5(a) of the Model Rules of Professional Responsibility apply — i.e., to be reasonable, an hourly rate must be based on the experience and capabilities of the lawyer, complexity of the matter, skill required, customary local charges, time limits imposed by the clients, etc..  You should not, for example, be paying top dollar for inexperienced lawyers.

• “You should also ask that your hourly fee agreement include a fee cap—an amount that cannot be exceeded without your prior approval.”

• “Some lawyers are willing to coach pro se litigants (those who are representing themselves in court) on an hourly fee basis.  Instead of handling the litigant’s case from start to finish, they advise, coach, direct and charge for these services by the hour.” [Note: This is related to the Unbundling we mention above.  With "Limited Scope Representation," the lawyer might make court appearances.]

………………………. ..

By understanding some of the ethical principles relating to hourly lawyer billing, and utilizing certain practical strategies and tactics, clients can also help ensure that their fees are no larger than necessary.  Here are tips we’ve garnered from sources around the web:

.. .. Retainer Agreements:  The authors of the HALT book “Using a Lawyer: And What To Do If Things Go Wrong,” Kay Ostberg & Theresa Meehan Rudy, have put together a Model Attorney-Client Agreement [5 pages, pdf) that is "designed to secure the rights and stipulate the responsibilities of both the attorney and client."  Using a Lawyer tells us why a well-structured retainer agreement between the lawyer and client is important:

"As the saying goes, 'the devil is in the details.' Sophisticated corporate clients demand that their lawyers hammer out details in their attorney-client agreements.  This helps to ensure that their rights are protected and the fees they'll charge are expected.  The average consumer of legal services should demand the same.  HALT's research shows that most disputes between clients and attorneys could have been avoided if the nature of their relationship had ben made explicit at the outset.  If your attorney refuses to sign or draft an agreement that protects your rights, ask why. The answer will tell you whether or not the attorney is the sort you want to employ.

The f/k/a Gang urges legal consumers to take a good look at HALT's model agreement. As they note, "The language in this model contract is not magic.  There are other ways of protecting consumers' rights in writing.  However, this model will help you identify the most important protections that you should insist upon, and alert you to other possible sources of problems and frictions between lawyers and clients."  Among other items, the Model Agreement urges the client to ask for the inclusion of the following clauses:

- Attorney estimates that these court costs will not exceed the sum of ______ Dollars ($____)
- Attorney estimates additional costs listed above (e.g., phone charges, document search, computer research, investigator, travel) will not exceed the sum of  ______ Dollars ($____)

- Attorney estimates that the total cost of fees for the services of Attorney, junior members, and paralegal will not exceed the sum of  ______ Dollars ($____)
- Client will not be liable for any additional costs or fees which exceed the estimates given above in ___, unless attorney notifies Client of the additional expenses required and receives permission of Client before incurring the additional expenses.

- Client will receive a billing statement monthly (or at some other appropriate interval) with detailed itemization of the attorney's junior members' and paralegals' activities in the case, the amount of time involved, and the additional costs incurred.

- Should the retainer exceed the total cost of completing the case, the remainder is to be returned in full to Client.

A consumer who wants to understand the factors that go into a well-written retainer agreement (for working on representation in a particular legal matter) should also see the article "Retainer Agreements and Rule 1.5(b)" in the December 2008 issue of The D.C. Bar magazine, Washington Lawyer, by Dolores Dorsainvil and Daniel M. Mills.

update (7 PM, Feb. 28, 2009): By accident, I just ran across a post I wrote back in 2003, but had forgotten about, called "improving lawyer fee and retainer agreements."  It says, in part:

T he Law Practice Today blog, which is sponsored by the ABA Committee on Law Practice Management, has a new and useful posting entitled Build a Better Fee Agreement, by David Bilinsky and Reid Trautz (posted 7/10/03). The tips are excerpted from the April 2003 edition of Law Practice Magazine. The article states, with brief explanations, that a comprehensive written fee agreement between lawyer and client should do the following . . . ." [It's worth reading the rest and the original article.]

HOURLY BILLING GUIDANCE for Lawyers (and savy clients): Earlier in this post, we mentioned the Statement of Billing Principles produced by the American Bar Association’s The Task Force on Lawyer Business Ethics in 1996.   The guidelines for lawyer billing contained in the Statement should help clients better understand issues that are relevant to constructing and implementing a retainer agreement, and reviewing a billing statement.  Here are some of the most important concepts and principles (emphases added):

DISCLOSURE AND UNDERSTANDING

The first guiding principle for the lawyer with respect to billing for legal services should be an understanding with the client of the basis for such billing arrangement through full disclosure by the lawyer.   . . . Such understanding between lawyer and client should include not only the method to be used in calculating fees for legal services but also the scope of the legal services to be performed (and charged for) to the extent that an understanding with respect to the scope is expected to be an important factor in the lawyer-client relationship.   For example, is the matter of such critical importance to the client that a “leave-no-stone- unturned” approach is appropriate, or does the client prefer to accept some risk in order to avoid some of the costs attendant to such an approach? . . .

LAWYER’S RESPONSIBILITY IN PREPARATION OF INVOICES  

. . . The lawyer and law firm should make every reasonable effort to provide clients with complete and accurate invoices describing the legal services provided and the amounts charged for same. . . . Each invoice should clearly identify the legal services provided in such specificity as the client requests, the fees charged for such services, and the disbursements and other charges relating to the period being billed. . . .

HOURLY BILLING ARRANGEMENTS

The agreement by a client to be billed for legal services on an hourly basis does not justify the lawyer spending an unreasonable number of hours on a particular matter or task.   The amount of time spent on a matter should be reasonable in relation to the client’s goals and expectations and must also be consistent with the lawyer’s professional ethical obligations.   In general, the lawyer should have an obligation to address the matter that is to be billed on an hourly basis in a cost effective manner and to avoid “churning” hours, whether due to the lawyer being under-worked and therefore spending more time than is reasonable on the matter, the assignment of the matter or task to a lawyer who is too inexperienced to perform it competently and/or cost- effectively, or otherwise.

The lawyer is expected to use professional judgment in determining whether the number of hours spent on a matter is reasonable under the circumstances of the engagement.

Premium Billing

. . . [An] example of opportunity cost would be a client who demands an unreasonable turnaround time for certain work, thereby rendering it impossible for the lawyer to attend to other business or personal matters in the normal course.   Such “rush” demands may provide a reasonable basis for a surcharge or higher hourly rate.   If such a surcharge is to be implemented, however, it would require advance disclosure to and agreement by the client.

Hourly Billing Rates

When legal services to be performed are to be billed on an hourly basis, the hourly rates or range of rates for lawyers involved (or expected to be involved) in performing work for the client should be disclosed to the client… as well as, if applicable, the existence of multiple hourly billing rates for the same lawyer depending on the type of service provided.

Minimum Time Increments

. . . Legitimate use of a minimum time increment may depend on how the lawyer records the balance of the increment.   Two fifteen-minute charges for two five-minute calls within the same fifteen-minute period seem inappropriate; some balancing should be used.

. . .

Learning Curve

Some clients have indicated that they do not wish to (or will not) pay for the cost of training lawyers or bringing them up the learning curve with respect to a particular substantive area of the law or a particular type of case or transaction.   Resolving this issue requires communication with the client in order to ascertain the nature of the concern.

Provision by the lawyer or law firm of cost-effective services to clients requires that certain tasks be performed by less experienced lawyers whose hourly billing rates are lower but who, in the judgment of the managing attorney on the project, have sufficient expertise and experience to perform such task.   Lack of experience should be appropriately reflected in a lawyer’s hourly rate.. . .

If the primary purpose of participation in a meeting or project by a less experienced lawyer in a law firm is to train such lawyer, then the lawyer’s time should not be billed to the client.

Staffing Considerations

. . . The touchstones for determining such issues as staffing should be cost-effectiveness and quality of legal service to the client.   Staffing should be discussed with the client if the client has expressed an interest in such information and must be disclosed if the lawyer has created an expectation that the matter will be handled by a particular lawyer or one with a certain experience level and such is not in fact the case.   . . .

. . .

In recognition of the value of continuity of representation, law firms should endeavor to staff a specific client matter with a relatively consistent team of lawyers.   If a change must be made in a critical member of the team (other than in response to a client request), and this change necessitates any significant expenditure of time by the new member of the team in getting up to speed, counsel should make appropriate downward adjustments to the fees billed in such matter to avoid unreasonable charges to the client.

• Overhead:  Prof. Yabut says: The more overhead your lawyer has, the higher your fees are likely to be.  Don’t confuse a fancy location or office suite with better service or value.

REVIEWING YOUR BILLING STATEMENT:  In “Reviewing A Law Firm’s Billing Practices” (The Professional Lawyer, Fall 2001), mediator and arbitrator Gerald F. Phillips reviews billing statements received by a client from a law firm.  In discussing the problems he found, Phillips gives us useful concepts to keep in mind when determining whether hourly charges are reasonable or should be reduced or eliminated.  For example, Phillips discusses issues involving rounding up and incremental billing [see the excerpt quoted above].  Here are other topics covered, with select excerpts (emphases added):

C. THE BLOCK-BILLING CONCEALED THE ACTUAL TIME EXPENDED AND FACILITATED BILL PADDING

“Block-billing, assigning one time charge to multiple
tasks is a practice that is almost universally disapproved.”
U.S. Business Litigation (at page 16). It is disapproved
because it allows a lawyer to conceal the time spent on each
task and prevents the determination of whether individual
tasks were performed within a reasonable period of time. In
this case, this practice also enabled the attorneys to round
up and to bill more often for a half or full hour.

Billing Statements should show clearly the amount of time incurred with respect to each task and that information should not be concealed by such devises as block-billing.

D. THE EXCESSIVE REVISIONS WERE UNNECESSARY OR WERE REQUIRED BECAUSE OF THE POOR QUALITY OF THE ORIGINAL WORK

The Statements indicate that it was the regular practice of
the Firm to have attorneys repeatedly review and revise the
work product of others. This practice generated larger fees.
If the constant “reviewing and revising” were necessary, then
the original work was not of the quality that a first rate firm
should perform. If this was the case, the firm should not have
billed you fully for both the poor quality original work and
for the time spent in making the revisions. If the tasks were
given to inexperienced young attorneys, you should not have
been billed for their training. Billing partners, when review-
ing statements, often write off time that they recognize as
excessive and the result of an associate’s inexperience.

E. THE EXCESSIVE RESEARCH AND THE REPETITIVE TASKS SHOULD NOT HAVE BEEN REQUIRED

For a Firm that specializes in the type of law required in
your case and holds itself out as having that expertise one
must wonder why so much time was spent and so many revi-
sions made on what should have been routine matters for
such a firm. . . . [T]he Firm may have misrepresented its expertise.

Some of the research appears to have been used to educate or train
young associates and should not have been billed.

F. INEFFECTIVE STAFFING SUBSTANTIALLY INCREASED THE FEES

The Firm used two partners and two associates on this
case. The Billing Statements show that others often
reviewed and revised the work and that there was excessive
conferencing. The charges for conferences often did not
indicate, as it should, the subject of the meeting.

G. THE BILLING STATEMENTS WERE VAGUE AND MEANINGLESS AND DISCLOSED REPETITIVE ENTRIES

Many of the entries were vague, such as “legal research”
or “Telephone conference with X”. Many entries were
repetitive such as “Review discovery” or on successive days
billed for “Review articles.” If “legal research” was done it
is incumbent on the attorney to specify the nature of the
research. Many entries are vague, especially since they were
repeated month after month. “Reviewing” “revising” and
even editing may have been used to permit gross padding.

PRACTICAL TACTICS for the Cost-Conscious CLIENT

Several lawyers have compiled tips for clients who want to keep their bills from ballooning. here are samples:

In his “Tips on Reducing Legal Fees,” Tennessee divorce lawyer David M. Waldrop says “Divorce is expensive. Nevertheless, there are ways to reduce your legal fees.”  His tips are good for divorce and other family law cases, and many of the notions can be applied elsewhere, too.   Here are a few examples:

1. Prepare for your phone calls.

. . . You are charged for every phone call with your lawyer. Remember, your lawyer sells time. Therefore, make a list of the topics you wish to discuss before you call so you will not forget what you wish to discuss. Also, call only when necessary.

Do not call your lawyer at home unless it is an emergency. Your lawyer does not have your file with him. Most lawyers charge double the hourly rate if you call them at home.

4. Fee disputes.  If you believe you have been over-charged, discuss it with your lawyer. If you are still dissatisfied, contact the bar fee dispute committee to mediate the dispute.

5. Keep your sense of humor. . . .  It will save you money by preventing you from litigating the non-essential points. If you are going to negotiate a settlement, remember both sides have to give to reach a settlement. Otherwise, no one wins but the lawyers.

6. Be responsible and don’t sweat the petty stuff.

“Reducing Legal Fees“  .. Both the website of Minnesota lawyer Maury D. Beaulier and the Separated Parenting Access & Resource Center offered a set of cost-cutting guidelines, under the following categories:

Keeping A File At Home
Organizing Documents and Filling Out Requested Forms
Compiling Questions

“You should also keep a notebook of any issues and questions that you have for your attorney noting the date of your question or issue in your notebook. When you have a sufficient number of issues or questions, you should contact your attorney for answers. By waiting until you have a number of questions at one time, you may significantly reduce your legal fees.”

Do Not Use Your Lawyer as a Therapist;
Focus on the Legal Issues
Don’t Try to Cheat

• Regarding telepone calls, the New York State Bar Association’s “Choosing a Lawyer” suggests:

“If you have agreed to pay the lawyer an hourly rate for work performed on your behalf, then the time it takes to stop working on another matter, retrieve your file and consider the questions that you pose over the phone would be properly billed to you. Therefore, while you should contact your attorney when necessary in the context of the case, you should not do so on the spur of the moment. Make a list of matters that need to be discussed and speak about all matters at one time. If a paralegal can help you, do not insist upon speaking with the lawyer.”

.. For a scholarly-but-practical treatment of the ethics of hourly billing, see “The Honest Hour: The Ethics of Time-Based Billing by Attorneys” by William G. Ross  (280 pages. 1996).  The publisher’s synopisis says: “The Honest Hour explains how attorneys and their clients can work together to develop fee agreements that will give attorneys enough time to produce quality work while guarding against practices that exploit clients.”  And, check out Prof. Ross’s eye-opening surveys, including his 2006 – 2007 Survey.

Nolo’s IEP Guide , by Lawrence M. Siegel, was written to help parents of children with learning disabilities through the Individual Education Program process.  His suggestions, however, have a much broader application:

Be organized.    “Especially when you are paying by the hour, it’s important to gather important documents, write a short chronology of events, and consistently explain the problem to your lawyer.  Keep a copy of everything you give to the lawyer.”

.. Be prepared before you meet your lawyer.  Whenever possible, put your questions in writing and mail, fax, or deliver them to your lawyer before all meetings or phone conversations.  Early preparation also helps focus the meeting so there is less chance of digressing (at your expense) into unrelated topics.

Carefully review lawyer bills.  Like everyone else, lawyers make mistakes.  [like transposing figures] . .. Don’t hesitate to question your bill.  You have the right to a clear explanation of costs.

Ask your lawyer what work you can do.

Listen to your lawyer.  . .. But large legal bills are sometimes the result of clients losing track of time or ignoring advice. . . . As a client, you should not be afraid to question your attorney’s recommendation.  But part of what you’re paying for is reasonable and objective advice, — and when your attorney says not to waste time on an issue, you should probably listen.

Stuart M. Saft wrote “Reducing Legal Fees: A Ten-Step Program” (Habitat Magazine, November 2006) for the board and management of cooperatives and condominiums.  Often, however, his good advice has broader application.

1. The Board Should Not Be Paying to Educate the Attorney

. . . If your attorney has not dealt with a similar issue, ask if someone else in the office has and could handle the matter. You can also consider referring that particular matter to a law firm that does have experience in the area. Using another attorney for a particular matter does not mean that your relationship with the old attorney has to end.

As an alternative, ask your attorney to bill the start-up time at a discount.

2. Don’t Micromanage the Attorney

Several times I have seen the board members or the managing agent call the attorney daily to discuss the status of the matter and to offer suggestions and to cross-examine him or her on how the matter is being handled. This adds significantly to the cost  . . .

3. Appoint a Legal Liaison.  There is nothing more important that having a single point of contact between the board and the lawyer. . . .

4. Listen to the Lawyer 

If your attorney responds to an inquiry by noting that it is forbidden to do something based on the language of the proprietary lease, bylaws, or declaration, then it its not productive to beg or to demand of the lawyer that he or she not object to this thing being done. These documents are written in English — or at least legalese — and they are decipherable. Ask the lawyer to point out the specific language that creates the objection and review it yourself to see it you agree with the interpretation. Then, if you don’t, call the lawyer to see why he or she believes that it says what you don’t think it says.

7. Use Junior Partners, Associates and Paralegals

8. Not Every Principle Is Worth Litigating Over

. . .  Lawyers make money representing clients, so if your lawyer is attempting to dissuade you from bringing a lawsuit, perhaps you should listen. Most of us will bring a lawsuit if the client insists, but we try to talk them out of it first.

9. Don’t Litigate Based on Judge Judy

10. Blame the Lawyer

. . .  just say that you wanted to be tough and fight for truth, justice and the American Way, but the lawyer would not let you.

Contingency Fees:

Understanding Attorney Fees has remarkably little to say about contingency fees — and virtually no advice for reducing the often-excessive fees. Here’s the core discussion:

“Contingency fees.   In this type of fee agreement (used mostly in personal injury or collections cases in which the client can’t afford to pay if the case is lost), the attorney receives payment only if she wins the case, although the client usually must still pay any expenses an attorney incurs because of pursuing the case.

“This is an all-or-nothing proposition—either the client wins and the attorney is paid, or the client loses and the attorney walks away unpaid.  The theory behind contingency fees is simple.  The attorney takes the risk of losing; the greater the risk of losing, the bigger the percentage.  If you win, the attorney is highly compensated on the theory that he must also absorb losses on contingency fee cases that didn’t succeed.”

“The customary contingency fee is 33 percent of the settlement, although fees range from 15 to 50 percent.  Some lawyers offer a sliding scale in which the percentage changes depending on the stage at which the case is settled.  For example, the lawyer may collect 25 percent if you settle before trial, 30 percent if there is a trial and 40 percent if there is an appeal.”

” . . . make sure you ask that the attorney’s percentage be calculated after expenses have been subtracted from the award.  This can result in significant savings for you.”

Although it states “the greater the risk of losing, the bigger the percentage,” the statement in UAF offers no clue on how the client is to determine the degree of risk his or her case poses for the law firm (the likelihood of winning and earning a fee that adequately compensates for the firm’s efforts and expenditures).  As mentioned in the opening segment of this post, HALT appears to have abandoned its campaign to bring fairness to contingency fees, by giving clients enough information about the lawyer’s risk that they can negotiate lower fees.  Instead, UAF seems to capitulate to the standard contingency fee, which is forced upon virtually every personal injury client.

In 1999, HALT’s executive director James C. Turner talked to Washington Post columnist Don Oldenburg about standard contingency fees.  The Consummate Consumer column for March 3, 1999, titled “‘Standard’ Legal Fees”( $$ article preview) reported:

“Last summer, HALT, a District-based legal reform group, launched its Legal Consumers Bill of Rights Project to inform consumers of their rights when hiring an attorney.  Among its consumer protection provisions is the client’s right to have an objective review of a contingent fee by a court or a bar association committee to assure it is reasonable and fair.  It also calls for written fee agreements in injury and death cases that cover the probability of winning, amount of award expected, number of hours of legal services required, out-of-pocket expenses the client will pay, and the availability and cost of alternative fee arrangements.”

HALT’s director told the Washington Post:

“It is a tragedy that people just swallow this one-third concept. Every consumer has a right to expect and demand that there be a relationship between the work that is actually done and the fee they pay.  You have the right to be informed of different fee arrangements.  Responsible and competent lawyers do that already, but there are bad apples in the barrel.

“The most important thing that any person needs to keep in mind is that they are the boss, and the terms of employment are negotiable.”

The December 1997 issue of HALT’s newsletter The Legal Reformer, which explains and contains HALT’s Injured Consumer’s Legal Bill of Rights is no longer available online. Luckily, I printed it out many years ago, and uploaded it to our webserver in pdf form.  The Injured Consumer’s Bill of Rights includes the right to have the lawyer’s good faith evaluation of the case prior to signing any fee agreement, including the following information, which must be incorporated into the fee agreement:

- the probability of a successful outcome;
- the amount of recovery reasonably expected in that outcome;
- the number of hours of legal services that are likely to be required to secure that outcome;
- the amount of any costs or expense that the client must bear:
- the availability and costs of alternative fee arrangements [such as allowing the client to pay a reasonable hourly rate rather than a contingency fee]

With this information, the client can understand how strong his or her case is and attempt to negotiate a fee level that adequately compensates the lawyer for the level of risk and amount of effort required, while  making sure the client wins and keeps all the money he deserves.  The standard contingency fee, on the other hand, is normally the maximum allowed in a jurisdiction for the particular type of injury, and treats every case as if it justified the maximum fee.  Thus, because p/i lawyers are usually very good at weeding out risky cases, injured clients often are forced to pay an unreasonably high fee.

The HALT “client’s rights” mirror those imposed on lawyers using contingency fees in a 1994 ethics opinion of the American Bar Association.  ABA Formal Ethics Opinion 94-389 ( $$ download from ABA; it is described here, along with a full discussion of the ethical use of contingency fees).  Those two sources (along with Florida’s contingency fee Bill of Rights), were the basis for f/k/a’s comprehensive Injured Consumers’ Bill of Rights for Contingency Fees.  Prospective clients can use the HALT Bill of Rights, the f/k/a version, and Op. 94-389 to discover the kinds of questions to pose when shopping for a personal injury lawyer.

Unfortunately, although trial lawyer associations, the Federal Trade Commission, and many courts have stated that contingency fees should correspond in each case with the level of risk (see our post, “risk matters“), most p/i lawyers have refused to give up the excessive fees that are generated using the standard contingency fee.

Flat fees are often a bargain, but never take that for granted.  Here’s what the HALT Guide says about Flat Fees:

“Flat fees.  Many lawyers and legal clinics offer flat fees for routine legal matters, such as for uncontested divorces, will preparation, business incorporation, lease preparation and some probate work—basically uncomplicated legal matters that involve filling out forms.  A flat fee means that you will be charged a specified total for work performed on your case, regardless of the time it takes to complete. . . . Often an agreement with a flat rate will require that the client also pay such “extras” as filing fees, photocopying and other out-of-pocket or unanticipated expenses.

“Flat fees are charged when lawyers can accurately predict the average amount of time a case will take. . . . Recognize, however, that a flat fee often reflects an hourly rate, so ask how much time the work will take, include this estimate in your agreement and choose an hourly figure if the math is in your favor.  Usually, however, flat fees turn out to be bargains because when the work is repetitive and time-saving forms are used, the savings are passed on to clients.”

f/k/a Note: Yes, do the math and compare prices. One fixed-fee advocate recently told his weblog readers “Sophisticated clients who insist on hourly billing do so because they’re smarter than you are, not because they want you to be paid fairly.”  That lawyer admitted at his weblog that he had switched to fixed fees to avoid passing on efficiency savings to clients.

“Flat fees allow you to shop around among lawyers if you have a routine matter.  Ask what specifics the flat fee covers in each case to be sure the various attorneys are offering the same services for the quoted price.  In other words, if one lawyer’s flat fee includes copying costs and another identical fee does not, the first lawyer is more economical.  If you agree to a flat fee, make sure your agreement specifies exactly what the fee covers as well as any costs not included.”

f/k/a Cautionary Note: Lawyers will often switch between hourly and flat fees for their own advantage.  For example, many lawyers (e.g. in Family and Criminal matters) find themselves at court with several clients at the same time, doing motions, status calls, and sundry non-trial matters.  Some would bill each client for overlapping time at court (charging, for example, $200 per hour to each of three clients for the same 60 minutes).  When they were told such multiple billing was unethical, a lot of lawyers started billing a flat rate for each court appearance — say, $500 to each of the three clients, instead of $200 per hour.  That could turn sixty or ninety minutes at court into a $1500 morning, whereas the three clients would have split a mere $600 tab paying by the hour, if the lawyer had spent a full three hours at court.  So, you might want to ask about hourly fees when a busy lawyer is piggy-backing clients at court.

The UAF section on Alternative Fees (which apparently does not include the separate category of Flat Fees) is particularly unenlightening:

“Alternative billing.  While not as common, some lawyers will use an alternative billing arrangement—for example, a lawyer working with a small business owner might offer a steep hourly or percent discount as a way to increase the volume of work he or she gets from that client.”

We can’t flesh out the topic of alternative billing here, but suggest you see our posts “other thoughtful voices on the lawyer billing debate” and “broadening the billable-hour debate” for information that can help you make smarter choices when looking at alternatives to hourly billing — remembering that each billing arrangement has both advantages and disadvantages for the client, and for the lawyer.  If hourly billing gives the lawyer the incentive to work too much, fixed fees give the firm the incentive to do less (they say “be more efficient”) for the client.  Indeed, if lawyers are really busy, they are less likely to be padding hourly fees, but more likely to be cutting corners for clients paying fixed fees. (see, e.g., our post “finally: NLJ on the realities of alternative billing,” Sept. 11, 2007)

Is time expended relevant? A cautionary point: Some lawyers have switched to alternative fees precisely because they want to charge more than they could with hourly billing.  They are unhappy that there are only 24 hours in a day to be used billing clients, and they would rather not pass efficiency savings along to clients. [See, e.g., this post.]  Yet, most clients — including you, if you’re reading this piece — want to move from hourly billing precisely to pay less, not more in lawyer fees.

Therefore, be wary of a lawyer who says the amount of time spent on your case or transaction is not relevant to the size of the fee.  You should want to know how much attorney time is likely to be expended on your behalf, when deciding on the reasonableness of a “value-based” or fixed fee, if only to better compare the fee to that of lawyers billing by the hour. And, because they owe you a fiduciary duty to fully inform you and treat you fairly, lawyers should be willing to tell you their best good faith estimate of the time it will take to provide the needed services (as HALT suggested in its Model Attorney-Client Agreement, which is discussed above).  Furthermore:

– In our economy and marketplace, the “value” of a product or service is not determined merely by how much the buyer needs or wants it.  Otherwise, computers would cost more now than than did 20 years ago rather than much less, because they are so much more central to our personal and business lives.  And, necessities like food, housing, gasoline, would be priced far higher than they already are.  A monopolist may decide to charge without regard to his cost, but when there are lots of sellers competing for your business (as there are in the market for legal services in the USA, which has more than a million practicing lawyers), we expect price to stay close to cost.  For a law firm, the time a lawyer spends applying his or her knowledge is the main input or cost of the service.  And, for more than a century, time expended has been the primary criteria used in deciding the reasonableness of a fee under lawyer ethics rules.

– No mater how important it is for you to have a particular legal problem solved, if it won’t take much effort to fix the problem, or there are many attorneys who know how to fix it, the law firm is usually not adding much value in your situation.  At times, by analogy, all it takes to prevent a major accident or tragedy is to tighten a bolt.  Yet, you pay the mechanic or plumber who tightens the bolt a substantial hourly rate for the expertise it takes to diagnose the problem and turn the bolt, not an extortionist’s (or hero’s) fee for averting the calamity. The same is true for a doctor who saves your life with a simple tourniquet or by prescribing a common pill for a common but deadly malady.  Don’t buy the argument that the fee for lawyer services should be the same, no matter if it takes 30 minutes or 30 hours to perform.  Don’t let them change the definition of marketplace value from “a good product at a reasonable price,” to “whatever you are willing to pay to solve your problem.”

“Certainty Premium“?   Some lawyers charge a “premium fee” higher than what they believe a client’s hourly bill is likely to be, and justify it by saying they are giving the client “certainty” and taking the risk of having to do more work than expected.  Certainty can be very important for some clients and worth a higher fee; and risk can warrant a law firm charging a higher fee. But, most clients seeking alternative billing arrangements are not interested in “certainly paying a lot more” than they were likely to have paid by the hour.  To know whether a higher Certainty Premium is worth the price, you need to know how much you most likely would be paying with an hourly billing arrangement, and how likely it is that the hourly fee might be significantly smaller or a lot bigger than the fixed “premium fee.”

Therefore, before entering into a fixed fee agreement that includes (implicitly or explicity) a Certainty Premium, the lawyer owes you a good faith estimate of the range and probability of likely fees. [For example: Given your situation, the most likely hourly fee, and how likely an hourly fee could be half of that estimate, or could be twice that estimate.]  You can be sure that the lawyer charging you a fixed fee is making those estimates (if only rougly in his or her head), and has weighted the price to minimize its risk of underestimating the amount of work that needs to be done.  Until you know the range and probability of higher and lower fees, you really can’t make a rational decision to pay a Certainty Premium.

We hope the information above will help clients to avoid unnecessarily high legal fees.  (Sadly, they will still, in general, be painfully high.) Don’t be too shy to ask the questions and (politely) assert your rights.  Remember, lawyers have ethical and fiduciary duties to fully inform clients and to charge only reasonable fees.

• Final Note: Criminal Defense Fees:  These days, most private criminal defense lawyers provide their services on a fixed fee basis, but many also use hourly billing arrangements; they’re  not allowed to use contingency fees.  We won’t try to cover this topic here, except to say that we  disagree strongly with Brian Tannenbaum’s assertion in his e-book The Truth About Hiring a Criminal Defense Lawyer, that a client should never ask a lawyer if he charges a consultation fee and “never negotiate,” because you’ll be perceived as cheap or unsure whether he is worth his fee.  There are too many lawyers competing for your business to put up with one who is so cavalier about your financial distress.  As Mark Draughn said when he reviewed Brian’s e-booklet, “Everything is negotiable. It’s just a conversation.” [We can't vouch for them, but you'll find materials on criminal defense fees here, here, and there.]

note: this is #4 in our final week’s erratic ALF Series on American Legal Fees; click for #1; #2; #3 . .

It’s my last week of posting, so I’m going to indulge myself and discuss a pet peeve or two of mine involving the rhetoric of lawyers and consultants who dislike (and often scapegoat) the billable hour.  Rather than sticking with logic, reason, or economics, they often employ hyperbole, overkill, psycho-babble, Straw Men and class warfare (not to mention ridicule).  As discussed below, they even insist that being paid by the hour demeans a lawyer.  Please.

Thus, as mentioned last week, Ron Baker’s acolyte and echo Christopher Marston recently insisted that “there is not a single customer that wants to buy an increment of our time. Increments are excrement.”

Of course, I’m not an excrement expert (and Mr. Baker has accused me of ranting and raving and being “someone who lacks a rudimentary understanding of basic economics.”), but the not-buying-time cliche is just a silly Straw Man.  The client who pays by the hour, like anyone who employs a lawyer to do legal services, “wants” the lawyer to apply his or her legal knowledge, expertise and experience to the client’s problem or project.  Hourly billing is simply one way to compute compensation in a situation where the buyer does not employ the service provider exclusively (and the amount and type of services needed may not be reasonably discernible in advance).  As Prof. Jeffrey Lipshaw recently wrote:

“The real question is whether, overall, the total price approximated by billable hours is an acceptable surrogate for the value to the client. . . . [M]y intuition as a former buyer and seller is that the overall acceptability of the surrogate is indeed revealed by the overwhelming instance of its use in the market.”

Similarly, Steven Matthews pointed out at slaw.ca last year, in “The Economist: Killable Hour” (September 1st, 2008):

“Neither party seems to care that much about the billing model. Cost certainty? yes. Getting value? yes. Those are worth fighting for, but method of billing? If clients or firms were demanding changes, wouldn’t we have seen it by now?

“The push-pull between clients & firms when negotiating price (and understanding costs, for firms…) is going to exist in either scenario, and frequently depends on the situation. Think: area of practice, work volumes, the substance & length of client-firm relationship, average time for matter execution, and so on. But rather than describing this balance to readers, the sensational prevails – pitting one billing model against the other in a full-on death match! I suppose it’s not sexy to say ‘different clients & matters may require different billing models’. A shame, really.”

At times it is a reasonably good measure of the value of those services, and at times it may not be.  More price competition is needed for hour rates, and abuses need to be eliminated, along with excessive quotas imposed on lawyers by their firms.  But, hourly billing is clearly not an inherently irrational, exploitative or unethical method for calculating price.  By painting hourly billing as the benighted source of all evil, proponents of alternative pricing methods hurt their credibility — especially, when they fail to acknowledge there are incentives inherent in every pricing method that could lead to unreasonably high (or low) fees. (see e.g., ALF#1; and our post “broadening the hourly billing debate“)

.. Mauled by Marxism! Demeaned by Da Man! Ronald J. Baker (see prior post), the guru of “value pricing” and ceaseless crusader against hourly billing, isn’t content with his price sensitivity charts and promises of higher fees in his quest to convert lawyers and accountants from the Almighty Hour.  Ron motivates poor downtrodden professionals with his brand of class-based snobbery.  He urges them to rise up to capture their true (higher) value by labeling hourly billing as Marxism, and contrasting his superior “knowlege workers” with mere “cattle,” “union workers,” “blue collar occupations,” and those who “work with their hands” rather than their heads, and are stuck laboring by the hour (see, e.g., here and there).

Meanwhile, the usually level-headed and clear-minded Bruce MacEwen of Adam Smith Esq, recently evaluated the billable hour (in “The NYT’s Obit for the Billable Hour“, January 31, 2009).  Included in Bruce’s “Con the billable hour” list is this factor:

“It’s dehumanizing, reducing talented and highly educated professionals to fungible units as factors of production.“

In addition, conflating the issue of hourly billing with the problem of the grossly excessive billable hour quotas imposed by many firms, Bruce goes on to say: “Lawyers have every incentive to work day and night, and no incentive to recharge their batteries . . . We can debate whether, in the long run, this will produce pale and narrow automatons or whether utter and uncompromised dedication to a profession, 24/7, is the only route to serious excellence, but the point is that decision should be made by each individual with free will unfettered by the hands of a stopwatch.”

The greed that has led to over-blown billable quotas is a separate issue from the appropriate use of hourly billing to arrive at fees.  Indeed, as we said years ago in the post chronomentrophobia, “from the perspective of the overworked associate or partner, there is nothing wrong with the billable hour fee system that is not very likely to be carried over to any alternative billing arrangements, so long as the firm expects the shift to be made without reducing its income or profits, and the lawyer expects the same income.“

In a nation where the vast majority of both blue and white collar workers receive their income based on intervals of time (hour, year, week, etc.), is being paid based on time expended really a demeaning remnant of Marxism?  That’s silly, at best; unseemly manipulation, at worst.  Many of the most talented and respected people I know are paid according to a clock or calendar.  And, many members of the public (myself included) believe that a larger percentage of “blue collar” workers than of lawyers perform truly valuable services.

Consider:

• Most of us would not be the least bit insulted if an employer or customer wanted to hire us on an exclusive basis for a year, a month, a week, or as long as a particular project took, and offered to pay us based on an appropriate interval of time.  We might want to suggest an alternative way to calculate our compensation (e.g., a flat fee, adding bonuses for success, splitting profits), but we would not be insulted.
• Why does it become demeaning then, when someone who will not get your services or time exclusively — because you will be working for other clients or employers, too — suggests compensation based on hours worked?  In two words: It doesn’t.  Period.

By the way, even when a law firm is being paid under a “non-demeaning” alternative method of pricing, I bet their associates are getting paid based on an interval of time.

It’s naptime.  I’m setting my alarm clock.

note: this is #3 in our final week’s erratic ALF Series on American Legal Fees; click for #1 and #2 (hmmm, that sounds scatological); and #4 -

While I was in law school, bar association Minimum Fee Schedules went from being commonplace, apple-pie, “old-time rock-n-roll” in the legal profession, to being Risky Business in violation of antitrust law.  The fee schedules were lists of recommended minimum prices for common legal services.   Through disciplinary actions and ethics opinions, bar associations made it clear that a pattern of charging less than the minimum fee constituted misconduct.  See, for example, this NY Bar ethics opinion from 1964; a 1961 Colorado Bar opinion; and the Virginia Bar opinion discussed by the Supreme Court at Fn 1. in Goldfarb.  The president of the New York Bar Association had himself requested the 1964 opinion concerning departures from the minimum fee schedule, and his so-called ethics committee agreed with him that:

“[T]o let it be known, by whatever means, that a lawyer will customarily charge for his services less than the recommended fees set forth In a duly adopted schedule is not in accordance with Canon 12 and is unethical as a form of solicitation and advertising.”

At the end of my 2L year, the Supreme Court’s decision in Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975), closed the book on those quaint little non-compete clauses, holding that the Fairfax County Bar Association’s minimum fee schedule was price-fixing in violation of §1 of the Sherman Act.  Until then, bar groups had gone around saying they could do whatever they wanted regarding fees, because there was a blanket “learned profession” exemption to the antitrust laws, and that they also had State Action immunity for conduct permitted by state courts in overseeing the legal profession.  However, as the case Goldfarb syllabus explains.

“The schedule and its enforcement mechanism constitute price-fixing, since the record shows that the schedule, rather than being purely advisory, operated as a fixed, rigid price floor. The fee schedule was enforced through the prospect of professional discipline by the State Bar, by reason of attorneys’ desire to comply with announced professional norms, and by the assurance that other lawyers would not compete by underbidding. . . .

“. . . It is not enough that the anticompetitive conduct is “prompted” by state action; to be exempt, such conduct must be compelled by direction of the State acting as a sovereign. Here the State Bar, by providing that deviation from the minimum fees may lead to disciplinary action, has voluntarily joined in what is essentially a private anticompetitive activity, and hence cannot claim it is beyond the Sherman Act’s reach.”

While in law school, we discussed the fee schedules a little bit in my Professional Responsibility class in 1974 (where my famous Harvard Law professor believed lawyers should not be allowed to advertise), and much more in my antitrust classes. [Thereafter, for more than a decade at the Federal Trade Commission, my law practice was focused on the anticompetitive practices of learned professions like medicine and law.]

I’m bringing up this topic now, before we close shop here at f/k/a, because I’m afraid far too many members of the legal profession (and virtually all of the public) have forgotten this chapter of lawyer history and lessons to be drawn from it and its aftermath.   A lot of lawyers reading this weblog have suggested the f/k/a Gang is far too suspicious of bar associations and lawyers when it comes to fees and competition.  But, I want the “don’t be such a cynic” crowd to remember the Minimum Fee Schedules and what they say about our profession.  For me, history (including rather recent history at that) clearly shows:

• lawyers almost always feel underpaid and entitled to higher fees
• lawyers hate competition, especially price competition and related advertising, and will use peer pressure and ploys like an appeal to the “dignity of the profession” to stifle rivalry
• lawyers will exploit any pricing mechanism (turning it into a racket) — and will always find new ways to increase fees when one method of billing becomes disfavored

You might protest that there must be a good, client-centered motive behind the adoption of Minimum Fee Schedules. Surely, as conspiring doctors often claimed (unsuccessfully) during antitrust investigations over the past three decades, it was done to assure that services were of a high quality and consumers protected from slipshod work.   Well, I think the experience of the Wisconsin Bar was typical, and folks there were nice enough to compose a history “History of the Organized Bar in Wisconsin“, which includes an entire Fee Schedule chapter. Chapter Nineteen begins like this (emphasis added):

“For a hundred years after statehood Wisconsin lawyers were inadequately compensated. . . . [M]ost of the lawyers who became well off did so through side ventures. Much of the fault lay in a haphazard system of charges for service.”

The discussion goes on to tell about early efforts at devising fee schedules.  It started with a “Fee Bill” in 1844, signed by a dozen lawyers in Milwaukee County.  Then, after many forms and revisions, by 1959:

“The American Bar Association’s committee on Economics of Law Practice hammered hard at the economic plight of the profession and what could be done about it. The post-war lawyers were keenly aware of the poor economics of the profession. The stage was set for an event that had far reaching impact on the lawyers’ pocketbooks.

“The fee schedule was extensively revised in September 1959. . . . [T]he Executive Committee voted to publish and distribute to all 6,000 members a “Minnesota Type” fee schedule book. . . .  Binders were procured, the schedule printed, and it was shipped to all lawyers and judges by Feb. 1, 1960.

“The new schedule of minimum fees hit the Bar like a welcome rain on parched fields. Partly because of the attractive binder and the ease with which the schedule could be used, within six months the recommended fees became accepted statewide as the reasonable and customary minimum charges for lawyers’ services. The fee book urged the members to recognize that an average charge of $18 per billable hour was necessary if the lawyer wished to net, before taxes, but after payment of overhead costs, about $14,500 per year.

“The impact of this new schedule was estimated to have raised the lawyers’ incomes by 25 percent to 50 percent within three years. Coupled with new law office management techniques, the lawyers were well on their way out of the financial morass that they had suffered through for 100 years.”

Chapter 19 then discussed the demise of the Fee Schedule due to antitrust scrutiny:

“While the fee schedule was never designed to be other than a guide to fair charges, and only minimum charges at that, an opinion by the Ethics Committee to the effect that continued, flagrant, and publicized fee cutting was in effect a form of advertising and as such a violation of the Canons of Professional Conduct, undoubtedly led many to fear sanctions if they cut fees. The State Bar did formally change the name of the schedule from one of minimum fees to a “customary fee guide” in June 1972, but this came too late to save the schedule.

“Although republished and clearly designated as a fee guide, and not mandatory or compulsory, this did not satisfy the federal officials that the anti-trust implications of fixed fees had been eliminated. The anti-trust division of the U.S. Department of Justice “opened a file” on the State Bar late in 1972, and notified the Executive Director that suit would be commenced to force discontinuance of the fee schedule. . . . Within the year, acting under similar pressure, almost every state bar had repealed its fee schedule.”

Was the Wisconsin Bar suddenly plunged into a blood-bath of discounting and rate cuts?  Of course not, we’re talking lawyers.  Instead, from the perspective of the organized bar, “This repeal had an unanticipated favorable result.” To wit,

“What happened was that there had been massive shift to keeping time records and charging based on time. This shift was largely due to the revision of the schedule. This not only produced greater income but fairer fees to the clients.”

Even better, once the Goldberg decision (with its huge monetary penalties), “clinched the doom of all fee schedules, mandatory or advisory,” lawyers across the State were soon encouraged to raised their hourly fees:

“Following the abolition of the fee schedule, the Wisconsin Supreme Court gave the bar something even better. In a case involving fees for criminal defense, the court recognized in its opinion that a fee of $45 an hour was entirely proper as being the prevailing average rate. Coupled with the bar’s shift to time records and hourly charges, this pronouncement of the court was a welcome reinforcement to the fees being charged.

“In retrospect, the adoption of fee schedules by the bar association were, in light of the times and conditions, both essential and useful. The sad state of the bar economics in the early 1950s, fraught with non-businesslike practices and lack of record keeping, made the publication of the fee schedule book in 1960 timely and helpful. . . .  By the time the anti-trust attack was mounted, the fee schedule had accomplished its purpose, and undoubtedly had outlived its usefulness.”

In concluding the chapter, WisBar pats itself on the back and exclaims: “The economics of the bar had turned around and the State Bar was instrumental in bringing it about.”

Is the era of income-raising Fee Schedules and its melding into the epoch of higher-still “prevailing hourly rates” just ancient history, irrelevant in the enlightened 3rd Millennium?  I doubt it.  Almost every observer of the legal profession seems to believe it is significantly more commercialized and profits-driven than it was in the pre-Goldberg era. Clearly, more and more lawyers have no problem declaring publicly that they deserve to become very rich, to charge what the market will bear, and to leave none of the client’s money on the table.  And, they are aided and abetted by marketing experts who tell them they are under-valuing their services and need to manipulate images and perceptions to reap premium fees.

Despite market forces that in any other industry would bring vigorous price competition (i.e., an over-supply of providers and dwindling number of buyers able or willing to afford their services; consumers better educated and more assertive than ever of their rights in the marketplace; and technological advances that reduce the labor needed to produce their product and allow buyers to do much themselves or use less-costly providers), we see bar members advising each other not to give discounts, and we see no marketing based on price (except for those who try to stand out by charging more than their rivals).   And, we continue to see bar associations acting like guilds.  For example:

• As mentioned in a post earlier today, the Ohio Bar modernized its ethics rules in 2007, by moving its ban on advertising discounts from the body of its rules to the comment section.  See Comment to Ohio Bar Rule 7.1, and our post “we need more low-fee lawyers (even in Ohio)” (March 22, 2006).
• Meanwhile, the American Bar Association revamped its rules on legal fees in its Ethics 2000 project, to deny injured consumers protection against unreasonably high “standard contingency fees.”  (See my 2002 Open Letter to the FTC)

• The President of the New York State Bar Association proposed far stricter advertising rules in 2006, saying he wanted to limit lawyer advertising “to the fullest extent permitted, within the limitations of the First Amendment.”  See our prior post. And the Bar Association passed it, seeking to preserve lawyer dignity.

• Faced with nonlawyer suppliers of services such as real estate closings, and fearing that giving consumers more choices would drive down prices, the Massachusetts Bar rejected the advice of the U.S. Justice Department and the Federal Trade Commission and voted for the broadest definition of “the practice of law” — and therefore of the “unauthorized practice of law” — in the nation.  See our post “bar & guild.”

There’s no reason to think the legal profession has changed its stripes or its priorities.  No reason to think lawyers will compete for clients on price.  Therefore, please don’t forget that, for over a century and until forced to stop, the self-regulating organized American Bar decided to mandate minimum fee schedules when its members felt underpaid.  And, it did it under the hypocrite’s banner of professional responsibility and ethical obligations.

ALF: But, Yabut, why can’t the Melmac Bar & Grill sponsor the Feline Protection League?  You know how important cats are to us.

Yabut:  For snacks and meals, you mean.

ALF:  Like we tell them, “we always serve you first.”

- note: this is #2 in our ALF series on American Legal Fees; click for #1 and #3 and #4-

The f/k/a Gang has been writing about the lax, self-regulated lawyer discipline system since we started this weblog in the Spring of 2003. [See Should Lawyers Control Lawyer Discipline?, June 22, 2003, and links on our Lawyer Disciplinary System Page.]  Sleepy Bar watchdogs often seem to be enabling their lupine cousins rather than protecting the sheep. Like the legal reform group HALT, we believe our nation should:

“Replace the failed system of self-regulation — lawyers policing lawyers — with disciplinary panels on which non-lawyers have a majority voice.” [see our post HALT Suggests a "Better Way to Discipline Lawyers" (June 25, 2003)]

For more, see HALT’s 29-page (pdf) paper “Consumers of Legal Services: Unprotected and Underserved,” which notes: “The system of attorney self-regulation is an abject failure and lawyers’ so-called ‘Rules of Professional Responsibility’ do not require attorneys to provide even the most basic consumer information to prospective clients.”  HALT urges the broader consumer advocacy community to join their efforts to help achieve “Simple, Affordable, Accountable Justice for All.”

Foxes in the Chicken Coop:   We’ve spent 6 years complaining about bar associations that act like mercantile guilds, by protecting lawyers from competition rather than clients from greedy lawyers. There is, in fact, no better reason to junk the self-regulatory system utilized by the legal profession than its utter failure to take its ban on unreasonable fees seriously.  In most jurisdictions, the rule against excessive fees has devolved in practice into a ban on felonious,  fraudulent, or otherwise dishonest billing (e.g., billing for phantom hours, charging more than one hourly-fee client for a particular interval of time, keeping unearned retainers).

Except for judicial review in million-dollar cases, the monitoring of excessive fees by the legal profession has been basically delegated to Lawyer-Client Fee Dispute programs.  When HALT reviewed such programs state-by-state in 2007, and issued Fee Dispute Report Cards, it found:

“The most pervasive complaint about lawyers is that their fees are too high for the work done. But in evaluating the programs established to settle these disputes between clients and lawyers, our Report Card found a system plagued by an appalling pattern of biased procedures, insufficient resources and little enforcement.” And,

“By allowing lawyers to refuse participation in the fee arbitration process, hiding information from the public about the system, placing roadblocks in front of consumers wishing to resolve a fee dispute, stacking arbitration panels with attorneys and refusing to assist clients in recouping their money, fee arbitration programs across the country are routinely failing to provide a much-needed service to American legal consumers. Until there is meaningful reform, the legal profession has only itself to blame for the widespread public belief that lawyer fees are out of control and going unregulated.”

If self-regulation isn’t to blame, how else can we explain:

• So Little Guidance from the Bar or Bar Counsel on How to Avoid Hourly-Billing Excesses and Abuse: You have to look pretty hard to find actual, practical discussion from bar associations or official bar sources on how lawyers and firms can properly use hourly billing.  (One exception, which itself could use some amplification, is the 1996 Statement of Principles from the ABA Task Force on Lawyer Business Ethics).  As a result, far too many lawyers seem to have forgotten that:

– Hours X Hourly Rate is meant to be the maximum that a lawyer can charge under an hourly billing agreement.  The figure is not automatic or set in stone but,  as the ABA Statement of Billing Principles says: “The lawyer is expected to use professional judgment in determining whether the number of hours spent on a matter is reasonable under the circumstances of the engagement” — e.g., making appropriate reductions for time that is not used in an eficient, cost-effective manner.

– Having multiple partners and associates billing their full hourly rates for attending a meeting or court session where they have virtually no active role is unacceptable.  In addition, as the ABA Statement of Billing Principles says, “If the primary purpose of participation in a meeting or project by a less experienced lawyer in a law firm is to train such lawyer, then the lawyer’s time should not be billed to the client.”

– Excessive time spent reviewing and rewriting the work of other lawyers suggests that the original work was not adequately done and should not be billed at regular rates, if any.

update: See our valedictory post “understanding and reducing legal fees” (Feb. 28, 2009)

• Never sanctioning a firm for imposing excessive hourly-billing quotas on its attorneys (nor threatening to do so), despite the incentives created by such quotas to over-produce and pad bills, and the devastating impact on the lives of lawyers. See Sanction This (Firm)! (March 1, 2004).  As that post points out, when the ABA’s Ad Hoc Committee on Billable Hours produced a Model Diet meant as a “best practices” summary for law firms, its suggestion of “2300 Creditable Hours for Lawyers” per year would actually mean perhaps 60 hours at work per week for associate attorneys.
  

• Allowing the Standard Contingency Fee to continue, although its use is contrary to the history and rationale for the contingency fee, and often results in excessive fees not justified by the risk taken by the lawyer; see our prior post on ethical duties when using contingency fees.

Indeed, in 1994, a courageous panel of the American Bar Association challenged the use of standard contingency fees and percentages not related to the level of risk taken by the lawyer in Formal Ethics Opinion 94-389: Contingent Fees (1994; $$ download; discussed in detail here).  The ethics committee noted that  the principles were often “honored in the breech,” and called for the Bar to “redouble its efforts to assure that the ethical obligations associated with entering into a contingent fee arrangement are fully understood and observed.”  Instead, the personal injury bar used the ABA’s Ethics 2000 revisions to the model rules to undo Op. 94-389, by eliminating all phrases in official commentary to the rules that directly support the reasoning of the 1994 Opinion and adding wording that could be used to support standard contingency fees.  (See my 2002 Open Letter to the FTC)

• Maintaining Minimum Fee Schedules, and disciplining lawyers who charged less, until the federal government started suing bar associations for engaging in unlawful price fixing conspiracies. (see Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975); and this history lesson; more in “ALF #3: don’t forget those minimum fee schedules (,” Feb. 24, 2009)

In 2007, the Ohio Bar’s new ethics rules were promulgated, and they continue to ban the advertising of discount fees as being “misleading.” Comment to Rule 7.1 See our post “we need more low-fee lawyers (even in Ohio)” (March 22, 2006)

• Failure to discipline lawyers who engage in coercive boycotts aimed at forcing states (and taxpayers) to pay higher fees to assigned counsel — conduct that in fact violates antitrust laws. (see, e.g., our prior post)
  

• Overlooking Fiduciary Obligations:  When it comes to setting fees, you’d never know that lawyers were fiduciaries, with special obligations (far beyond arm’s length marketplace relationships) to fully inform clients and treat them fairly.  For example, many lawyers argue that their fiduciary duties toward the client do not kick in before the retainer is signed.  Very few “counselors at law” feel any obligation at all to advise clients about the existence of less-expensive options, such as unbundling, mediation, pro se resources on court websites.  (see prior posts “fees and the lawyer fiduciary,” and  “the lawyer’s fiduciary duty to disclose“).

• The lack of Consumer Guides to help clients fight for and obtain well-crafted retainer agreements that are, like HALT’s “Model Attorney-Client Agreement” (regarding hourly billing) “designed to secure the rights and stipulate the responsibilities of both the attorney and client.”  For the types of information that would help, see: “Retainer Agreements and Rule 1.5(b)” (Washington Lawyer, December 2008); HALT’s Injured Consumer’s Legal Bill of Rights (The Legal Reformer, December 1997), and the f/k/a Injured Consumers’ Bill of Rights for Contingency Fees. Such Guides or Model Agreements should be available to every client, and lawyers should have to make sure that potential clients have had the opportunity to read, use, and understand them, and negotiate appropriate retainer agreements.  Of course, if nonlawyers controlled lawyer discipline, lawyers would have to offer clients such agreements.

The United Kingdom and Australia have taken the regulation of lawyers away from the bar. (see this post, and this)  America’s legal consumers should also be able to trust that our watchdogs are protecting us chickens and our eggs rather than the foxes at the Bar.

p.s. Consumers need to protect themselves with information.  When it comes to fees, you may want to check out our last piece of legal punditry here at f/k/a: “understanding and reducing attorney fees” (February 28, 2009)

“Is there any reason to think the ‘like’ factor is different for law faculty success. At least in football there will be an objective measure of success and an opportunity to cut players. In law school hiring there are no measures and the initial hiring decisions are for lifetime jobs.”

Prof. Harrison concludes by opining that likability “sounds like a great approach if you are deciding who you want to go down to the bar with after school for a drink — which sadly may be the standard by which much hiring is done. It’s a disaster for the stakeholders of a law school.”

In response, Gabriella Montelle wrote “They Like Me, They Like Me Not” (February 12, 2009) at her On Hiring weblog on the Chronicles of Higher Education website.  She invited readers to answer two questions:

“Is likability a reasonable consideration in hiring, firing, and tenure decisions or do some committees place too great an emphasis on it? How does it factor into hiring decisions in your department?”

Montelle’s piece attracted a variety of responses, and one Comment by a “humanities doctoral candidate” ["HDC"] impressed Louisville U. law dean Jim Chen so much, he turned it into a separate posting at MoneyLaw called “You like me” (Feb. 13, 2009). [Chen's "Rocket man" post over the weekend about the remarkably valuable yet unselfish play of NBA player Shane Battier may also be related, as part of his ongoing talent versus character debate. via Simple Justice].  Commentor HDC’s insights included saying:

“The really good scholars are self-confident, and that confidence allows them to treat everyone else with respect and kindness. They are excited about ideas, and they are willing to share. Most of all, they are willing to collaborate — they are the ones organizing symposia, inviting guest speakers, cultivating graduate students, and just generally creating the kind of atmosphere where good work flourishes and everyone benefits.

Meanwhile, Jeff Harrison wrote “But will you love me tomorrow” (Feb. 13, 2009) in answer to Dean Chen, saying that in the faculty context likability or “niceness” is the code for “are you someone with whom I will be socially and politically comfortable.” He insists that “Nice in a faculty meeting is only slightly connected to morality, selflessness, or charity.”  Going back to the football analogy, Harrison concludes:

“If personal social and political comfort are critical in determining who gets an offer to join your faculty, it’s like a team thinking more about getting drunk together than winning games.”

An anonymous commentor then told Prof. Harrison that the football analogy was not as apt for a faculty as a comparison to a baseball team.  Using Barry Bonds as an example, he states:

“In other words, superstars are worthless if they create a bad vibe in the clubhouse. . . . but the point is, good scholars who aren’t good colleagues are not worth having around, and whatever is ‘good’ about their scholarship will be worthless if they aren’t the sort of person who can get along with colleagues, train students, and just generally make their work environment a pleasant place to be.”

In my experience, HDC and the anonymous commentor have it right.  As Jim Harrison suggests, faculty should not be trying to hire or promote only persons who fit within their personal socio-ideological comfort zone.  But, they would do well to look for colleagues who match brilliance with unselfishness and congeniality — or, to be more precise, a person who is “genial” in the sense suggested in Merriam-Webster’s definition:

3 a: favorable to growth or comfort . . . b: marked by or diffusing sympathy or friendliness
4: displaying or marked by genius

Naturally (this being the cranky old f/k/a Gang speaking), we do not mean “nice” like the smiley-faced gladhanders with gold stars for every student and colleague.  Nor do we mean “nice” in Harrison’s sense of “just like me,”  as sameness is boring and intellectual quicksand.  Law school faculties need bright minds willing to challenge individuals and institutions, and debate issues of law and policy — but, there is no reason to accept less than respect for eachother and agreeable disagreement. [You need, of course, to respect colleagues and students enough to ask hard questions and expect rigorous thinking.]

Law faculty jobs are far too desirable and desired for us to believe that faculty or students have to put up with jerks and selfish manipulators in order to assure brilliance in scholarship or in the classroom.   Because there are more than enough more-than-capable candidates, there should be a preference for the genial over the jerkish.  That preference may in fact turn out to be a wonderful tool for behavior modification.

In his posting 2007 “talent versus character,” Jim Chen notes how often others have been enablers, willing to justify the odious conduct of a faculty member by saying “He’s a smart guy. Brilliant, even.” That echoed my assertion that same year that:

[H]aving a high IQ is never an excuse for having a low EQ; it’s a reason to demand that our leaders (and our kids) demonstrate and nurture a robust “Emotional Intelligence.”

Daniel Goleman introduced most of us to the notion of EQ, in his 1996 bestseller Emotional Intelligence: Why It Can Matter More Than IQ. (well-reviewed here; click for a quick recap of the “Four Components of Emotional Intelligence“) . . . I’m still amazed at how many otherwise-sensible people are willing to overlook or excuse the emotional immaturity and ineptness of a colleague, friend or family member (and the harm it causes other people), if the low-EQ is attached to a significantly high IQ — and, especially, if accompanied by a large bank account or a powerful position. I think having a high IQ makes the failure to appreciate, nurture and develop ones EQ rather inexcusable.

It was two years ago this week that we wrote about Robert I Sutton’s then-new book “The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t” (Warner Business Books, 2007, and an identically-titled article in American Lawyer/Law.com (Feb. 20, 2007).  The article explains:

“According to Bob, an asshole is one who oppresses, humiliates, de-energizes, or belittles his target (generally someone less powerful then himself), causing the target to feel worse about herself following an interaction with the asshole. (And, as his examples prove, this behavior is not by any means limited to male perpetrators or female victims.) These jerks use tactics such as personal insults, sarcasm and teasing as vehicles for insults, shaming, and treating people as if they’re invisible to demean others. Sutton distinguishes temporary assholes . . . from certified assholes, who routinely show themselves to be nasty people. The latter, he argues, must go [from the workplace].”

A$$holes surely do not belong in law offices (even though many clients think they want such characters to champion their causes).  They’re even less appropriate in legal academia — especially, when their nasty little show is turned on “impressionable” law students, the very people paying their salaries.

Sutton’s book offers a 24-question self-test to see if you are “a certifiable asshole.” You can take Sutton’s Asshole Rating Self-Exam (ARSE) at Guy Kawasaki’s ElectricPulp website. Search and tenure committees might want to ask themselves how their candidates might fare if they took ARSE and answered honestly.

At her Chronicles of Higher Education weblog, Ms. Mentor advised last week that “They’re Out to Get Me: No matter how good you are at your work, your colleagues won’t keep you if they don’t like you” (Feb. 10, 2009).  She says this advice is especially important in perilous times like now, when jobs that once seemed secure seem quite shaky; and she asks whether “your colleagues already avoid you as a sour, combative personality — someone who’ll waste department energy on vendettas?”.  I’d like to think that law schools would insist on basic geniality from each of their faculty members in good times, too.  In the long run, their “stakeholders” deserve both brilliance and high EQ from every law professor.  There are far too many willing candidates to settle for any less.

p.s. Blawging with EQ: If you have a preference for thoroughness and straight-talk, and also wonder who’s been writing good material at lawyer weblogs, check out Mark Bennett’s Blawg Review #199, at his Defending People blawg.

We can’t promise you consistently high EQ here at f/k/a, but we’ll try our best.  What we do promise is consistently high-quality haiku.  For example, here’s another installment in our project presenting poems from past issues of Modern Haiku.  They’re written by poets who later became members of our f/k/a Honored Guest family. Here are more from Modern Haiku Vol. XXVIII: 1 (Winter-Spring 1997), which have not appeared before here at f/k/a:

almost 200 years of air–
in the room
George Washington died

…. by Gary Hotham – Modern Haiku Vol. XXVIII: 1

..

On the boardwalk
a blind man listens to the sea
finding its way back

… by George Swede – Modern Haiku Vol. XXVIII: 1

water splashing down–
the warmth of the sun
on my eyelids

little waterfall–
they come to see
why we’re not speaking

pushing in walnuts
with my heel–
autumn rain

… by Lee Gurga – Modern Haiku Vol. XXVIII: 1

fall rains
the spring
of mushrooms

tail tucked,
a collie skirts
the bungee jumpers

lunar eclipse
my son
whispering

.. by John Stevenson – Modern Haiku Vol. XXVIII: 1

moonless night
the darkness deepest
where the snowy owl was

… by Yu Chang – Modern Haiku Vol. XXVIII: 1

]]> http://blogs.law.harvard.edu/ethicalesq/2009/02/16/a-preference-for-congeniality/feed/ 2 http://blogs.law.harvard.edu/ethicalesq/2009/02/02/dont-let-a-bad-idea-go-statewide-sex-offender-residence-restrictions-in-nys/ http://blogs.law.harvard.edu/ethicalesq/2009/02/02/dont-let-a-bad-idea-go-statewide-sex-offender-residence-restrictions-in-nys/#comments Mon, 02 Feb 2009 21:27:18 +0000 David Giacalone http://blogs.law.harvard.edu/ethicalesq/?p=10549 .. Only one week after NYS Supreme Court Justice William Kelly struck down Rockland County’s sex offender residency law in the case of Peo. v. Oberlander (see our prior post), and in “direct response” to the decision, Senate Majority Leader Malcolm A. Smith proposed S.01300, calling the bill “Major Statewide Legislation Aimed to Protect Children from Sex Offenders” (press release, Jan. 30, 2009; reprinted at NewsLI.com).   Senator Smith’s legislation would prohibit a registered sex offender from living anywhere in New York State within 1,000 feet of a school building, park, or day care center, for at least ten years after release, and would impose criminal penalties for violations. (The press release was apparently rushed out before the actual bill was ready to post at the Senate website. update [6 PM]: Text of S.01300; bill summary)

Because Oberlander held that State law and policy pre-empted action by local units of government with regard to sex offender residency restrictions [SORR], and about 80 local SORR laws are on the books across New York State, some statewide action is indeed warranted.  What we did not need, however, was a stampede to spread residency bans that are a bad idea on a local level throughout the entire State.  [update: For example, the proposal in Colonie, NY, to ban sex offenders from living within 1500' of eachother.]

It takes no courage at all for a politician to support such residency bans.  It does take courage, and a deep sense of commitment to fair and effective government, to resist the temptation to “do something/anything” and make believe the problem is solved.

update (Feb. 2, 2009, 6 PM): The text of S.01300 has been posted.  It would be an amendment to Section 168-b of the correction law.  Under the new Sec. 168-W (1) “No sex offender shall reside in a residence that is within one thousand feet of any” school, building where day care is provided, or park.

The residency ban will last “for the greater of ten years or the period or term of probation, parole, conditional release or post-release supervision,” and “shall apply to sex offenders convicted or released on or after” the law becomes effective [sixty days after it becomes law].

Sen. Johnson is correct that having scores of local SORR laws has created a “confusing patchwork” that we “need to simply.”  But, he is also right when he says that we need to get our laws right.  Rather than calling for hearings to determine whether current State policy is wise and effective, and whether residency bans actually protect children, Sen. Smith and Sen. Craig Johnson have done the politically expedient thing and immediately moved to impose on the entire state a law that many law enforcement and criminal justice experts have found to be not merely ineffective, but actually counterproductive — and, which will put an expensive and time-consuming burden on law enforcement.

Senator Smith, along with Senator Johnson, has decided to mollify the excessive fears of some members of our community by taking rights away from a disfavored group, even after they have served their time and have met their parole or probation requirements, and with no regard to the actual risk presented by each individual offender.

Incanting “protection of children” and “assurances to parents,” Smith and Johnson are jumping on the residency ban “solution” with “Not a scintilla of evidence that residency restrictions protect children.” (Schenectady Gazette, “Legislators scramble on sex offenders,” by Carol Strock, Aug. 26, 2007, p. B1).  And, they’re acting in the face of analysis and evidence showing that the best way to prevent recidivism is to offer offenders a supportive social, supervisory, and therapeutic network, in a context where they are well-monitored and have relevant services readily available, along with the opportunity for stable employment, and the chance to re-integrate into society.

Forcing sex offenders out of the populated areas (away from family and friends, and with inadequate transportation and services) or into tiny sex-offender ghettos, makes it harder to achieve any of those goals, and therefore increases rather than decreases the chance of re-offending.  It also hurts the families of the offenders, and will surely upset the residents of the “disfavored” areas that fall outside the zones of protection.

Under the current system, local probation and social services officials have the responsibility to find appropriate housing for the most dangerous sex offenders, taking into account each offender’s situation.  That system is working well.  Despite the misinformation that comes from politicians and proponents of harsh treatment for sex offenders after they leave the justice system, the most recent sex offender recidivism study notes that:

“sex offenders are arrested and/or convicted of committing a new sex crime at a lower rate than other offenders who commit other new non-sexual crimes.” (Research Bulletin: Sex Offender Populations, Recidivism and Actuarial Assessment, New York State Division of Probation and Correctional Alternatives, May, 2007)

As I said in one of our first posts on the subject of residency bans, in 2007: 

The policy issues presented by sex offender residence restrictions are important for the integrity of our society. Notwithstanding the example of the current [Bush] Administration in Washington, we cannot react to fear (especially exaggerated fear) by unduly restricting the civil liberties of an undesirable or unpopular class of people.

We certainly should not be reacting to such fear with measures that are likely to make things worse. [See The Parson.net for a full discussion of why such bans are ineffective and counter-productive; and see the resources at the end of this posting.]  In response to the Oberlander case, the State Legislature should act responsibly and thoughtfully.  It should clarify that local government units do not have the authority to place residency restrictions on sex offenders beyond those already mandated by State law.  In order to best protect our children, the State should continue close monitoring and individualized housing decisions for dangerous sex offenders, while aiming as the long-term goal to reintegrate sex offenders into the community, as they show they are ready to accept the responsibility.

afterwords (Feb. 3, 2009):  In his coverage of the new bill last night, Prof. Corey Rayburn Yung at the Sex Crimes weblog has this interesting observation:

“The response provides an interesting contrast with New Jersey. In that state, several courts struck down residency restrictions on preemption grounds. However, as far as I know the state legislature didn’t make a political issue out of it. In New York, it seems like the legislature has taken a different approach. The state has been free to pass residency restrictions all along – so this seems like a basic attempt to politicize a court decision. I wonder if the bill will gain traction.”

It is very difficult to believe that Sen. Johnson is not already aware of the arguments against residency bans that keep a sex offender from re-integrating into society.  Should he or other legislators and policy-makers, or members of the public, want to learn more, they can go “below the fold”, where I’ve listed informative resources, along with excerpts and links from prior discussion at this weblog.

afterwords (Feb. 20, 2009): See our post on Peo. v. James Blair, in which an Albany City Court judge follows the Oberlander precedent.

Here are resources for understanding the issues raised by attempts to create permanent or long-term residency bans for broad categories of sex offenders around locations, like schools and parks, where many children congregate.

TheParson.net has compiled and produced a lot of information about Sex Offender Residency Laws.   Here is Rev. David Hess’s summary of the current State law on that topic:

New York State law  mandates as a condition of parole that Level 3 (high risk) sex offenders or those offenders with victims under the age of 18 may not reside within 1,000 feet of a school. The State also mandates as a condition of probation that Level 3 sex offenders whose victims were under 18 may not reside within 1,000 feet of a school.  These are the only state laws regulating where sex offenders may live.  [see text of the laws here]

And see his “Why additonal Residency Bans are ineffective and counter-productive.”

.. .. The 146-page Human Rights Watch Report “No Easy Answers: Sex offender Laws in the United Sates” (September 2007) includes a detailed discussion of Residency Restrictions on Sex Offenders, describing reasons for and experience with current laws, and the many issues raised by such restrictions.  In its Recommendations section, the Report states:

Residency Restrictions
Neither states nor localities should have residency restriction laws that apply to entire classes of former offenders. Authorized residency restrictions should be limited to individually tailored restrictions for certain offenders as a condition of the terms of his or her probation, parole, or other mandated supervision.

Also see: “How far can  – or should – communities go to restrict sex offenders?” (LOHud.com, by Nancy Cutler, Feb. 2, 2009)

We’ve discussed the issues often here at f/k/a, since the Schenectady County Legislature passed its sex offender residency restrictions [SORR] in 2007.  Click for a list of our major SORR postings.  Here are excerpts from a few of the relevant posts at f/k/a:

.from June 13, 2007:

. . . . You can find a very good discussion of issues presented by the residency restrictions on sex offenders by Lior Strahilevitz and many commentors at PrawfsBlawg’s “Sex Offender Residency Restrictions and the Right to Live Where You Want,” Aug. 3, 2005, and Michael Cernovich reviews many of the relevant legal issues at Crime & Federalsim, in his posting Doe v. Miller: The Legal Theories. Residency restrictions have been in the news a lot recently, and have been covered well by Corey Rayburn Yung at Sex Crimes (e.g., here), and by Prof. Douglas A. Berman, at Sentencing Law and Policy weblog. Last year, Prof. Berman pointed to “A potent and important prosecutorial statement against sex offender residency restrictions” (Feb. 9, 2006). The document was released by the Iowa County Attorneys Association, an organization of county prosecutors seeking “to promote the uniform and efficient administration of the criminal justice system.” In its five-page statement ICAA explains that Iowa’s broad sex offender residency restriction “does not provide the protection that was originally intended and that the cost of enforcing the requirement and the unintended effects on families of offenders warrant replacing the restriction with more effective protective measure.”

. . A valuable amicus brief to the Ohio Supreme Court is quoted in the Sex Crimes posting “Amicus Brief in Challenge to Ohio Residency Restrictions” (June 5, 2007). Among many cogent points, the brief argues that “the Ohio statute may increase the risk of recidivism by forcing many sex offenders to move from supportive environments that reduce the offenders’ risk of re-offending. See, e.g., Joan Petersilia, When Prisoners Come Home: Parole and Prisoner Reentry (2003; concluding that positive social support is critical to the success of released offenders).”

. . from our post of Aug. 9, 2007:

..  In his Schenectady Gazette column called “Schenectady’s imaginary predators” Carl Strock wrote:

“. . . [H]ere’s what I learned from no less an authority than Schenectady County District Attorney Robert Carney … In the past two years the district attorney’s office has processed 113 sex crime defendants and of those a mere six were registered sex offenders repeating their crimes. Further, of those six repeaters, only two were charged with offenses against children, and of those two, neither was accused as a stranger. They were both some kind of family members or acquaintances.”

“In other words in the past two years there has not been a single case of what the legislators (and many others) want us to believe is a tremendous social problem — serial ‘predators’ skulking around schools and playgrounds waiting to snatch away our innocent children for their perverted gratification.”

“Not a single case. So the panic is even more crackpot than I thought, or more cynical.” Carl Strock, Daily Gazette, Aug. 9, 2007.

. .  from our post of Aug. 23, 2007: (re: amendments to the Schenectady County SORR)

When I had my chance to speak, I hoped to reassure worried parents like Marincic and Legislators who felt they were letting such constituents down, by reading a few sentences from Residential Proximity & Sex Offense Recidivism in Minnesota (Minnesota Department of Corrections, April 2007):

“even when offenders established direct contact with victims, they were unlikely to do so close to where they lived. This may be due mostly to the fact that offenders are more likely to be recognized within their own neighborhoods. As a result, when direct contact offenders look for a victim, they are more likely to go to an area relatively close to home (i.e. within 20 miles of their residence), but still far enough away (i.e., more than one mile) to decrease the chances of being recognized.”

I also opined that (when concerned parents voiced their fears about living near sex offenders and insisted they be removed from their neighborhoods), the Legislators should have showed sympathy for the fears, but insisted that the laws they wanted would be “ineffective, counterproductive, and unAmerican.” I thanked the County Legislature for teaching me to pay attention to what is happening here locally and to be diligent in preserving our civil liberties, and the proper relationship of the government to the people — no matter which party is in control (I remain embarrassed that Democrats spawned this legislation and are still playing politics).

. . from our post of September 9, 2007:

Sunday newspapers across the nation have major articles today (Sept. 9, 2007) questioning the efficacy, enforceability and negative unintended consequences of residency restrictions on sex offenders. An Associated Press story out of California, by Catherine Saillant for the Los Angeles Times, is appearing in media markets big and small, from the Seattle Times in Washington State ["Strict laws may foil sex-offender tracking"] to the Concord Monitor in Massachusetts . . .

A social agency has tried for 17 months to find a place for Ross Wollschlager to live. The article continues with a quote from Margaret Coyle, a county prosecutor who opposed Wollschlager’s release:

“It’s harder to protect the public when he is homeless. Were he in a condo or an apartment, we could supervise him more effectively.”

In addition, a Wilkes-Barre, PA, councilman insists that he will continue to press for residency restrictions, despite the fact that “Mayor, residents voice doubt over councilman’s sex offender ordinance” (Zwire.com. Sept. 8, 2007). According to CitizensVoice.com:

“Mayor Tom Leighton gave [Councilman Jim] McCarthy a letter at a work session Tuesday from Lauren Taylor, executive director of the sexual offenders assessment board of the Pennsylvania Board of Probation and Parole, which cites research showing there is no correlation between residency restrictions and reducing sex offenses against children. In fact, ordinances may make children more vulnerable to sexual predators, the letter stated.

“According to the letter, 93 percent of sexual abuse victims know their abuser; 34 percent are family members and 59 percent are acquaintances. Forty percent of sexual assaults take place in the victim’s own home and 20 percent take place in the home of a friend, neighbor or relative.

“Residency restrictions may have the unintended effect of increasing risk and may make supervision and management more difficult, the letter stated.”

The lawmaker, Councilman Jim McCarthy, sounds a lot like politicians in Schenectady County, e.g. Legislature Chair Susan Savage, when he replies to such arguments by stating: “We are an island amidst all of these people protecting these children.”

. . . In addition, here in the New York Capital Region, the Albany Times Union published a major original piece of journalism about sex offender residency laws today: “Efforts to protect kids often carry own risks: Regional laws restricting residency for paroled sex offenders can be counterproductive, some officials say” (Sept. 9, 2007; article goes into for-pay archive in two weeks). Veteran reporter Carol DeMare notes:

“Parole officers understand the obstacles, but they have to work within the laws. ‘We think these laws are counterproductive to the rehabilitation of sex offenders and can put communities at risk by, in some cases, driving sex offenders underground,’ said Mark Johnson, spokesman for the state Division of Parole.”

In August, 2007, the Gatehouse News Service issued a report and series called “Sex Offenders: A Flawed Law.”  Although the multi-part series is no longer available at the Gatehouse website, you can find it a the Patriot Ledger (Quincy, MA), where it ran on August 25 and 27, 2007: see Part One and Part Two; below are links to eight articles within the series; click the following link and scroll to the end of the article for a 4-minute video that accompanies the series.

SEX OFFENDERS: A FLAWED LAW – RIGHT NEXT DOOR: Unlike many states, Massachusetts does not legislate where sex offenders can live
First in a two-part series – Aug. 25, 2007

SEX OFFENDERS: A FLAWED LAW – BACK ON THE STREET: Mom of three molested children pushes for stricter sex offender sentencing (video in story)
First in a two-part series  – Aug. 25, 2007

SEX OFFENDERS: A FLAWED LAW – Violent crime drives U.S. offender laws
First in a two-part series -  Aug. 25, 2007

SEX OFFENDERS: A FLAWED LAW – Not all equal: State sex registries can be unforgiving; Some will pay the rest of their lives for mistakes in youth
Second in a two-part series – Aug. 27, 2007; scored 147.0

SEX OFFENDERS: A FLAWED LAW – Experts: Education best defense against predators
First in a two-part series – Aug. 25, 2007

SEX OFFENDERS: A FLAWED LAW – State struggles with registry
Second in a two-part series – Aug. 27, 2007

SEX OFFENDERS: A FLAWED LAW – Right cop helps sex offender registry work; Police choose their officers carefully
Second in a two-part series – Aug. 27, 2007

SEX OFFENDERS: A FLAWED LAW – It’s easy, but does it work? Banishing sex offenders gets a second look
Second in a two-part series – Aug. 27, 2007

Inauguration Day dawned with high expectations.   The weather forecast for Schenectady called for partly cloudy skies this morning — the perfect setting for a glorious sunrise (pink-painted clouds in a crisp winter-blue sky) to celebrate the opening of the Obama Presidential Era (in contrast to yesterday’s Bush sunset). Therefore, the f/k/a Gang was up and about much earlier than usual, in order to be caffeinated, bundled up, and out in Riverside Park for the 7:15 sunrise, Canon PowerShot in hand.  Outside my front door, however, it became clear that a thick blanket of gray clouds covered our Eastern sky.

. . . . . . . . . . . . .

.. Inauguration Day 2009, at sunrise, Riverside Park, Schenectady NY; photos by D. Giacalone ..

After a quick moment of disappointment, I thought: A stately, subdued sunrise is just fine.  We don’t need a flashy show, nor rockstar fireworks today.  No drama, just the real Obama.

And, Barack Obama did not let us down, after being sworn in as our 44th President.  He gave a speech that was sober, not splashy — the goals soared more than the rhetoric.  In his Inaugural Speech (text, video), President Obama chose to focus on responsibilities over rights, community over clanishness, public spirit over party spite.  He chose to be himself and ask us to be our best selves.

For too many decades, politicians have told Americans that we can demonstrate our freedom with selfishness and our liberty with callousness.  So, I want to thank President Barack Hussein Obama for asking us to join him in a “new era of responsibility.”  This line is surely being quoted around the world and the web:

“There is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.”

Imagine if “only” a few million of us discovered the truth in that sentence?  Then, imagine if the majority of us did?

Frankly, as one of the “nonbelievers” in the “patchwork heritage” of America, I thought there was a little bit too much of the obligatory “God talk” in the inaugural ceremonies.  That’s not because I begrudge others their beliefs (although, I do wish they had a bit more respect for my choice to base my moral code on the dignity of man, not the commands of a deity).  It’s because I know — as does Barack Obama — that it won’t be God doing “the work of remaking America.”  It will be each of us, alongside our leaders.  As Pres. Obama correctly noted:

“God calls on us to shape an uncertain destiny.”

Barack Obama impressed and inspired me in his first national appearance, on July 27, 2004 (see our prior post, “Obama, O mama“).  He no longer needs to impress me to have my support and best wishes.  But, I hope he will continue to inspire all of us — to “put away childish things” and grow into a mature citizenship, within a national community ready to work, learn, and face our joint future together.

P.S. For 20 years, Washington, D.C. was my adopted home, where I became an adult, made life-long friends at college and work, and started my legal career.  This is another one of those days when I wish I could be in D.C.  A lot of smiles and warm embraces would be shared with my friends tonight, were I down there.

Since I can’t be, I’m pleased to say that a woman who perhaps did more than any other non-politico, “common citizen” to publicize Barack Obama and give him a lift in the primaries has gone to Washington for the Inaugural.  If you see her, please give Obama Girl Amber Lee Ettinger a big hug and heartfelt thanks from the f/k/a Gang.

a pretty kite soars
a beggar’s shack
below

the war lord
forced off his horse…
cherry blossoms

a mountain cuckoo sings
“Don’t fall off
that horse!”

a war lord too
draws near our fire…
Oi River

… by Kobayashi Issa (19th Century, Japan), translated by David G. Lanoue

]]> http://blogs.law.harvard.edu/ethicalesq/2009/01/20/obama-dawning-sober-words-of-hope-and-duty/feed/ 0 http://blogs.law.harvard.edu/ethicalesq/2009/01/19/mlk-bho-lets-make-it-a-year-not-a-day-of-service/ http://blogs.law.harvard.edu/ethicalesq/2009/01/19/mlk-bho-lets-make-it-a-year-not-a-day-of-service/#comments Mon, 19 Jan 2009 15:58:21 +0000 David Giacalone http://blogs.law.harvard.edu/ethicalesq/?p=10511 . . . please: not just one Day of Service …

With sincere thanks to the millions of Americans who are making Martin Luther King Day “a day on, not a day off” — and especially to those who will be going to work and then going to an MLK service project later today — I want to nag my fellow Americans to honor Martin Luther King, Jr. and the spirit of the Obama Nation by making an At-least-a-year-of-service Pledge.  Head over to www.volunteer.gov for suggestions and links to volunteer opportunities.

MLK DAY
the monochromatic
winter sky

…. by Ed Markowski

A lot of us folks in the legal profession are woefully short on handy-man skills.  And, frankly, we can achieve a lot more Value Added for our volunteer efforts if we use both our minds and our hearts, rather than our backs and sweat, in service to others.  Although law-related “pro bono” work comes readily to mind for many with law degrees, I hope a lot of lawyers and law students will consider mentoring a child or young parent — as a human being wanting to touch the life of other human beings. I agree with the folks at National Mentoring month:

“When you serve as a mentor, you enrich your own life as much as you do the life of a child. Mentoring leads to new experiences, new connections, new insights, and new satisfactions.”

… January 2009 is National Mentoring Month ..

Learn more about mentoring here.

We’ve talked about MLK Day themes before. And, we have already thanked America for choosing Barack Obama last November.  But, the f/k/a Gang is feeling terribly short on the kind of eloquence that seems adequate to mark the concurrence this week of Martin Luther King, Jr. Day and the Inauguration of Barack Obama.  So, we’re going to leave the eloquence to our new President and others better equipped for the task.

Like many postings at this weblog, this one is as much an exhortation to myself as to others — putting words on the public record that will help move me to thoughtful, heartfelt, meaningful action in my everyday life, in service to the community (local and national).   Actions are far more important than words; and I believe that quiet individual actions are in the end more important than the rush that comes from being in a crowd in support of a good cause or to be part of a moment of history.  I’m going to mark today with a few rare minutes — away from this addictive and often inconsequential weblog and internet — of focused contemplation as to the best use of my limited time and energy in service this year to others and to our nation.  Something tells me that I’m going to decide that less blogging and more mentoring is a far more productive and satisfying use of my time.

– photo of the Mohawk River at Schenectady, NY, Jan. 18, 2009; by D. Giacalone –

p.s. Don’t forget to join Yolanda Young’s Blawg Review #195, her special Martin Luther King, Jr. Day edition of Blawg Review.  In addition to providing commentary and musings on this year’s celebration, she links to MLK stories from around the blawgosphere.  (I love the tagline at her On Being A Black Lawyer weblog; it’s a quote from Charles Hamilton Houston: “A lawyer is either a social engineer or a parasite.”)

Lawyer Arthur J. Giacalone (who finally has a small website) is my brother (as well as my haiga collaborator). Due to the nature of his law practice, I’ve been more aware than many proponents of Green Energy that large industrial-scale “wind farms” are often not good neighbors. Art’s zoning-development law practice has long focused on helping residents protect their quality of life, property values and community character.  More and more over the past decade, homeowners have come to him deeply concerned over proposed wind farms in their towns, villages and rural communities. Arthur has been working hard on their behalf — with some wins and some losses — to help assure that law makers and public officials use their planning and development powers to require large-scale wind farms to be eco-friendly neighbors.  As Art says at his website:

. . . Art Giacalone  . . .

They may be touted as “green and clean,” but inappropriate siting of industrial-scale wind turbines can adversely impact the health of nearby residents (”wind turbine syndrome”), the community’s rural character, and the value of properties within the towers’ viewshed.

Last week, Art had a well-deserved victory in the case of Hamlin Preservation Group v. Town Board of the Town of Hamlin (NYS Sup. Ct. for Monroe County; Index No. 2008/11217).  In a decision dated January 5, 2009, the Hon. David Michael Barry “set aside and annulled” The Wind Energy Law adopted in April 2008 by the Monroe County Town of Hamlin.  Judge Barry said that the Town Board violated the requirements of the State Environmental Quality Review Act (SEQRA) when it neither took a “hard look” at the relevant areas of environmental concern, nor set forth a “reasoned elaboration” for its determination that the wind energy law would not have a significant impact on the environment.  See “Hamlin wind power decision blown down in court” (Rochester Democrat & Chronicle, Janl 12, 2009).

The facts are instructive. As Art explained in a press release last weekend:

The wind law nullified by the court would have allowed construction of 400-foot- tall wind turbines within 600 feet of property lines and public roads and 1,200 feet of residences.  In adopting the local law, the Hamlin Town Board chose to ignore the recommendations of the town’s Wind Tower Committee for 1,500-foot setbacks from roads and property lines, and 2,640-foot [half-mile] setbacks from residents.  The Town Board also disregarded the WTC’s recommended noise standards intended to protect the health and wellbeing of nearby residents.

The Board had argued (rather lamely, methinks) that it didn’t have to explain its conclusion that there would be no environmental impact, because its legislation only imposed restrictions and did not actually allow any specific project.

As my brother knows, I’ve always been a bit worried about the NIMBY phenomenom.  With all its open space and wind potential, I believe it should be possible for New York to play an important part in achieving our national goal of developing green energy and moving toward energy independence, while helping with needed economic development.  But, I’m also convinced (again, because of all that space) that large-scale wind production can and should be done in a way that minimizes or eliminates environmental damage to the surrounding communities — and thereby eliminates opposition from reasonable people acting in good faith.  Art is right when he argues:

“If a town chooses to allow, rather than prohibit, industrial-scale wind development, it must, at a minimum,  protect its residents’ health, maintain the town’s rural character, and preserve property values by  establishing meaningful setback requirements and noise standards.”

According to the Rochester Democrat & Chronicle, Hamlin Town officials want to move quickly to put a new law on the books. (See “Hamlin to consider new wind power laws,” Jan. 13, 2009)  Let’s hope this time they listen to their own Wind Tower Committee and other experts who have come up with workable standards to make windfarms good (if a bit standoffish) neighbors.

For more on these issues, see:

• “Frequently Asked Legal Questions About Wind Farms” (by Arthur J. Giacalone, orig. pub. The Daily Record, Rochester, NY, June 30, 2005); and Art’s seminar outline “Zoning Challenges: Overcoming Obstacles.”
• the “wind turbine syndrome” website
• National Wind Watch, a strong opponent of wind power, which offers a brochure brochure detailing alleged adverse effects from industrial wind power

p.s. Just a little bit of haiku on a frigid winter night:

withering wind…
the scarecrow’s jacket
fits

… by ed markowski

the narrow place
between my neck and my collar
November wind

. . . by DeVar Dahl – A Piece of Egg Shell, Snapshot Press Haiku Calendar 2003

sudden blast of wind -
borrowing the snowman’s
hat and gloves

… dagosan

It’s taken too long, but it’s great nonetheless: The National Safety Council has started a campaign to outlaw all use of cellphones while driving, and to make it just as socially unacceptable as drinking and driving. See, “A Problem of the Brain, Not the Hands: Group Urges Phone Ban for Drivers” (New York Times, Jan. 12, 2009)

As the January 12th NSC news release states:

• “The National Safety Council today is calling on motorists to stop using cell phones and messaging devices while driving, and is urging businesses to enact policies prohibiting it and governors and legislators in all 50 states and the District of Columbia to pass laws banning the behavior.”
• “ ‘Studies show that driving while talking on a cell phone is extremely dangerous and puts drivers at a four times greater risk of a crash,’ said Janet Froetscher, president and CEO of the NSC.
• “A study from the Harvard Center for Risk Analysis estimates that cell phone use while driving contributes to 6 percent of crashes, which equates to 636,000 crashes, 330,000 injuries, 12,000 serious injuries and 2,600 deaths each year. The study also put the annual financial toll of cell phone-related crashes at $43 billion.”

A fact sheet, data resources and other information concerning cell phone use while driving are available on the NSC website, at distracteddriving.nsc.org.

NSC argues that DWP (like texting while driving) is just as dangerous as DUI, and is far riskier than talking with a passenger or many other distracting behaviors.  It also makes it clear that hands-free phoning is not safe:

“When you’re on a call, even if both hands are on the wheel, your head is in the call, and not on your driving,” [NSC CEO Janet] Froetscher said. “Unlike the passenger sitting next to you, the person on the other end of the call is oblivious to your driving conditions. The passenger provides another pair of eyes on the road.”

Since we’ve been harping on this subject for almost a decade, none of this information is new to the f/k/a Gang — and, it has been available to all the politicians who’ve passed phony hands-free cellphone laws over the past decade.  We’ve collected much of our own information and argument in the post “California’s make-believe cell phone safety law” (June 30, 2008).

• Last September, we stated our hope that DWP would get an advocate as effective as RID has been against drunk driving; NSC could certainly more than fill that role (with its reputation and resources), even though having a spokesperson with the drive and personal commitment like that of RID’s Doris Aiken would also help a lot.
• As the NYT article points out: “The studies show that cellphone conversations are highly distracting compared with other speaking and listening activities in the car. One might think that listening to talk radio or an audio book would degrade driving skill; it does not.”

• The business-multitasking drivers who insist they must DWP, should notice this paragraph in the NSC news release:

“A significant amount of vehicular cell phone use is done on the job. Many businesses have already acknowledged the injuries and costs associated with this behavior by adopting policies that ban cell phone use by employees on the roads. Among NSC member businesses that responded to a survey, 45 percent said they have company policies prohibiting on-road cell phone use. Of those, 85 percent said the policies make no difference in business productivity.”

NSC has taken up a fight that will be long and hard.  Too many self-entitled Americans are apathetic about the risks they cause for other drivers and themselves.  Too many companies make money by selling cellphone devices and service.  Too many politicians lack the courage to do the right thing.  Let’s hope that the NSC education activities will, indeed, at least help to make DWP socially unacceptable.  Weeach need to pledge not to phone while driving, not to let our minor children do so, and to insist as passengers that our drivers do the same.

.. ..   ..

The death last week of Eartha Kitt — a woman known originally for her sexiness but respected and treasured worldwide for her talent, allure and spunk — reminded me that I wanted to come back to an issue that our coverage of Wendy raised with some of my most valued friends.  One intelligent and sensitive Baby Boomer female friend chastised me, saying:

“The world does not need more posting of women with low cut dresses calling attention to themselves. Sorry, but that’s just the way I see it.  We get to be human beings , too—women these days are way too sexually objectified constantly.”

.. the calendar photo that started it all . .

My reply at the time was something like: “To me, one of the glories of the human race is that we produce people who can be good, intelligent, talented human beings AND beautiful, and even sexy.”

One of the best things about our current age is that it is possible for a woman to be fully respected — among people with even average levels of EQ — as a human being, and a professional, while being beautiful and sexy.   For over a quarter century, I’ve seen smart, sexy women in important positions, as bosses, managers, colleagues, and partners within the legal professsion (beginning in the late 1970’s at the Federal Trade Commission).  When such a talented professional woman chooses to have a tasteful-but-sexy photo of herself used for a good cause in a fund-raising calendar, I believe it helps the cause of cross-gender appreciation — even if some juvenile males (who shall always be among us) act like jerks when viewing and discussing the photo, or some thin-skinned females choose to be offended or to act catty.  [Note: On a related topic, we opined about neo-puritanism within the legal profession back in 2006, during the flap over a Jiwani ad in Massachusetts Lawyers Weekly. And see our post on the Fetman Firm Billboard.]

When I raised this topic with Wendy Savage back in November, she replied: “I do think that modern, educated men are able to appreciate that a woman can be smart and beautiful, and they want both in a partner. “

Furthering this discussion (a little), Boston Magazine has opened its new publication year with an article that focuses on Wendy Savage, titled “Counsel Requests the Right to Appeal: Smokin’-hot lawyer Wendy Savage defends her buzzy turn as a pinup” (Boston Magazine, by Alyssa Giacobbe, January 2009).  After noting that Wendy was “by far the most come-hither among the calendar’s 12 male and female models, and thus the only one who’d attract significant attention,” the BM article states:

.. Photograph at Boston Magazine by Jackson Stakeman ..  ..

“Since Beautiful Lawyers was released in October, Savage—2006 graduate of BU School of Law, corporate lawyer, and sometime model—has inspired both a following of oglers and a torrent of criticism on legal blogs for what some consider a risky move for any attorney aiming to be taken seriously, especially a female one. Beneath a post on Above the Law, which shows a picture of Savage in a plunging neckline and calls her “Boston’s version of Joe the Plumber,” the responses go something like this: Wendy Savage can work on my pipe anytime she wants. Or: Her? She’s not that hot. And then, a multipost, Porky’s-esque debate over whether her breasts are real. (Savage declined to comment on such speculation, calling it ‘gutless objectification.’)”

In actuality, Wendy did submit a longer written response to Boston Magazine writer Gioccobe about the authenticity speculation, but they chose not to print it.  According to an email Wendy sent us this morning, she wrote:

2) I am conflicted about responding to the gossip on the blogs. The fact that my “peers” are taking time out of their days to offer such asinine commentary (all anonymously I will note) speaks volumes about their character (or lack thereof, to put it more accurately). I have done my best to avoid those who are driven to such pathetic, gutless objectification – I don’t intend to start engaging them now.

It seems to me to reflect the “dumbing down” effect of the Tucker Max culture.

I have learned firsthand what ad agencies and countless women before me have known for ages — all it takes is a little cleavage to turn some men into driveling babies.

The BM article does get a bit more substantive, stating:

“Coming off an election season that saw an intellectual woman flogged for her appearance and an attractive woman attacked for her lack of depth, Savage is acutely aware of the double standard that female professionals face—and how to maneuver around it. ‘I wouldn’t say my looks have been a big positive in my career, but people tend to underestimate you if you look a certain way,’ she says. ‘I think I’m smarter than I appear. That’s worked to my advantage’.”

Wendy also told Boston Magazine: ‘When I was younger, I cared a lot about what people thought about me, people that I didn’t even know,’ she says. ‘But I’m 28 and feeling like I’m starting to grow up. Doing the calendar was my choice, and I’m proud of it.’

We clearly are not going to resolve the issue of the effects on professional and personal reputation from the publication of sexy (but not trashy nor pornographic) photographs of lawyers and other women (or men).  When I’ve thought about this and similar topics over the years, I’ve tried to figure out how or why sexiness is any different from all the other attributes that we use to judge/treat/value other human beings, many of which are simply genetic accidents (e.g., intelligence, height, wealth, power, fame, charisma).  I’ve also wondered how and whether to distinguish situations where the individual freely chooses to be judged by or to utilize a particular attribute.   It is tricky stuff.  I know that many disagree with my current sentiments, and I am open to further discussion, while hoping that dissenters or skeptics are also willing to reconsider any blanket condemnation of publishing lovely women in skimpy black dresses.

Enjoying beauty is very natural for human beings of all genders, ages and cultures. If you come here often, you know that the f/k/a Gang also appreciates and greatly enjoys beautiful scenes in nature.  Here’s a (non-retouched) photo that I took from the end of my block yesterday afternoon.   That’s my favorite bench in Riverside Park, and Wendy Savage is welcome to join me there any time to enhance the scene and the sublimity of the experience:

- Riverside Park, Schenectady, NY, along the Mohawk River; Dec. 29, 2008; photo by David Giacalone -

sua sponte –
madame justice
catches me staring

. . . by dagosan

Of course, we have long agreed with this sentiment by Jesse Winchester in his song “Isnt’ That So?” [YouTube video here]

Isn’t That So

Didn’t He know what He was doin
Putting eyes into my head?
If He didn’t want me watching women
He’d a-left my eyeballs dead

©1972 Jesse Winchester – From the LP “Third Down, 110 To Go“

Now, please let us know what you think, with thoughtful and polite comments (both IQ and EQ will be graded by Prof. Yabut).

Leap Day -
an old friend
takes off her glasses

.. by Yu Chang – photo haiga orig. posted at Magnapoets JF (March 2, 2008)

p.s. Speaking of brains, beauty, and talent, here’s a haibun (short prose plus a haiku or senyru) by Roberta Beary, Esq.:

untitled

pity the daughters of beautiful mothers the years spent waiting to
grow into a beauty that never comes the sympathetic looks finally
understood at the moment when childhood ends

mother’s visit
side by side we outline
our lips

- by roberta beary, Modern Haiku Vol. 37:1 (Spring 2006) -

unseen eyes –
an apology made
behind dark shades

…. by dagosan

.. After years of tarnishing the reputation of the chronically-troubled Schenectady Police Department, its former police chief, Gregory Kaczmarek pled guilty on Tuesday to third degree criminal possession of cocaine (with intent to sell).  Six years after he retired his position under a cloud, he’s heading for two years in prison, with his stepson looking at three years (and his stepdaughter already doing 6 years for another drug bust), while his wife will spend six months in the County jail.  See,  ”Ex-chief heading to prison: Schenectady’s Gregory Kaczmarek admits to drug charge” (Albany Times Union, Dec. 3, 2008); and “Kaz Family Plan” (Carl Strock’s Freestyle Blog, Dec. 2, 2008)

The story is well-known here in Schenectady, but I thought I’d give it some space here at f/k/a, as a civics lesson (or a shot of schadenfreude) for our readers, and because a little venting might help get the bad taste of Kaz’s career out of my mouth.  The convictions are part of a larger drug case that has already sent almost two dozen participants to prison.  Greg and Lisa Kaczmarek, who operated a pizza shop they called Capo di Pizza for a few years after he retired in 2002, were minor dealers and users.

Here are excerpts from the Schenectady Gazette’s Kaczmarek Timeline: that should give you a good idea of the odorific tale of Chief Kaz (and see “Kaczmarek: ‘I sincerely apologize’” (Schenectady Gazette, December 2, 2008) [words in brackets are my filler explanations]:

Call me a cynical old curmudgeon, but my disdain for Greg Kaczmarek got even deeper after seeing him and his lawyer, Thomas O’Hearn, on the steps of the Schenectady Courthouse on Tuesday (for a short video clip with highlights, linked in the Sidebar of a Times Union article).   Admittedly, as I confessed here, courthouse-step statements by lawyers and arrested cops often give me agita. Here are some of my printable reactions to the Kaz and O’Hearn show:

• When you’ve been scamming the public for a couple decades, apologies on a courthouse steps are virtually meaningless.
• . . . . that’s especially true when said behind a pair of sunglasses (a sentiment echoed by WGY.com radio personality Al Roney, in the Dec. 3 blog post “Lose the Shages,” where he notes: “You can’t look ‘us’ in the eye, when we can’t see your eyes”)
• It’s hard enough to take your apology to other police officers seriously after two shady decades, but it’s even harder to swallow when you first point out that your conviction shouldn’t really affect them, because you’ve “been out of law enforcement for seven years.”

The Gazette article “Kaczmarek will be matched to prison” (Dec. 4, 2008) tells of likely conditions in prison for Kaz and jail for Lisa, his wife. In it we learn that “In addition to the $1.05 per day, Kaczmarek will also receive his state pension of $36,096 annually, officials with the state Comptroller’s Office said. The pension for his police career is guaranteed and not affected by criminal convictions.”

As I’ve said before, the worst thing about a bad cop is how much more difficult they make the job of the good cops.  For a taste of the public’s reaction to Kaz’s plea, see Gazette Editor Mark Robarge’s post in their Editor’s Notes weblog, where he compiles quite a few reader comments from several related Gazette articles.  Let’s cap this Kaz memorial with the words of our local journalist, Carl Strock (who always liked Chief Kaczmarek and seems particularly disappointed byhis shameful downfall), on the day of the plea, from his “The View from Here” column in the Schenectady Gazette (Dec. 2, 2008):

“With all the scandal, corruption and internal crime that the Schenectady Police Department has been party to over the past 20-some-years that I have been observing it, for the department’s chief, upon retirement, to have become a low-life, small-time drug-snorter and drug dealer, head of a family of low-life snorters and dealers, I do believe tops all. Or bottoms all.”

At noon Eastern Standard Time today, a 90-minute ABA ethics teleconference and audio webcast will take place, titled “Billing Pitfalls & Pratfalls: Avoiding the Ethical Issues that Snag Attorneys.”  It’s sponsored by the ABA Family Law Section and Professional Responsibility Center.   The description of the session includes this sentence:

“Our expert faculty will discuss hot topic issues relating to  . . .  billing based on ‘value pricing’.”

I’m hoping that the faculty, Mark Chinn (of Jackson, MS, Moderator),  Lori Nelson (of Salt Lake City, UT ), and Chaim Steinberger (of New York, NY), will spend considerable time on the topic of the fiduciary and ethical obligations of lawyers using value billing — especially on standards for avoiding unreasonably high fees.  The issues are most pertinent with regard to the kind of “average” or “Main Street” clients seen by family and divorce lawyers and mediators — clients who are not sophisticated in dealing with lawyers or purchasing legal services.

As used here, “value billing” or “value pricing” is a pricing method in which fees are set in advance of the provision of legal services, based on the client’s perception (guess) of the “value” of those future services, rather than on the lawyer’s time expended, other efforts, costs or risks. [see A. Shields]. Value Billing is distinguished from the more common alternative pricing practice of using a “fixed fee” that attempts to mirror the expected or average cost to the law firm for providing a particular discrete service.

We’ve been raising questions about some of the principles and tactics of value billing for almost five years, and have garnered virtually no analysis of the issues by legal ethics experts or other commentators beyond those with a financial stake in the concept of value billing (a/k/a, value pricing).  See, e.g., our posts starting with “Value Billing and Lawyer Ethics” (Jan 28, 2004), and culminating in  “broadening the hourly billing debate” (Aug. 18, 2008), through “smart clients care about . . . marketplace ‘value’” (Nov. 25, 2008).

As discussed in our prior posts, we’ve seen many red flags that call for ethics scrutiny and guidance, or raise fiduciary concerns regarding value billing/pricing.  For example, value billing proponents:

• over and over tell lawyers (and other professionals) they deserve to earn higher fees than they can charge using hourly billing, and that they will indeed achieve such higher fees and greater profits by using value billing; meanwhile, most clients seek alternative pricing mechanisms in search of lower fees than generated under hourly billing.
• argue that value pricing can and should be divorced from the time and effort expended and other costs incurred in providing services to a client; and
• attack hourly billing, the profession’s predominant method for setting fees, and the corresponding, century-old ethical standards for reasonableness (time and effort expended), as themselves unethical — without offering any standard other than the client’s guess as to value prior to seeing the results of the services rendered.  Of course, we have fiduciary duties of fair dealing and full disclosure precisely because many clients lack the information to make such judgments about a lawyer’s fees, competence, and diligence. [see our post "chronomentrophobia," on the ethics and practicalities of hourly billing and alternatives]
• offer tips for reducing a client’s price sensitivity and increasing the lawyer’s leverage in order to charge premium fees, and for achieving higher prices by using information about the client gathered in confidential discussions – including financial status and personal characteristics (such as the client’s emotional condition, anxieties, obsessions, sense of urgency, credulity, etc.).
• advise lawyers to engage in price discrimination among clients who are fully capable of paying fees in full — in order to charge higher fees to those perceived as able or willing to pay more, and therefore to cherry-pick the highest paying clients and prune-away lower-paying ones (rather than serving more buyers, which is the traditional argument justifying price discrimination).

• boast that value billing allows lawyers to circumvent competitive market forces that prevent an increase in their hourly rate, and to avoid passing on to clients efficiency gains that would reduce the number of hours billed;
• praise “Change Orders” as a way to charge ultra-premium fees for any unexpected or added tasks, by using the leverage over the client that the situation creates [click for our reply to Ron Baker's Auto Mechanic analogy];
• suggest that lawyers can expect to work fewer hours using value billing and still achieve increased profits.
• use lots of glib mantras, metaphors and maxims — many of which seem specious or inapt.
• suggest that giving a money-back guarantee is sufficient to remove any issue of excessive fees — although Rule 1.5 bans agreeing on an unreasonable fee, as well as collecting one, and clients should not have the burden of deciding when to demand a refund; nor should they pay a hidden premium because the fee comes with a refund guarantee.

Some or all of the above issues need to be discussed today by the panel — and, we hope, someday soon by the law professors at the two major ethics blawgs, The Legal Ethics Forum and The Legal Profession Blog, as well as those at Concurring Opinions, and the consumer advocates at Public Citizen’s CL&P weblog.

As family law and mediation practitioners, I hope the panel will comment on Matt Homann’s approach to value billing for a service such as divorce mediation.  Rather than offering a reasonable hourly or flat fee up front, Matt would ask:

“What do you think X would be worth to you?” And remember, “X” is not a contract, will, or deed, but rather peace of mind, security, or some other intangible benefit tied to the specific legal service you’ll be providing.”

[My response to this in a post back in April 2005: "Homann’s Value Billing approach turns the fiduciary relationship into an auction, where the single potential buyer is unaware of the seller’s knockdown price and has no way to judge whether the object for sale is a valuable antique or a fake. No matter the soothing words and good-feely ambiance, it comes down to playing on the consumers fears and sentiments and then saying “make me an offer.” ]

.. 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.  So, we need to be suspicious, I believe, 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.  To say a fee is “reasonable” if the client agrees to pay it (or agrees to the subjective “value” of the service), makes the rule against unreasonable fees moot.  We need a better standard and guidelines when using value billing.  Don’t we?

update (Dec. 29, 2008): Ron Baker continues his defense of Value Pricing, and I respond, in a set of Comments appearing in a prior post on the topic of value billing.

Black Friday is almost at an end, and the f/k/a Gang is once again kicking off the holiday season with our annual lament over the over-commercialization of Christmas and the Holiday Season.  While many are bemoaning the signals of a reduction in consumer confidence/buying, we see a great silver lining in those black economic clouds:

Necessity does often gives birth to invention.  Our hope is that recession will be the midwife that helps America (and the rest of the Over-Commercialized Christmas World) create a re-birth in Christmas/Holiday spirit.  With a little effort and creativity, we can let financial necessity help re-invent a spirit that represents — even for the non-religious like myself — the selfless love of Jesus, and the compassion of the original St. Nicholas, rather than the consumption symbolized by Santa Claus.

Even before I read Scott’s piece this morning, “The Blackest of Fridays” at Simple Justice (Nov. 29, 2008), where he asserted:

“Consumerism, especially the crass king that makes it’s home on Long Island, is an evil.  No, not to enjoy material possessions per se, but to need them so desperately to enhance one’s self worth that one would risk the kids’ college or the house to get it.”

. . . and even before the news arrived that “Worker trampled to death at Long Island Wal-Mart during Black Friday stampede” (New York Daily News, by Joe Gould, Nov. 28, 2008), the Gang was searching our archives to recall what we said in other years about consumerism ruining Christmas.  (We’re often pleasantly surprised by our prior insight, idealism and eloquence!)

In the midst of that search, we stopped to check out a few recent articles that seemed  relevant and hopeful.  For example, the Washington Post brought good tidings that America’s economic crisis has already brought us one consumer blessing — a reduction in the amount of junk-mail from direct-mail marketeers, including fewer offers for new credit cards.  (See WaPo article, Nov.  7, 2008)  Even more encouraging, we ran across a couple of commentators who also saw the potential advantages of American belt-tightening:

• According to Stephen S. Roach, the dive in disposable income and the bursting asset bubbles (leading to a reduction in “net asset extraction” through equity loans) may be bringing a beneficial “Dying of Consumption“  (New York Times, Nov. 28, 2008):

“[T]here is a deeper, potentially positive, meaning to all this: Consumers are now abandoning the asset-dependent spending and saving strategies they embraced during the bubbles of the past dozen years and moving back to more prudent income-based lifestyles.

“This is a painful but necessary adjustment.

“. . . The United States needs a very different set of policies to cope with its post-bubble economy. It would be a serious mistake to enact tax cuts aimed at increasing already excessive consumption. Americans need to save. They don’t need another flat-screen TV made in China.”

• Meanwhile, the NYT’s Ron Lieber envisions a “Leaner Holiday Gift Giving, Bountiful in Spirit” (Nov. 21, 2008).  Similar to our thoughts the past few days, Lieber hoped that “Of all years, this may be the one to stop the holiday gift madness — out of necessity for some of us or simply out of reason.”  His vision:

“[A]t a time when so many people have so much less than they did just a few months ago, there ought to be a way to ease the pressure on them and relieve the crushing social obligation that others feel to dole out to an ever-lengthening list of people

He calls for “an effort to make gift giving more meaningful than mandatory.”  For many that may mean spending less, but Lieber hopes that some of us will be able to spend more, by adding more philanthropy to our holiday giving.

Like Ron Lieber, I’m not at all sure exactly how to go about this transition-from-necessity to a saner, more “spiritual” holiday spirit.  We realize that some family members (can you say “Nana”?) may be very reluctant to spend and give less, while others are even more reluctant to receive less.  But, I am sure we should all be thinking of ways to use our worsened national financial situation to justify new buying and giving habits this holiday season — hopefully leading to new attitudes that will continue even if and when our ecomony and fortunes greatly improve.

We bet a leaner Christmas/Holiday Season for 2008 will teach all of us the lesson that fewer gifts — less giving and receiving –  doesn’t reduce holiday joy for parents or children, spouses or lovers, kith or kin, but somehow increases our satisfaction and sense of connection and well-being.

Finding new ways to express our love and affection, and making new commitment to help the less fortunate, may help us find our way back to the “true” holiday joy, cheer and peace we have tried so long to buy and consume into being.  Those of us who don’t have to cut back should do it in solidarity with those for whom it is a necessity — to take the pressure off of them.

Is this anti-consumerist scheme just the stingy ploy of an old curmudgeon — or of a Scrooge or Grinch who never liked Holiday Cheer in the first place?   Give it a try and see for yourself whether less isn’t indeed really more when it come to inspiring the true spirit of this Holiday Season.  Please share your suggestions on how to pull it off and the results of your efforts in our Comment section.

Below the fold (click “more”), we’ve excerpted some of our prior preaching on the subject of commercialization of Christmas (which we proudly call the Holiday Season, to embrace all the holidays and shades of belief that Americans celebrate every winter).

Christmas Eve –
bits of a price sticker
stuck on my finger

… by Michael Dylan Welch – The Heron’s Nest (Sept. 2005)

wrapping and packing –  
she pastes on
a holiday smile

… by dagosan

Ghosts of Christmas Venting Past:

2004:  Traditional GrinchEsq Musing:  In a country where you don’t have to wait for some guy on a camel or donkey to show up at the market to have a shopping day; and where almost everybody already owns too many things; why do we have a “Holiday Shopping Season” kicked off by a ridiculous stampede, and then give so many and such expensive gifts on a day meant to celebrate a savior, or love, or one’s heritage? [from "a hearse and a grinch," Nov. 26, 2004]

2005: From “the so-called War on Christmas” (Nov. 28, 2005):

I won’t let all those who are irked by Generic Holiday Greetings keep me from wanting all Americans to celebrate this Season without feeling religiously incorrect, compromised or left out. . . . .

From “St. Nicholas v. Santa Claus” (Dec. 14, 2005): 

If Saint Nicholas had had a good team of lawyers, his morphing into the Americanized-commercialized figure of Santa Clause might never have happened.   The frenzied November-through-January “season” of constant shopping, consumption and greed might have been avoided.  Perhaps, even the non-religious (like myself) might be gladly sharing in the spiritual dimension of a holiday season focused on selfless giving and sacrifice for others.  Such a season would deserve to be named for the Baby Jesus, whose followers could then be nurturing  goodwill towards all, rather than fomenting culture war and nomenclature  indignation.

. . . Santa Claus is flashy and out of shape, lets little people do his work for substandard wages, and uses credit cards extensively to buy popularity with expensive gifts. St. Nicholas is low-keyed and humble, and gives modest tokens of love and affection, paying cash.

A few days ago, the kids who hang out at the “legal tabloid” Above the Law discovered that the major NYC law firm Cravath, Swaine & Moore was going to reduce the bonuses it pays its associates (newer, non-partner lawyers) by 50% this year — with the basic bonus for 1st-year associates (who are making a salary of $160,000 straight out of law school) set at $17,500 and seventh-year associates getting $30,000.  The America Lawyer confirmed it yesterday (Nov. 24), and the gnashing of young lawyer teeth has been heard around the world of BigLaw and the internet.

As of this morning, over 1400 Comments have been left at the original ATL post.  And, those numbers will surely swell, since Above the Law and then The American Lawyer brought news yesterday evening (Nov. 24, 2008) that Simpson Thacher, another top firm, was going to follow Cravath’s lead, with the white-shoed herd likely to join in the bonus-reduction stampede.

Nonetheless, the f/k/a Gang isn’t going to harp on either associate avarice or partner parsimony.  Instead, we want to discuss the debate that has arisen over the statement by Cravath’s representatives, as reported in American Lawyer, that many clients are applauding the reduction in bonuses.  Carolyn Elefant summarizes the controversy at Legal Blog Watch with a post that asks “Should firms cut bonuses in response to clients?” (Nov. 24, 2008):

“Though some might compliment law firms for taking clients’ views into account, others in the blogosphere suggest that clients have no business telling law firms how to run their business.”

The clients-bonuses debate (described and discussed below) highlights one of my primary concerns with the concept of “value billing” or “value pricing” by lawyers as espoused by the leading proponents of value billing ["VBPs"].

With value billing, fees are set in advance of the provision of legal services, based on the perceived “value” of those future services to the client, rather than on the lawyer’s efforts (especially, time expended), costs or risks [see A. Shields].  Separating “value” from a seller’s cost might be a nice tactic for extracting “premium” fees, but it is not what smart buyers (much less buyers owed fiduciary duties) expect in the marketplace.  Let me explain.

Summarizing the clients-bonuses debate, Carolyn points to the reaction of Philadelphia lawyer Max Kennerly, in his post “Clients Don’t Care About Associate Salaries or Bonuses (Only Partners Do)” (Nov. 24, 2008).  Max says he doesn’t care how much the weblog service he uses pays its support people; he thinks the fee is “fair and reasonable,” and that’s what counts.  By analogy, clients shouldn’t care about the size of associate salaries or bonuses.  Carolyn explains Max’s point, and brings in Dan Hull’s commentary at What About Clients:

“The reason that clients are complaining about associate bonuses isn’t because they’re trying to micromanage, but rather, they’re questioning the value that the firm is providing. In fact, as Dan Hull suggests at What About Clients, clients should be celebrating, not balking about bonuses, because they provide incentive for firms to retain the cream of the crop. Like Kennerly, Hull agrees that the fact that clients are resenting bonuses is a symptom of greater dissatisfaction with the overall lack of value that many law firms provide.”

But Carolyn and Max have missed Dan Hull’s primary point: Clients should indeed “care” how bonuses are given: They should be pleased when bonuses are based on the “actual value-added or superior associate performances,” but they should be unhappy when (as with most of the big law firms) bonuses are “handed out automatically without regard to the quality and results of the work of each associate do not.”  Dan explains (emphasis added):

” ‘Just being-there’ bonuses tells the whole world–not just your clients–that your law firm values ‘talent retention’, crowd control and morale in the associate ranks over common sense economics and the kind of things clients think about: reward, punishment, incentive, efficiency, penny-pinching in good times and bad. Hey, this is still America; you reward performance, you give incentives for doing great work in the future, and you stiff people who didn’t perform (but still hold out that carrot).

“Clients getting ragged off at associate bonuses in view of the rotten economy? Nah, we don’t see it. . . . [But]

“Yearly bonuses, given no-matter-what, should make anyone sane nuts, crazy, twisted, Flip City, in short order. Give the firms time to get properly and routinely tight with money, which they should have done all along.

“If they do not, clients are going to have problems with that–and with ‘being there’ associate pay generally–in good economies and bad ones.”

As usually happens, over at Simple Justice, Scott Greenfield gets it, and reads Dan correctly:

“Hull is right on target.  A bonus is not a right, but a reward.  It’s a way of saying, you did better than the others, and for that you get more than the others.  Without incentives, we are dull knives in the drawer.  Sane economics demands that law firms not reward the dead wood as well as the top performers . . . “

Although VBP Guru Ron Baker insists that my thoughts about value billing are merely the “ranting and raving” of “someone who lacks a rudimentary understanding of basic economics,” I’m going to stick out my neck and make this assertion:

In a workably competitive market, price reflects the seller’s costs, with competition driving the price toward marginal cost.  Any “sane” buyer making a substantial purchase therefore cares greatly whether sellers are keeping costs down and operating efficiently. (E.g., WalMart surely encourages its suppliers to be efficient and thrifty, even if their price is already a good one.) This is especially true when a buyer has an on-going relationship with a seller, and there are significant costs to the buyer in switching to another seller.

Lawyers exist in a market that has an excess of sellers, where there is great rivalry to attract and keep clients, and many clients complain that fees are too high.  In the market for legal services, then, every “sane” client should very much care whether sellers are operating efficiently and savings are passed on to buyers.  Because the salaries and bonuses of associates are a large and highly-visible component in law firm costs and a large factor in setting/justifying their fees, it is only natural that clients are interested in how the firms they work with handle bonuses — just as they should be concerned if a firm wants to move from a perfectly suitable location to a much more pricey building.

What does this have to do with Value Billing? In ending his post on bonuses, Dan Hull asks: “Value, anyone?“   But, we’re pretty sure that “value” means to Dan what it has meant to Homo Economis (and his Behavioral Cousins) since the open-air markets of antiquity: Getting a quality product for a reasonable price that reflects the seller’s costs and competitive forces in the market.

Of course, the person’s willingness to buy something at a particular price involves what the item or service is “worth” to him or her, including how urgently it is needed, and whether it is a luxury or necessity.  But, you’d have to be rather crazy — or, have a lot of disposable income to spend — to purchase a product regardless of what it costs the seller to produce or bring to market (unless, like Max Kennerly’s purchase of LexBlog services for running his weblog, it’s not a major expense and finding a substitute does not seem to be worth the effort). The proponents of value billing ["VBPs"], however, want sellers and buyers to adopt a “new definition” of “value” that is divorced from costs, so that price will “become less important to the customer.”

In telling us what value billing is, Allison Shields says:

“The key to value billing is that it’s more about the client – their needs, wants, expectations, and values – than it is about the lawyer or even about the specific services that are being provided.” (from “Value Billing – What is it, and how is it done?” by Allison C. Shields)

She explains further that value billing involves “pricing your services by focusing on the client’s needs, rather than on the lawyer’s costs or time.”  Meanwhile, Matt Homann recommends value billing as a way to circumvent competitive market forces that prevent an increase in their hourly rate, and to avoid passing on to clients efficiency gains that would reduce the number of hours billed.  He also recently shared this Rule for Hourly Billing:  “Sophisticated clients who insist on hourly billing do so because they’re smarter than you are, not because they want you to be paid fairly.”

It’s no wonder, then, that Allison admits that “value billing does often result in charging a premium for the lawyer’s services” — and that Ron Baker often boasts about it. (And see, e.g., “Ron Baker & price sensitivity” (April 21, 2005); and “Value Billing and Lawyer Ethics” (Jan. 28, 2004)

Value Billing’s Proponents urge lawyers and client to split the notion of costs from that of price. VBPs listen to what’s on the client’s mind when the information gained (about the client’s financial status, fears, obsessions, litigiousness, etc.) can be used to persuade a client to pay “premium” fees.  However, they are apparently not interested when the client is trying to say “In this market, and especially because there are ways you could readily reduce your expenses, you’re fees are too high.  You need to reduce your costs so that you can reduce your fees and give me better value.”

Max Kennerly is right about clients who complain about excessive associate bonuses: “What they mean is: you’re not worth your fees.”  He’s wrong to suggest that a client’s perception of value should have no connection to the client’s perception that the lawyer has excessive expenses (whether they be salaries and bonuses, rent, or catering services).  Max is wrong that the client has no business poking his nose into such questions and that “value” pricing can and should be divorced from the costs incurred in providing services to a client.

If you still think that a buyer’s “perception of value” and the resulting price should be separated from the seller’s costs and competitive forces in the marketplace, please consider:

Value-Billing and Computers:  If we applied “value billing” to the sale of computers, their prices would be higher now than they were 15 or 30 years ago, because computers are far more essential — valued or valuable — in business and personal life than they were in the recent past.  Of course, that has not happened, because — in any competitive market — we expect cost reductions due to experience, economies of scale, and other efficiencies or technical innovations to be passed on to the buyer, and we expect rivalry among sellers to find ways to reduce their costs and to drive prices down toward marginal costs (which includes a reasonable profit).  No smart buyer would purchase a computer based solely on its subjective, perceived “value” at home or in the office.  He or she would take advantage of the competitive forces that make computers far less expensive than they were when we were using floppy disks.

What about value? Let me leave you with a few questions (and suggest you see our post “broadening the billable hour debate“):

1. How does it benefit clients for value billing to detach the concept of “value” from the cost of production and the prices charged by other service providers?
2. How does Value Pricing jibe with the fiduciary obligation of the lawyer to fully-inform and deal fairly with each client?
3. What is it about the relationship between lawyers and clients — or the meaning of a “reasonable fee” — that would permit lawyers to deprive clients of the normal protections and advantages of a competitive marketplace?

blue sky
behind bare branches
year-end bonus

– by David Giacalone – Legal Studies Forum XXIX:1 (2005)

afterwords (Nov. 26, 2008): Beginning a Comment 3 below, law-firm consultant and value billing proponent Allison Shields makes the first of her detailed responses to my questions about value billing, and I begin a series of replies, covering issues such as whether the lawyer-fiduciary should be informing the client of the likely amount of hours that will be spent on a matter (in order to gauge the Risk or Certainty Premium), whether “value” should be based on the inexperienced client’s guesses before services are performed, whether “she agreed to it” is a sufficient standard of reasonableness, and whether a Money-Back Guarantee is sufficient protection against unreasonable fees.

For a list of the Red Flags that have caused us to worry about the ethical and fiduciary soundness of value billing, see “some Value Billing issues for today’s ABA Ethics Teleconference” (Dec. 4, 2008).