Your website seems to bash plaintiffs' lawyers, but fails to give equal time to defense firms who are equally culpable in the U.S. litigation disaster. Since defense firms typically get paid by the hour, most are reluctant to even think of talking settlement until late into the case, even when there is a meritorious claim that can and should be resolved up front. In a not unusual scenario, Plaintiff with an injury worth $50,000.00 and 50% comparative negligence (typical auto accident) asks for $1,000,000.00 in the Complaint. The defendant offers nuisance value. The parties duke it out, and eventually they settle for $40,000.00. $10,000 in litigation expenses get s taken off the top, the plaintiff's attorney gets his 1/3 leaving the plaintiff with $20,000. The defense firm bills the insurer $30,000.00 and justifies the result against the backdrop of the original amount sued for. Plaintiff's attorney then files another suit because there are plenty of plaintiffs where that one came from, and the cycle repeats. Everyone loses but the lawyers.
I was attending a settlement conference before a U.S. Magistrate Judge, and the first question he asked was "[w]hat are the impediments to settling this case?" Plaintiff's attorney blurted out "[d]efense counsel has not yet billed his client $100,000 in legal fees." Although the Magistrate, on the record, was not amused, he clearly knew that the statement was true and used his influence to steer a settlement for an amount commensurate with the damages. -- Victor M. Serby, Esq., New York, N.Y.
That's the problem in a nutshell (an appropriate container): nobody wins but the lawyers, even if they lose. Let's change the system so that the lawyers lose if they lose - that is, legislate some restrictions on the defense's fees and "expenses." Defense attorneys' fees should be limited to a percentage of the final award and "expenses" should be narrowly defined, itemized, and approved by the court before payment. Also, instead of the loser paying the winner's attorney directly, pay the court and let the court disubrse funds; at the very least, this would curtail comingling of assets in attorney trust accounts. This would also put a stop to such widespread practices as billing a legal secretary's time at $250/hr or more and charging full rates for an hour of "portal-to-portal" travel when the courthouse is a few blocks away. It would also remove most of the defense's incentive to drag out the litigation.
Posted by: Frank Williams at April 12, 2005 12:58 PMI'm disappointed to see that a discussion about the supposed shortcomings of defense attorneys is being painted with the same broad strokes that the plaintiff's bar claims is overly abused to attack them. Having worked exclusively in the defense field for over six years, I have to tell you that I have never, ever dragged out a case (or seen a partner do such a thing) hoping to bill the hell out of it first.
Furthermore, I think it's very important to point out that a large majority of defense firms are small to mid-size with much smaller profit margins than the big firms most people associate with the defense bar. While these large silk stocking firms may very well profit handsomely from the exorbitant fees they charge to their clients, they are worlds away from the smaller firms for whom so many defense attorneys like myself work. Clients like ours are usually insurance companies that have very specific and strict guidelines for what can and can not be billed as expenses, and the go over each and every expense carefully before they pay (often disallowing or questioning anything they don't want to pay.)
Posted by: Lola at April 12, 2005 02:46 PMMr. Serby may be right that some clients (and some insurers) have ceded so much control to their defense lawyers that alleged billing quotas must be reached before settlements are recommended. I submit that this is probably rare. Clients (both plaintiff and defendants) should evaluate the merits of these matters and consider the costs involved well before hired guns appear before Federal Magistrates.
Mr. Serby avoids mentioning, however, that defense lawyers are typically not retained until a suit is filed, which is after a claimant has rejected all previous settlement offers. I submit most pre-litigation offers, with many exceptions, are probabaly reasonable. Although demonstrably reasonable, they may not appear reasonable to plaintiffs with preconceived, and often erroneous notions of the value of these matters.
Where do these preconceived notions come from? Not from defense attorneys. Unlike plaintiffs attorneys, most defense firms do not engage in TV, radio and yellow pages advertising that promise the limits (and sometimes beyond the limits) of what is ethically allowable.
So, if a client previously rejected a $30,000 offer before hiring an attorney and that attorney later advised the claimant to reject another pre-litagation offer of $40,000, and urged the client to file suit to recover the $50,000 presumed due, in addition to the potential for a jackpot jury award for pain and suffering, we can hardly blame defense lawyers for an ultimate settlement netting the client only $20,000, regardless of how many times plaintiff attorneys convince clients to file suit and repeat the process.
Posted by: Tom O'Brien at April 12, 2005 03:01 PMHaving come from an upper class family, myself, my family always had lawyers available, therefore we never had to rely on TV or radio to figure out who should represent us in our legal doings. For this reason I despite lawyers who advertise, because they represent the kind of clients that would, not have access to the same resources my parents do. The only way to find a reliable lawyer is through recommendations and word of mouth.
Posted by: Richard at April 12, 2005 05:59 PMFrank Williams' comment is completely preposterous. Defense lawyers are employed to win the best outcome for their client. If you win a case, should you really have your fees capped as a percentage of the final award of $0?
Judges have neither the time nor the inclination to review the attorney's billing in each case. At some point there has to be a level of trust in the professionalism of the attorneys.
Most judges are woefully underpaid relative to their work histories (Texas Supreme Court justices earn less than $120,000 per year -- about the same as a straight-out-of-law-school associate in Dallas and Houston), they do not need to spend even more time on daily monitoring of the lawyers. Such a requirement would only drive more judicial candidates away from the bench.
Posted by: The Monk at April 12, 2005 07:06 PMI, too, am a defense lawyer. While I'm sure there are instances of defense lawyers churning cases for fees and waiting to settle until they've run up a decent bill, I can say that I've never witnessed it, and I seriously doubt it ever happens in the scenario described.
One thing to remember is that the auto insurers use litigation-savvy claims professionals to monitor litigation. They ask for defense budgets w/in weeks of assigning cases to lawyers. By the time the case becomes a lawsuit, a decent adjuster has probably already evaluated the claim and knows what it should settle for. Where I practice, we get formal offers to settle on file as soon as possible. These are usually rejected. The company makes decisions from there regarding trial vs. settlement.
Insurance defense firms operate at hourly rates significantly below silk stocking business litigation firms. They have clients who can evaluate lawsuits as well as they can, sometimes better. The ones who run up bills don't survive.
Posted by: Hoffa at April 13, 2005 01:00 PMAbove Poster Richard: You sound like a troll but I will bite. Are you implying when you say "For this reason I despite lawyers who advertise, because they represent the kind of clients that would, not have access to the same resources my parents do." that non-upper-class persons should have NO representation?
Forgive us middle-lower class chattel if we do NOT know anyone who can recommend a good lawyer.
Take your head out of your anal orifice and try living without your parents resources for a while.
Posted by: Poor guy at April 14, 2005 10:12 AM