Monday, January 29, 2018

The truly pernicious effect of collateral fee cases

Like a lot of you, I'm sure, I've spent the past six weeks hacking and wheezing with various degrees of severity, rallying occasionally, as (thankfully) on Christmas Eve, but falling apart before and after.

As a solo practitioner, I have had more freedom than most to work from home while battling this plague. When I have had to come downtown, I've chosen to drive. Al Gore might be displeased, but anyone who might otherwise have been forced to sit beside me on the Blue Line---red-eyed, bleary, dabbing at drips of one kind or another---would probably absolve me. I have yet to try out my new Ventra card.

If that sounds like virtue-signaling (am I using that right?) keep in mind that while I have been heroically saving CTA passengers from my own sniffling and snorting, I have also been quite consciously avoiding theirs....

During my semi-confinement, I have had occasion to watch a lot of early local news broadcasts. And, while the political commercials are starting to crowd them out, even in my enfeebled condition, I have been unable to ignore the fact that a great many sponsors of the early evening newscasts are personal injury lawyers.

The taglines are all similar: If you don't win, we don't get paid! Or, putting an even more positive spin on it: We don't get paid unless you do! The word 'contingent' is never used but, of course, contingent fee arrangements are what these TV-spokeslawyers are touting.

If you've clicked here hoping for a nice screed against 'greedy trial lawyers,' I'm afraid I must disappoint. If there are some abuses (and there are), the contingent fee arrangement in personal injury cases usually serves the laudable purpose of getting representation for and, sometimes, compensation to persons who could not otherwise hope to afford a lawyer. And, while it's true, as the Judicial Hellhole folks charge, that there are some personal injury lawyers who rake in millions and millions from the misfortunes of their fellow human beings, that is only because these superior lawyers, through hard work and expertise, and demonstrated good results, have conditioned their fellow lawyers to bring them only the most substantial cases, from which they may pick and choose, and be quite picky about it. In short, the really good PI lawyers have any number of number 1 draft picks, and they hardly ever take Ryan Leaf. One might be sometimes jealous of their success---one can hardly be human otherwise---but the miniscule elite atop the PI pyramid have earned their wealth and fame.

And then there's the rest of us.

For most personal injury lawyers, including the TV pitchmen, a contingent fee case is by no means a sure thing. In one case, a settlement might make the lawyer a seemingly handsome hourly rate -- but the fee from the next file on the shelf, prorated over the hours expended, might not amount to minimum wage. And there are cases that seem so full of promise when the lawyer signs them up, only to learn that the clients were less than candid about this or that and the resulting fee---just like in the television commercials---turns out to be nothing at all. It seems counterintuitive, but a contingent fee lawyer's best, hardest, or most creative work often results in the least remuneration.

And then there's the fact that a lot of us lawyers don't work for contingent fees.

At least, not on purpose.

Although you'd never know it from the TV commercials, the contingent fee arrangement is not appropriate in a great many types of cases. In domestic relations and criminal cases, contingent fees are entirely prohibited. (See, Rule 1.5(d) of the Illinois Rules of Professional Conduct.)

Except sometimes in collection matters, you hardly ever see contingent fee arrangements in business cases. Smith insists that Jones breached his contract and they resolve to fight the matter out in court. All well and good -- but, if they attempt to 'lawyer up,' Smith and Jones will both have to pay their respective attorneys by the hour -- or at least pursuant to some non-contingent arrangement. And, generally, corporations cannot appear in court except through an attorney.

There really is no such thing as a contingent fee defense. If Smith sues Jones for a million dollars and loses, Jones's lawyer doesn't get a third of what Smith didn't get. Can you imagine? Jones's lawyer tells Smith's lawyer afterwards... next time sue for $10 million; we'll split my fee and both retire?

And yet... the contingent fee has become so deeply embedded in the the public consciousness (thanks to the steady drumbeat of TV commercials) that people -- and, by 'people' I mean clients, as opposed to lawyers, although leading scientists insist that lawyers are people, too -- start to think that if they don't win their case, or if they don't win their case fast enough, they can stop paying their lawyer. If you don't win, the thinking seems to go, you're not getting paid.

And clients can be pretty impatient. After all, on television, the thorniest legal problems are usually wrapped up in 40 minutes or less, exclusive of credits and commercials.

All lawyers know this; some exploit it.

The TV pitchmen sometimes warn that insurance companies will stall and delay unless you, the injured viewer, has the good sense to sign up with the firm running the ad. But some lawyers---any is too many, if you ask me---will use discovery to stall (and bleed) the party on the other side who's paying for representation from his or her own pocket.

Have you ever seen a bullfight?

The matador does not fight the bull one on one; he does not go for the kill right away. He relies on picadors and banderilleros to poke and jab and bleed the bull, softening it up before the matador dares the killing stroke. Similarly, the unscrupulous attorney does not go for the merits of a case right away; written discovery, depositions, discovery motions, are all jabbed into the uninsured client's hide, softening the opponent for a low-ball settlement or even an unfair dismissal.

The bull is unrepresented, and must die at the end of the bullfight. The uninsured, but represented, client, paying from his or her pocket, has a chance to avoid the bull's fate, but too often the client's good judgment, bled by unnecessary (but tactical) discovery, becomes clouded. The lawyer's fee may slide from a debt of honor to contingent status.

We can almost never wrap up real-world legal dilemmas in 40 minutes. But we can involve the court more intimately in the discovery process -- requiring the court to decide what discovery may be propounded in the first place, not waiting until a dispute arises and then, perhaps unfairly, settling it.

I call this zero-based discovery. (You can read more about this by following the link. I hope you will.)

Zero-based discovery could help clients avoid the legal fatigue that comes from being bled by discovery -- and help their attorneys get paid in a timely, as opposed to improperly contingent, manner.