[ditto, 01-12-04]
late night hot cocoa —
cyber toasting alone
together
A Task Force on the Future of the Contingent Fee has been formed by the ABA’s Tort Trial and Insurance Practice Section (TIPS), with a mandate to report back by the end of 2004, with what one member calls “a scholarly, well-reasoned piece of work that can be used by legislators, decision makers and the public.” As of this morning, I can find no mention of the task force on the TIPS home page nor the broader ABA website. However, it is described in this law firm press release (and discussed in this newspaper article (Miami Herald, “Lawyers’ fees come under fire”, 01-04-04). (Thanks to MyShingle and How Appealing for pointers to the article.)
The Task Force will be chaired by Becker &Poliakoff’s Steven B. Lesser, an expert on construction-related legal issues. It’s clear that the “Early Offer” proposals by Common Good, with petitions filed in 13 states last Spring seeking to amend the rules of ethics relating to contingency fees, were a major impetus to formation of the Task Force.
update: According to the Steven Lesser’s Bio page at B&P: “Mr. Lesser . . . led the task force’s review of the contingent fee system to evaluate the impact of future changes to this fee structure on attorneys and their clients. The Task Force published “Contingent Fees in Mass Tort Litigation” in the Tort Trial & Insurance Practice Law Journal, Fall 2006 and its earlier report entitled “Report on Contingent Fees in Class Action Litigation” was published in The Review Of Litigation, The University of Texas School of Law, Volume 25, No. 3, Summer 2006.”
This weblog has, of course, opined frequently on the ethics of contingency fees — especially on using a standard fee that does not take into account the risk undertaken by the lawyer in each particular case. (See our Fees resources page.) I am not at all against the use of the contingency fee, but I do oppose its all-too-frequent use in a manner that unfairly over-compensates the lawyer at the expense of the client. As attorney Rutledge R. Liles said while President, Florida State Bar:
“While it is easy to defend the philosophy of the contingent fee, it is impossible to defend its abuses. We must as professionals address these abuses and the process must start in our own individual practices. The contingent fee should be reasonable under the circumstances of the given case. The contracted fee should be a guide not a mandate.” Professionalism and the Contingent Fee: When is Enough Enough?, for The Florda Bar Journal (Jan. 1989, at 5) (discussed here).
1) Don’t let yourselves become the captive of any interest group, as clearly happened in the Ethics 2000 process. As I have argued here, the changes made by the ABA and Ethics 2000 in Rule 1.5 of the Model Rules “make it clear that the ABA has capitulated to defenders of the ‘standard’ contingency fee. The approved Rule changes reverse recent attempts within the ABA, and by client advocates across the nation, to apply traditional ethical and fiduciary duties to the use of contingency fees.”
2) Don’t confuse Reforming the Use and Ethics of Contingency Fees with Tort Reform. As discussed here, p/i lawyers try to link the two in order to avoid the ethical problems inherent in the current contingency fee system.
3) In looking at the overall situation to “find out if contingent fees are really out of control,” keep in mind that the legal ethics of contingency fees concern the relationship between the individual client and his or her lawyer in each particular case, and not global numbers about supposed average earnings of plaintiff’s lawyers, nor the high profiles cases that involve billions of dollars in fees. ABA Formal Ethics Opinion 389 (1994) recognized the basic proposition that reasonableness relates directly to risk in each given case — this principle has been ignored in practice by the adoption of standard contingency fee levels in each community. (See, e.g., this, this and that.) When looking at the big picture, please don’t forget the average personal injury victim, who should pay a reasonable fee for legal serivces and not have to give the lawyer a large partnership interest in every injury claim.
4) An attorney cannot justify being overcompensasted in one case by claiming that doing so allows taking riskier clients in other cases. Model Rule 1.5 does not include such subsidy notions in its consideration of reasonableness. Nor does Canon 5 of the Lawyer’s Code of Professional Responsibility, which specifically states (emphasis added) that “Neither the lawyer’s personal interests, the interests of other clients, nor the desires of third persons should be permitted to dilute the lawyer’s loyalty to the client.” This ethical and fiduciary loyalty applies to fees as well as to all other aspects of the lawyer-client relationship. Furthermore, in a world where p/i lawyers carefully sort out and reject the riskier cases (and those where the damages are unlikely to be great), the existence of such charitable impulses is highly questionable.
5) Be wary of statistics purporting to show how fair contingency fees are on average. As argued here, the most widely quoted study on the issue (by Prof. Kritzer) is based on very faulty premises and numbers.
6) Listen to advocates for legal consumers, such as HALT, who believe that clients deserve to be fully informed of their rights and options, and all relevant facts (such as the likelihood of winning) before entering into contingency fee arrangements. Please recognize, on the other hand, that Public Citizen (a plaintiff in many major injury cases) has not acted as a consumer advocated, but has instead consistently taken the party line of p/i plaintiff’s lawyers, when it comes to contingency fees. It has never attempted to fix the abuses in the system. See this posting.
7) Take a close look at the Florida experiment in contingency fee regulation, which has been in effect for several years and should yield important data and conclusions.Under the Florida Bar Continency Fee Rules, clients entering into contingency fee arrangements have greater protection than in any other State, including a Statement of Client’s Rights for Contingency Fees (explaining, among other things, that there is no set percentage fee and that the client has the right to negotiate the fee level), a 3-day “cooling off” period to reconsider after signing an agreement, and step-down maximum fee levels as the amount awarded increases. (see Rule 4-1.5)It would be very helpful to know whether these rights and rules have (a) replaced a standard fee percentage with fees tailored to the risk in each case; (b) empowered clients to negotiate fairer fees; (c) created open price competition among p/i lawyers; and [added 01-08-04] (d) resulted in an inadequate supply of competent lawyers willing to act as plaintiff’s counsel in p/i cases If so, there may be no need for complicated and restrictive rules like those suggested by Common Good.Similarly, check out the new Arizona rules, to see if they are improving the use of contingency fees.8) Don’t be confused by those who shout that there really is no “standard contingency fee.” An objective study on the topic might help clear the air. See this.
9) When those opposing contingency fee reform say things like ‘They don’t give a damn about the people they kill and maim. It has everything to do with stopping the filing of lawsuits. It has nothing to do with the victims’ receiving more money” (reprinted here, from the Miami Herald, Jan. 4, 2004), and tell you that contingency fee reform will prevent injured clients from finding “good” lawyers, ask them why “good” lawyers aren’t willing to take a contingency fee percentage that is in line with the risk presented by a particular case. Ask them how the maximum fee allowed in each jurisdiction got to be the fee offered to each client as a fait accompli and why there is no mention of fee percentages in all those Yellow Page ads.
The following postings from this site are most relevant to the work of the Task Force:
I’m sure I’ll come up with a few more suggestions as 2004 progresses, but this should hold you for now. Questions and comments are welcomed, as always.
Afterthoughts (01-08-04): The Task Force will almost certainly hear a chorus that says “a contract is a contract” and contingency fees should never be reduced once the client agrees to a particular percentage rate or rate structure. That topic is discussed briefly here. Courts have always asserted the right to decide at the conclusion of a matter whether a contingency fee is excessive. Model Rule 1.5 says (emphasis added) “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee.” This clearly suggests that a fee that seemed reasonable when the agreement is first made could be deemed excessive and unreasonable when billed or collected (if, for example, the matter is settled with far less attorney work or for a far great amount of damages than initially expected — as in the recent Massachsetts Tobacco Settlement fee dispute). Of course, the more fully informed the client is when entering into the contingency fee arrangement [using the checklist and principles in ABA Formal Ethics Opinion 389 (1994), which are discussed here], the less likely that the results would be deemed to be unreasonable.
No one’s going to get rich taking these cases, and the lack of court-appointed lawyers won’t be totally solved. But, managing partners might now be more willing to allow idealistic younger lawyers to serve as law guardians for children or appellate lawyers for criminal defendants. And, experienced attorneys, who are after all ethically obligated to help ensure legal services for all persons, might be inspired to take an appointed case or two. (See Rule 6 of the Model Rules of Professional Responsibility and Ethical Consideration 2-29 of the Model Code.) If more lawyers sign up to be on the panels of court-appointed attorneys, poor clients should get better representation and our courts should run more smoothly and quickly. That’s a pretty good use of taxpayers dollars. Even I have to admit it.
Power Line offers a summary of the oral argument yesterday in the case brought before the Minnesota Supreme Court by attorney Elliot Rothberg, challenging the State’s anti-bias CLE requirement (discussed by us here yesterday). The notes were compiled by lawyer Peter Swanson, who filed a friend-of-the-court brief supporting Rothberg, which can be found here.
It’s a thoughtful summary, touching on the core issues presented in the case. If I had to guess based on Swanson’s notes and my own analysis, the Court will uphold the CLE requirement.
-e&h-
thanks to the (youthfully) venerable Robert Ambrogi for welcoming the return and new persona of this weblog. Bob did us the unique honor of penning a haiku for the occasion:
Blog land seems quiet —
Muteness of ethicalEsq.
No more! David’s back.
Having demonstrated yet another talent, maybe we can convince the very busy Ambrogisan to become an Honored Guest for our HAIKUesque feature.
Bag & Baggage was just chosen 2003 Site of the Year by NetLawTools.com, and nobody deserves the award more than Denise Howell [along with her (in)sidekick, Tyler]. Denise has shown us that a weblog aimed at lawyers can both inform and entertain, while having a unique voice, demonstrating technology, and making readers and colleagues feel like friends.
My hearty congratulations also go out to all the honorably mentioned. Here’s the announcement:
2003
Site of the Year: Denise Howell’s Bag andBaggage is a leader among legal blogs, with a light (though sometimes cryptic) writing style that attracts legions of readers. The large number of high quality legal blogs made selecting this year’s winner unusually difficult, with sites named in previous months and beSpacific, ethicalESQ, Ernie the Attorney, Dennis Kennedy, Tom Mighell, Tech Law Advisor, Larry Bodine, Mad Kane, Lawrence Lessig and others all producing excellent resources.
Naturally, I’m very pleased to be on the list and in such good company. It would be traditional to say I’m humbled, but I’m supposed to be an honest lawyer.
P.S. FedLawyerGuy Jerry Lawson wrote a Comment I’d like to share, along with my response:
Jerry: Fortunately, my state bars do not require such course. I would be an unhappy camper if they did.
In some federal agencies all employees are required to take such classes. Every such class I’ve seen has been terrible–so bad as to be a waste of time, and insulting to boot. I’m doubtful that the quality of instruction would be better in the CLE context.
David: Hi, Jerry. I sat through federal sensitivity classes, too, and they went from terrible to well-done. The difference here is that there is no such thing as “such classes” — there are literally hundreds of ways to fulfill the requirement, from seminars to drama to rallies, etc. We had no chance as federal employees to create our own sensitivity curriculum or to reject the official point of view. Here, the “opponents” have created approved sessions that get sell-out crowds and rave reviews.
Using limited, filtered facts, virtually any requirement, law, decision can be made to look silly. But, a broader, fairer perspective often shows that pilloried proponents weren’t necessarily so foolish.
P.S. FedLawyerGuy Jerry Lawson wrote a Comment I’d like to share, along with my response:
Jerry: Fortunately, my state bars do not require such course. I would be an unhappy camper if they did.
In some federal agencies all employees are required to take such classes. Every such class I’ve seen has been terrible–so bad as to be a waste of time, and insulting to boot. I’m doubtful that the quality of instruction would be better in the CLE context.
David: Hi, Jerry. I sat through federal sensitivity classes, too, and they went from terrible to well-done. The difference here is that there is no such thing as “such classes” — there are literally hundreds of ways to fulfill the requirement, from seminars to drama to rallies, etc. We had no chance as federal employees to create our own sensitivity curriculum or to reject the official point of view. Here, the “opponents” have created approved sessions that get sell-out crowds and rave reviews.
Using limited, filtered facts, virtually any requirement, law, decision can be made to look silly. But, a broader, fairer perspective often shows that pilloried proponents weren’t necessarily so foolish.
Spitbull suggested in a New Year’s Day post that lawyers don’t need Continuing Legal Education (CLE). She says: [A profession is an] occupation whose members have special privileges, such as exclusive licensing, that are justified by the following assumptions: 1. That its practice requires substantial intellectual training and the use of complex judgments. 2. That since clients cannot adequately evaluate the quality of the service, they must trust those they consult. 3. That the client’s trust presupposes that the practitioner’s self-interest is overbalanced by devotion to serving both the client’s interest and the public good, and 4. That the occupation is self-regulating — that is, organized in such a way as to assure the public and the courts that its members are competent, do not violate their client’s trust, and transcend their own self-interest.” [quoted here, at 10] As usual, my chief concern is for the “little guy or gal” client, who are not using high-powered, elite lawyers. Many of those clients have no way to judge the capabilities of a lawyer before or after their matter is completed. As was stated in the NYS Committee on the Profession and the Courts, Final Report to the Chief Judge (Nov. 1995) (at 27): A lawyer’s obligation to continually hone professional skills and keep abreast of developments in the law is a central element of professionalism. Notwithstanding the many educational programs available to the bar and judiciary, practitioners, judges, clients and grievance committee counsel each identified incompetence as a substantial deficiency within the profession. For this reason, the Committee endorses previous proposals for the adoption of a mandatory continuing legal education requirement.” Many lawyers will be in practice for 40 to 50 years after graduating from law school. [Indeed, many elderly lawyers will need both competency and competence tests.] To leave it up to the individual lawyer to stay abreast of changes in the law, and to adequately prepare to expand into new areas, is totally unrealistic. The sloths and shirkers are quite pleased when the fraction comprising the profession’s highly-competent and motivated attorneys assumes that everyone is as diligent and responsible as they are, or they just don’t care about the clients served by the lower percentiles of the profession. We can’t pretend to be a “learned profession” while letting our members stop all supervised training after three years of schooling. I’ve seen far too much incompetence (as a law clerk, attorney advisor, general and family practitioner, supervising attorney, hot-line advisor, and mediator) to believe there is no serious problem. And, I’ve seen too much of the disciplinary system to believe that vigorous oversight will ferret out incompetence lawyer by lawyer, except in the most egregious cases and with savvy clients. Mandatory legal education is not a perfect solution, but it sure beats allowing the profession to ignore the failure of many of its members to acquire and maintain competence in the areas in which they choose to practice.
CLE might not be a panacea, but it just might be a kick in the pants. If the quality of CLE is low where you practice, then consider it an opportunity to put together a better product — it would be a good way to serve your profession and the public, and perhaps create a name and a network that will help your career.
Whatever you do, stop whining about CLE. The coffee’s getting better, and the pastry, too.
Update (01-06-04): Spitbull responds here to this post. She correctly points out that CLE is not a certain method for assuring competence, but it’s hard to imagine ever achieving a system that could make every lawyer in America (over a million of them)competent. It would take a revolution to achieve re-certification or specialty testing, and there will never be enough money or will to create effective competency policing. Check our Discipline Resources to see just how badly the system needs improvement, and a few modest suggestions for reform.
The legal profession has a lot of serious flaws, but gender bias does not seem to me to be one of them. Sure, there are individual lawyers who are gender chauvinists, but compared to the rest of society, we have every right to be proud of the gender equality and neutrality that exists today in the legal profession. (You have not been directed to the wrong site; this is the ethicalEsq weblog.)
As is often the case, the starting point for this train of thought was an interesting post by Scheherazade Fowler yesterday at Stay of Execution, and the responses to her musing and questions — including Comments at Sherry’s site, and postings elsewhere, such as My Shingle and Unbillable Hours. Apparently, a Chapter 13 bankruptcy trustee recently mentioned to Sherry that there might be a gender problem in bankruptcy law because he saw so few women entering or staying in the field. As usual, Sherry seems more perceptive than many elders in the profession, and focuses on the most important issues:
Just last week, when looking over materials from a “diversity workshop” attended by the thirteen-year-old daughter of friends, I told Anny something like this: “I’m really glad that you’re learning to respect people of all kinds and to treat them all without bias. But, please remember that people who go through life seeing everything through the prism of a mistreated minority see many problems and slights that just don’t exist, or simply make themselves far more miserable than they need to be.” In a world where the majority of law students are female and there are examples of successful women in every facet of the profession, fretting over gender gaps and “imbalances” seems like misplaced priorities and professional masochism to me.
Richard Ames left a particularly tart Comment at Sherry’s weblog:
The old guard men are getting old, retiring, dying in droves. I don’t see condescending behavior toward women among my male contemporaries anymore than they are likely to be condescending to me or any other man I know. Women in the profession who think they aren’t being “taken seriously” would do well for themselves if they stopped dramatizing “women’s roles” in the law, and simply got on with practicing it.
Afterthought (01-04-04): Carolyn Elefant asked on her site yesterday whether there was anything unethical in trying to build a business by catering to the gender or ethnic preferences of clients. My reply there was as follows: “I see nothing inherently wrong with using gender or other demographic characteristics to build a business. A client’s comfort level or other preferences are important. A problem would arise, I’d think, if the lawyer were misleadingly suggesting that his or her demographic characteristic(s) would assure better results, or if the marketing were done in a manner that demeans any group, or suggests that the lawyer is practicing unlawful or unethical discrimination or would pander to the client’s bigotry.”
The legal profession has a lot of serious flaws, but gender bias does not seem to me to be one of them. Sure, there are individual lawyers who are gender chauvinists, but compared to the rest of society, we have every right to be proud of the gender equality and neutrality that exists today in the legal profession. (You have not been directed to the wrong site; this is the ethicalEsq weblog.)
As is often the case, the starting point for this train of thought was an interesting post by Scheherazade Fowler yesterday at Stay of Execution, and the responses to her musing and questions — including Comments at Sherry’s site, and postings elsewhere, such as My Shingle and Unbillable Hours. Apparently, a Chapter 13 bankruptcy trustee recently mentioned to Sherry that there might be a gender problem in bankruptcy law because he saw so few women entering or staying in the field. As usual, Sherry seems more perceptive than many elders in the profession, and focuses on the most important issues:
Just last week, when looking over materials from a “diversity workshop” attended by the thirteen-year-old daughter of friends, I told Anny something like this: “I’m really glad that you’re learning to respect people of all kinds and to treat them all without bias. But, please remember that people who go through life seeing everything through the prism of a mistreated minority see many problems and slights that just don’t exist, or simply make themselves far more miserable than they need to be.” In a world where the majority of law students are female and there are examples of successful women in every facet of the profession, fretting over gender gaps and “imbalances” seems like misplaced priorities and professional masochism to me.
Richard Ames left a particularly tart Comment at Sherry’s weblog:
The old guard men are getting old, retiring, dying in droves. I don’t see condescending behavior toward women among my male contemporaries anymore than they are likely to be condescending to me or any other man I know. Women in the profession who think they aren’t being “taken seriously” would do well for themselves if they stopped dramatizing “women’s roles” in the law, and simply got on with practicing it.
Afterthought (01-04-04): Carolyn Elefant asked on her site yesterday whether there was anything unethical in trying to build a business by catering to the gender or ethnic preferences of clients. My reply there was as follows: “I see nothing inherently wrong with using gender or other demographic characteristics to build a business. A client’s comfort level or other preferences are important. A problem would arise, I’d think, if the lawyer were misleadingly suggesting that his or her demographic characteristic(s) would assure better results, or if the marketing were done in a manner that demeans any group, or suggests that the lawyer is practicing unlawful or unethical discrimination or would pander to the client’s bigotry.”
Even on New Year’s Day, and despite sundry resolutions, it can be difficult for an old cynic to see the glass as half full. Nonetheless, I tried very hard yesterday to put a good face on this legal discipline story out of Nashville, TN, which was discussed by Consigliere (01-01-04).
The New Me wants to say “Hooray, the disciplinary system works, and even retired appellate judges will be sanctioned for misconduct.” But, skepticalEsq rolls his jaundiced eyes and mutters that “The Old Boys Club has slapped one of its members on the wrist again — and taken years to do it.”
It seems that Charles F. Galbreath, a former Tennessee Court of Appeals judge, who has practiced law since 1947, was displeased with the trial judge in a contract case in which Galbreath and his wife were defendants in 1997. When the judge refused to recuse himself, Galbreath decided to seek assistance from other members of the judiciary. Among other things he did, according to the decision in this case:
Galbreath wrote a letter to then Chief Justice E. Riley Anderson and sent copies to counsel for the Court of the Judiciary and to Kilcrease. In addition to requesting the Chief Justice’s permission to bypass Kilcrease in any future suits he may file, Galbreath admonished the Chief Justice and threatened him in the following specifics:
1. After chiding the Chief Justice for the Supreme Court’s failure to designate him to preside in cases, Galbreath threatened to file a complaint in the Court of the Judiciary against the Chief Justice should the Supreme Court continue to exclude him from designation;
2. Galbreath threatened to publish his grievances against the Chief Justice on his radio program7 should the Chief Justice fail to respond with a “fair approach” to the demand; and
3. Galbreath attempted to pressure the Chief Justice to procure Kilcrease’s recusal.
Lawyer Galbreath was also cited for referring to a female judge as “Honey,” during a regular court proceeding. After a short recess, he apologized, explaining that “it was his custom to address ‘nice looking women’ as ‘honey.'” By the way, Galbreath had been sanctioned for misconduct on three prior occasions.
Galbreath admitted all of the facts, but refused to ackowledge that any of the conduct was wrongful, and he appealed the Board’s decision to suspend him from practicing for 30 days as excessive. According to the Nashville Tennessean, Galbreath said “he was surprised and disappointed by the state high court’s decision.”
In its opinion [Charles F. Galbreath v. Bd. of Prof. Responsibility (12-29-03)], the Tennessee Supreme Court concluded that Galbreath “clearly attempted to subvert the legal process to his will,” showed a “lack of respect for the judicial office and its processes,” and “inflicted grievous injury upon the judicial process and upon the office of the Chief Justice.” Finding that aggravating factors also existed, the Court concluded that the thirty-day suspension of Galbreath’s privilege to practice law “is appropriate.”
Appropriate? Was the Court acting like Blind Justice or the Blind Umpire? Santa or Grinch? Or, was lawyer Galbreath another one of those persecuted solo practitioners that my friend Carolyn Elefant worries about in every season?
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