Tag Archive | Fees

A Good Article Regarding Lawyer Fees from “Above the Law”

I have in my office a framed print of the classic New Yorker cartoon: “You have a pretty good case, Mr. Pitkin. How much justice can you afford?” I often find myself referring to the cartoon when talking to prospective clients.

For one thing, the joke is a light-hearted way to broach the subject of fees. This can be a difficult or awkward subject, yet it is critical that prospective clients understand the fees involved in a representation. Whether you are handling a matter on a contingent fee, a flat rate or hourly basis, or otherwise, clients need to know that nothing comes for free. If you can’t have a frank and detailed discussion about your fees and expenses, you inevitably will have trouble collecting. For lawyers who are opening a new solo or small firm practice, understanding the perils of working for free is one of the hardest but most important lessons to learn.

Tom Wallerstein

The joke also is helpful because many clients appreciate a lawyer who is self-deprecating and doesn’t take himself too seriously. I have found that acknowledging the negative stereotype of lawyers, and why the stereotypes justifiably exist, is helpful to gaining a client’s trust. Rather than tiptoe around the elephant in the room, I prefer to expressly acknowledge the profit incentive I have whenever I recommend a certain course of action. I like to think that gives me more credibility. “Yes, I am recommending a strategy that is going to cost a lot of money in legal fees over the next several months. Here’s why I believe that strategy is in your best interest….”

Although most sophisticated clients know better, others can’t help but distrust all lawyers as greedy con-artists. A lawyer who recognizes and appreciates this stereotype is better positioned to allay client fears by confronting them directly. Clients understandably worry that they’re going to get ripped off. I acknowledge that and explain to clients what steps they can take to ensure they don’t get overbilled by me or any other lawyer. Those steps only go so far, however, and ultimately the client has to trust the lawyer in what I call the “look you in the eye” moment, or moment of truth.

The joke’s phrase “how much justice” also invites a discussion about how justice is relative. Every litigation client wants to win, but they don’t always immediately understand that winning is relative. I find it helpful to talk to the client about what winning really looks like in the matter at hand. For a civil defendant, winning might mean a dismissal of the complaint with prejudice. Winning might mean a reasonable settlement. Winning might even mean a judgment for plaintiff, but for less than a certain amount or upon certain acceptable conditions. Winning might mean deferring resolution for a certain amount of time.

Finally, the joke is helpful in leading a discussion about how there often is more than one viable strategy for handling any given matter. The serious point of “how much justice can you afford” is that different strategies, and desired outcomes, require different budgets. The joke is funny because it obscures the relative nature of “justice.” In reality, it is appropriate to ask “how much do you want to spend” when considering the strategy and result you want to try to obtain.

Even obtaining the best case result — for example, a dismissal with prejudice — entails a cost in terms of time, energy and fees. Maybe you collect or maybe you pay. But since it costs a lot to win, and even more to lose, clients need to carefully consider their strategic options by carefully weighing their choices. We chuckle, but I find it helpful to ask, “how much justice can you afford?” Clients seem to appreciate it when I acknowledge that it might not make sense to win the case at a cost that exceeded the prospective liability. In other words, “we can win, but it would cost you more than it would cost you to settle.” Clients generally don’t like hearing that, but they do appreciate the candor.

I’ve explained before that I try

to work closely with our clients to understand their goals, their tolerance of risk, and their budget constraints. We urge our clients at all times to consider their exposure, risk of loss, and attorney fees they will incur to achieve their goals. Our case assessments necessarily consider these factors, as do our strategic recommendations.

Sometimes clients will respond to that by pushing back and insisting that they want to win “at any cost.” “Tell me the cost, I can pay,” they proclaim. To that, I usually joke “music to my ears!” Again, I hope that acknowledging my own economic interest helps build trust.

Rather than leaving no stone unturned and pursuing an undefined victory at any cost, client-centric firms can instead recognize that justice is relative, and always comes at a price. They can contrast their approach with a sometimes predictable Biglaw litigation model. Too often, firms follow a rather consistent litigation playbook. They insist that the first step in every case is always to gather and review every conceivably relevant document, often with a team of junior attorneys. They insist on propounding kitchen-sink discovery, obtaining and reviewing every conceivably relevant document from the adversary, again billing every step of the way.

Admittedly, especially in high stakes cases, this may well be the right approach. But not always. More creative firms and boutiques sometimes have more flexibility in designing litigation strategy. I’ve written before how they can sometimes capitalize on this by exploiting their adversary’s predictable litigation formula.

Attorney jokes will never go away, thankfully. As a profession, we certainly deserve them. But attorneys who are willing to view the world through the eyes of their clients can gain trust simply by asking, “how much justice can you afford?”