Monday, January 15, 2007

Attorneys fees and settlements

Have you ever been involved in a case that should be settled but isn't?

Many times the reason for this side or the other (or both) are not in a "proper" fee arrangement with their attorney. Sometimes, it might be YOU who is not in a proper agreement. I prefer situations where everyone is acting like big boys and girls, but sometimes a party is acting like a baby....they are not seeing reason, or making a reasonable offer, or accepting a reasonable offer, or even negotiating, just.......BECAUSE. And the extension of this is because...they can. Lets look at a few scenarios:

1. If there is no consequence to the client in being unreasonable, sometimes their strongest negotiating position is to be just that. In a civil litigation (I am leaving aside personal injury cases with insurance....more on that tomorrow), if both parties are paying their attorneys hourly, they should behave like adults. Sometimes one of the attorneys is on a contingency (generally the plaintiff, though I have seen reverse contingencies for a defendant), and if the plaintiffs attorney did not get strong client control from the outset, the client will cheer him on and may mis-behave. Conversely, if the defense counsel is a family member, or is "doing a favor for a good client" (slap yourself in the face if you hear yourself saying this), the client has a disincentive to negotiate properly.

2. In small matters, the ones that start out "just write a letter", you can't finish the matter properly because nobody is paying as they go, and all the details get magnified. The clients are asking the lawyers for more and more, and you could stop them with a bill, but its not that kind of case. STOP GETTING INVOLVED IN THESE SITUATIONS...... OK, I'm yelling at myself here, but if you do this, you know what I mean....stop before you start.

3. You got a retainer, started to work, but those further hourly bills are hard to come by. Until the client gets the second bill, he doesn't respect your time. If you want to control litigated matters, keep time, bill timely, and don't apologize for it. You can give your best to all your clients if you have time to give, and you will not have time if you don't control it.

4. Sometimes the clients are willing to pay, and are paying, and they are still acting irrationally and the attorneys are cleaning up. These are called "matrimonial cases". I respect matrimonial cases and the specialists who handle them, and never begrudge them their monstrous incomes. They earn it, the clients are not happy to pay them, but they understand it. The surest way for a generalist to learn about why hourly billing is important, and how cases don't settle if you don't bill properly, is to "dabble" in some matrimonial cases.

There are a few things to learn from all this. First, control your clients and your billings. To the extent you have problems with this, actively work on improving it. Second, pay attention to your adversaries attorneys fee situation. I always try to assess this at the outset. Clients are always puzzled when I ask whether they know the relationship between the adversary and their attorney, but I consider this valuable and important. Third, pay attention to what has and has not been working for you. Don't beat yourself up over mistakes, we all make them, but for G-d's sake, LEARN from them. insurance insurance

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