Legal Practice Styles
Legal fees are determined by the amount of time spent on the client’s problem. Ideally, the amount of time is a function of the complexity of the client’s problem. However, an important secondary determinant, which can account for 50% or more of the fee in a case, is the practice style of the law firm. Law firms have a powerful incentive to generate hourly billings.
Clients should be especially wary of “wolf packing,” which occurs when the law firm assigns more than one attorney to the same piece of work. This is most obvious when several attorneys attend the same meeting or court hearing. It is less obvious when the client is billed for conferencing by several different attorneys, when the conference is actually a firm meeting. The client should ask the attorney to explain which additional firm members may be involved in the case and their specific expertise. If possible, the client should be introduced to everyone who will work on the case, including the paralegals.
A more controversial practice is the padding of hours. For example, an attorney who is supposedly being paid by the hour will charge for drafting a document that is actually printed up by a secretary from a form file. He or she may charge, say, 5 hours for a piece of work that takes only 30 minutes. This practice is justified as amortizing the cost of the work over all the clients who benefit from it. Unlike traditional amortizing, the first client to request the work probably paid the full cost of drafting the document. Moreover, there is no time when the document is deemed fully amortized and becomes a free service to future clients.
“Dilatory practice” is the legal euphemism for wasting time. It occurs for a number of reasons: time may be wasted because a witness, or even the client, cannot be found or it may occur because of disorganization and a failure to do long-range planning. Plaintiffs’ cases usually deteriorate with time. In the worst case, the plaintiff or a critical witness will die, making it difficult to try the case effectively. Unless there is a strategic reason for the delay, wasted time costs plaintiffs and their attorneys money.
In contrast, delay can be rewarding for defense attorneys. Defenses get stronger as time erodes the plaintiff’s case. Death can transform a multimillion- dollar injured- baby case into a “dead baby” case worth very little. Witnesses disappear, lovable children turn into surly adolescents, and grieving widows remarry. The insurance company benefits from the delay if the cost of reinsuring the risk of the unpaid claim is less than the income they can earn on the money that will be needed to pay the claim. Defense lawyers personally benefit because delayed cases require constant maintenance, with the attendant opportunities to bill the client.