Shooting Yourself in the Foot

One of the earliest “learned professions” in the Western world is the law.  A reading of ancient history from the earliest beginnings of Western civilization will reveal allusions to lawyers.  Popes, kings and feudal governments in medieval Europe relied heavily upon lawyers to guide them.  Yet, from early days and primarily because of the educational and status advantages lawyers held over most of society, the profession has suffered from poor public opinion and criticism; literature and in popular culture with the onset of the “lawyer joke.”

Probably the most often misquoted line from literature is from Shakespeare, ‘The first thing we do, let’s kill all the lawyers.’ (Dick the Butcher in ‘Henry VI,’ Part II, act IV, Scene II, Line 73)   Although the quote alludes to corrupt lawyers who threatened the system, it is used modernly as an affront to the entire profession.  The unfortunate spread of offensive humor aimed at lawyers is most often originated and uttered by clients damaged by the profession.   An offended client suggesting improper conduct of the lawyer is typical of why the profession has become the butt of criticism and evil humor.

Those who seek the assistance, protection and counsel of lawyers are sometimes in the most vulnerable positions of any person possibly second only to an injury victim on a gurney in an emergency room.  People and it is suggested, most particularly people in modest civil and most family law disputes, are most often vulnerable to the promises and representations of attorneys.  Those people place their lives and their fortunes in the hands of professionals to gain some form of protection from losing things that have worked their entire lives to achieve.  When I was in active practice, I frequently described the relationship with clients as something akin to marriage.  The trust between the attorney and the client must be absolute.  The client must be able to place his or her fortune and interests in the hands of the one person in the world that has absolute fiduciary duty to protect that client zealously.  When that trust is violated and the attorney places his or her financial interests ahead of the representation of the client, the lay client is frequently left at sea in a rudderless craft.  Most frequently that violation of trust comes in outlandish and unconscionable billing practices.  The undertaking of and, tragically, failure to complete sometimes unnecessary tasks or incompetently pursued remote remedies while imposing charges upon the client that go beyond the realm of reason and are not merited by the product or the results.  Too often before the client realizes what has been done to her financially by the lawyer, the charges have been incurred whether a result has been achieved.

THE QUANDARY

Lawyers must take absolute caution when being engaged by a client to walk a thin line of assurance while,  being open and honest with the client.  The fee agreement must be clear and a signed copy of the agreement must be provided to the client at the time of engagement.   If the attorney is not careful in her representations, the entire fee agreement may be voidable at the request of the client. (Business & Professions Code §6148)   If the lawyer’s billing does not comport with 6148, the contract may be voidable.  In a case where the client successfully voids the fee agreement, the lawyer must rely upon the theory of Quantum Meruit. (See, Rosenthal v. Great Western Fin. Securities Corp., (1996) 14 Cal.4th 394, 416–417; Brown v. Wells Fargo Bank, N.A., (2008) 168 Cal.App.4th 938, 958) When that happens, the lawyer must prove that the work done was necessary and proper and, I suggest, properly done.

The reader will not be surprised to know that if the lawyer must justify his billing, he had better keep meticulous billing records that comply with 6141, otherwise there is a good chance they will be rejected by an arbitrator (or court) upon which the trier of fact will value the work done.  But even if the attorney can produce meticulous billing, she must be able to prove (that old burden of proof again) that the fee was not exorbitant or unconscionable.  The reader may be happy to know this is a concept unique to California law.

 After taking a case, the lawyer should take careful aim at the goal of the client to make certain that the cost of the case to the client is merited by that goal.  If the attorney’s litigation plan or actual performance causes the cost of the case to render the client worse off after the litigation than before, the attorney may well be forced to disgorge that which has been collected from the client or to walk away from excessive fees. (See, Bushman v. State Bar, (1974) 11 Cal 3d 558, 563; Tarver v. State Bar (1984) 37 Cal 3d 122, 134; Matter of Silverton, (Rev.Dept. 2001) 4 Cal. State Bar Ct.Rptr. 252, 257–258)  The “outlandishness” of a fee charged by an attorney is most readily judged by examining both its procedural and substantive aspects; as with other contractual arrangements, the less evidence there is of substantive unconscionability, the greater the need to show procedural unconscionability, and vice versa. Prof.Conduct Rule 4–200. (See, Cotchett, Pitre & McCarthy v. Universal Paragon Corporation, (2010) 187 Cal.App.4th 1405)  “Procedural unconscionability” refers to inequality of bargaining power which gives no meaningful choice to weaker party.”  (Shaffer v. Superior Court, (1995) 33 Cal.App.4th 993) 

I have been a fee arbitrator in Riverside for many years; one comment made by an attorney stands out in my memory:  “[the fee] is my money!”  Said even though no determination had been made.  Attorneys must remember, “The right to practice law is not a license to ‘milk the unfortunate.’” (Matter of Silverton (Rev.Dept. 2001) 4 Cal. State Bar Ct.Rptr. 252, 258; Bushman v. State Bar (1974) 11 Cal 3d 558, 564–565)

If the lawyer is not very careful in how she proceeds, she may subject herself to a very subjective decision by a trier of fact who, by the nature of the dispute, will undoubtedly favor the client.

OK, SO WHAT DO WE DO?

Before a client walks through an attorney’s office door for that first meeting, the attorney must have in mind all of the alternatives available to the client.  “ An attorney should advise a client of ADR ‘at the outset of the relationship’ and, when appropriate, during the course of litigation.” [State Bar California Attorney Guidelines of Civility and Professionalism § 13]” It is easy for us to succumb to the temptation of a big fee in a case we can, through our wits and skill, keep small.  At numerous places in the Rutter Group: Civil Procedure Before Trial, contains statements such as found at 1:25, “The client should be given an estimate of the cost, time and effort likely to be incurred in litigation. The possibility of early negotiations toward settlement and other alternative dispute resolution (“ADR”) procedures should be explored. Seeking settlement should not be viewed as a sign of weakness, but rather as an intelligent evaluation of the risks vs. benefits of litigation.” (emphasis mine)  Rutter continues at 1:31 to state, “The client should be made aware of alternative forms of dispute resolution (ADR) that might be utilized to reach the legal objective sought: e.g., mediation, arbitration, neutral fact-finding, etc. If such procedures would be appropriate to the case, they should be explained to the client and evaluated as viable alternatives to a lawsuit.”

The reader familiar with my usual subject may have thought that I changed course.  I have not.

When a lawyer dismisses ADR solutions (particularly in an era of troubled courts) without giving the client an objective opinion about what is best, the lawyer is not serving the client.  He may also place his interests before the client.  (“The litigious spirit is more often found with ignorance than with knowledge of law.“  –Cicero)  Moreover, attorneys are figuratively shooting themselves in the foot by not taking advantage of an opportunity to relieve their clients of the financial and emotional stresses of litigation, the costs, and uncertainty of litigation.  I suggest that if attorneys do so with the same enthusiasm they do when proceeding in the litigation mindset, business will flourish.  Few clients, I propose, would opt to go through the misery of litigation if the case can resolve.  An allusion I made in a previous article follows:  Abraham Lincoln was a very practical trial lawyer; an attorney who urged mediation.  When asked by others if mediating cases and peace-making wouldn’t hurt his law practice, he said, “There will still be business enough.” Lincoln urged mediation in his largest cases.  In Superfine Flour, though he had a good case to litigate, he told his client: “I certainly hope you will settle it. I think you can if you will….”  He went on to say,  “By settling, you will most likely get your money sooner; and with much less trouble and expense.”  Regarding most cases Lincoln said, “Persuade your [clients] to compromise whenever you can.  Point out to them how the nominal winner is often the real loser–in fees, expenses and waste of time.” (All quotes dated circa 1850)

Yes, attorneys should remember to let their clients know that if they prevail at trial, the judgment may appear to be significantly larger (nominal winner) than a settlement offer, but after costs and expenses “lawyers’ math” will prevail and the recovery the clients appreciate is often less than if they had accepted a relatively modest settlement offer.  It should also be added that the settlement would come without the risk of trial.

Competent, efficient, and affordable ADR Services are available in almost every Southern California community who can help attorneys resolve cases for their clients.  These proceedings, whether by way of a private trial, private hearing, arbitration or mediation, will be the faster way to resolution.  The attorneys must also inform their clients that by taking their cases to mediation with an experienced mediator, that client and his opposition will have the flexibility to select remedies that many times are not available through trial.

The moral:  Don’t shoot yourself in the foot.  Put the client first which includes information about all of the risks, costs and tribulations of litigation accompanied by professional advice that will allow the client to make an informed decision.

*Illustration printed with permission of the Artist

                        author

Donald Cripe

Donald Cripe is a Law Professor (Mediation/ADR), Univ. of La Verne College of Law; Superior Court Judicial Arbitrator since 1996—having conducted several hundred arbitrations; Settlement Judge since 1996; Family Law Mediator-Riverside Superior Court Mandatory Dispute Resolution Conference Program; General Mediator-Dispute Resolution Services, Riverside; Civil Mediator- Riverside County Superior Court; Riverside… MORE >

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