Indiana Supreme Court – Choosing a Justice [update]

One thing that has struck me about the many discussions over naming a woman to the Indiana Supreme Court, including today’s (7-10-12) Star editorial, and the Indiana Law Blog’s* recent post of John Trimble and Federal Judge Jane Magnus-Stinson’s comments is that something is still missing in the analysis.

The Indiana Supreme Court is a team (I will start by discounting the use of sports analogies as they minimize the topic in some eyes, but will end up using that analogy because it fits so well). This is a five person group assigned by Indiana’s State Constitution with making some of the most profound decisions in the state’s history.

Using the sports team analogy, since it fits in so many ways, there is another five person activity that the people of Indiana understand. If Larry Bird, NBA Executive of the Year, would have thought that every spot on the Pacers roster had to be filled with a Roy Hibbert, (7’0” center) style tall player, because the tall guy was the Best Available Player each time the choice came up, and without taking into consideration the roles that the team needed to be successful, Bird would have lost credibility, and the resulting team would not win very many games.

Every coach and general manager of a team sport builds the team based on the totality of the needs of the team, a basketball forward without a strong point guard suffers, a football team of only quarterbacks is weaker than one with linemen and receivers. A volleyball team without a setter, a digger and a hitter is in trouble.

If the Supreme Court was like the Olympic swimming team, it could take the best in every event. But the swim team is a very different kind of team than a “team sports” team. Michael Phelps does not swim slower if Dara Torres loses, but the Pacers and Hibbert do play poorer if Granger and West take a night off.

Is a woman on the court a “role position?” Not in a quota system of “one woman, one person of color, three white men.” But as lawyers with trial experience, trial court judges, transactional lawyers, large firm lawyers and small firm lawyers all need to be found in the appellate court system, and on the Supreme Court, so to do women, African Americans, Hispanics, and gays. None of them should be excluded from court service, and some have the specific skills and qualifications that are needed to strengthen the Indiana’s Supreme court.

Gov. Daniels should follow the Pacers lead, even if the appointment is first thought to be a Plumlee – that Reggie Miller selection worked out, and his sister played a fair game too.

While quality and experience differ from person to person, in judging the members of legal profession, or humanity, there is never “a best” or “most qualified” candidate. And all things are never equal.

*[update, first ed. had the Indiana Law Blog name incorrect, as the Indiana Legal Blog]

What about a Fee Guarantee for Legal Services?

Would a lawyer ever agree to guarantee legal services? Why and what is it worth? Most lawyers  already provide a guarantee of many of their legal services. Does that surprise you? How the guarantee works depends on the issue involved and the fee structure.

You see it in ads every day, “No fee if no recovery in your personal injury case!” That qualifies as a fee guarantee, (not a results guarantee) and is based on the outcome of the client’s personal injury case. In exchange for the guarantee and the free consultation the value of the fee is fixed based on the outcome of the case. A fair deal for all in almost all cases.

No lawyer can (or should) guarantee the outcome of a case, there are too many variables. No “fee guarantee” or contingency fee is permitted in a criminal case, such as “no fee if you are convicted” or “money back if you go to jail”, that is an impermissible contingency fee in Indiana and most states. Likewise, a lawyer in Indiana cannot have a fee based on the success of a dissolution of marriage action. The court nearly always grants the dissolution sooner or later.

But what about other legal matters that are not prohibited? Would it make sense to have a fee based guarantee on the success of a business purchase agreement? One fee for the negotiation and a second fee based on the price or speed of closing or whatever is of importance to the client makes some sense. It could be based on the negotiation skills the lawyer brings to the table. It is permissible and is subject to the client’s understanding of the terms and agreement to the fee. If the fee is somehow contingent the rules require that the agreement be in a writing confirmed by the client.

Why did I say that most lawyers do provide a guarantee? Most lawyers will fix the mistakes they make, and they usually do it for no additional fee. That is one essence of a fee guarantee. And, naturally, a good lawyers make fewer mistakes in their work. The smarter lawyers realize that a small amount (relative to the price) of the fee is set aside for the guarantee. That amount is there. in exchange for the value of the guarantee, to cover those mistakes that do get made. These lawyers know that nobody will be perfect, and they may have to occasionally correct a mistake they, a staff member, or a third party makes, and for which the lawyer usually gets the blame. If the lawyer calculates right, she can achieve a premium result from having to correct fewer mistakes than expected over a period.

If a lawyer always corrects mistakes, but makes no promise to the clients of a fee guarantee, the premium opportunity will be gone, since clients will agree to pay more for a product with a stated guarantee. If you give the guarantee, you should tell the client about the extra value that you offer and that they get, and that you charge the client proportionately.  If the client wants to bargain for a reduction of the fee, the fee guarantee is something of value that you can negotiate away – before beginning the representation.  See if the client wants to give up the guarantee to save a few percentage points on the fee!

Law School or Not?

A little off the normal subject, but we will get around to fees eventually. Would or should you recommend a child or a friend’s child going to law school these days?

There has been a change in the legal profession over the past few years. As the housing bubble burst and the economy slowed down, things have happened in law schools great and not so great. Graduates stopped getting jobs that paid wages with little tie to the general economic forces.

New lawyers with little legal value to add to the work done for clients were being paid wages greater than the professors who taught them what they knew. Law firms apparently were buying into the concepts promoted by author Malcolm Gladwell’s book Outliers, where expertise comes in the early immersion into a field. Sometimes considered the 10,000 hour rule, a person has a chance to become extraordinary at a subject after spending more than 10,000 hours working on the skill.

One firm is alleged to demand 3,000 billable hours from its young lawyers. A legal billing expert, John Conlon asserts that a lawyer will normally spend about 3 hours in the office for every two billable hours properly produced. With the firm apparently requiring 4500 hours out of the total annual 8760 hours (8784 during the leap year), 51.3% of the year must be at the office.

I am not an alarmist, and I do not think the legal profession is falling apart. Thirty years ago people were making the same kinds of claims, such as there are too many law students, the law students are spending too much money going to law school, they are taking on too much debt, and there are not enough good jobs to feed all the graduates. I trust the marketplace over the long haul. Yes Congress has recently made the debt nondischargeable, and the amounts are bigger than they were (my educational debt was about 1/2 my first year wages). And for the recent graduates, it is tough out there. Many will leave the field of law, but they leave it with an education that will benefit them in whatever they do.

Good law grads are now moving into positions that mediocre lawyers once took, and that is good for the retail clients who need legal services. When the best and brightest went into wholesale law (working on projects that affected small parts of business operations) the retail practice (dealing with the people who actually live with the result of the legal service) suffered. Now it should get stronger, and that is good for the clients.

What does this have to do with fees? Excess supply of a fungible product drives prices down. Legal services are marginally fungible, in that for some things it does not pay to have the best and brightest. The fees for those fungible services are now more negotiable, and trending flat. The more expertise a lawyer has in the field, approaching the Outlier standard, the more value the lawyer brings to the client, and the fees are holding steady or moving up.

I might recommend to a high school student to keep the law as one option, but for the college junior I may suggest culinary school. It seems to be a good choice for the short run. Law school can wait and many good schools want students with real life experience. Having worked in a restaurant a few times, I know the owners and managers learn how to work and work hard. That is the true skill a potential law student needs to know coming into law school.

addendum

A great new article came out in the January 2012 American Bar Association Journal, written by Professor Bill Henderson at Maurer Law, and Rachel Zahorsky of the Journal.  It focuses on the economics of the law student loan programs and future of the profession. The Law School Bubble focuses on the issue from a different angle.  Good job Bill and Rachel. 12-30-11

Who is the experienced one: When the client meets the lawyer

If the lawyer is a professional in her relationship with a potential client, shouldn’t she show it by demonstrating her knowledge of the issues and the scope of the client’s legal matter by setting a proposed legal fee for the representation that she can stand behind?  A firm fee in an amount where the lawyer makes a good living for the work done, and the client can count on the fee as quoted?

As a lawyer, I need to share my professional judgment and knowledge with each potential client, to educate the potential client about the scope of the problem they are faced with, whether a lawsuit or a business transaction. Often a client thinks that the legal matter is easier to handle than my prior experience has taught me that it will turn out.  It is my duty and challenge to explain and make clear the scope of the issues involved. If I can do that, and the client realizes the potential issues that need to be tackled, then I should be able to price the legal services, to a reasonable degree if the scope of the services offered are not required to change.

If the client cannot see the potential issues or scope of complexity that will or could happen, then we may not get to an agreement for representation. There are times when a potential client gets sticker shock, cannot believe that the legal issue could cost as much as I  offer to handle the issue for. I will lose some of those clients, but they do have a good sense of what the scope of the case is, and on occasion I have had that person come back to say that I had a better explanation than the next lawyer they talked to, so I get hired. Then I have an educated client who has faith in my understanding of the matter, and a fee that finally makes sense.

The final question is whether I have a duty to price my services so the client can afford them? For most people affordability is a choice of priorities.  Is the legal issue more or less important than other expenses in the client’s life? That is a matter for the client to decide. I can change the value of the legal services, to a small extent.  I am bound by the Rules of Professional Conduct, and the skills I apply cannot be reduced even if the price is reduced, but there may be things we might be able to do, such as operate on a “no deadline” basis for your work.

My experience as a consumer and as a provider of legal services is that the client who disagrees about the importance of the work I am asked to do will not agree about the important aspects of the services I provide. A potential client who wants to have a million dollar estate plan crafted for the price of a ten thousand dollar estate plan will not be satisfied with either the product or the price, if I were to agree. Don’t worry though, I won’t.

State Bar Panel discussion

I had the privilege last week to join a panel with three of Indiana’s finer lawyers on the issue of Alternative Fee Agreements: The Ethics of Legal Billing.  With me were Judge Mike Witte, now the Executive Director of the Supreme Court Disciplinary Commission, Patrick Olmstead, of Hoover Hull, and a member of the Legal Ethics Committee, Steve Badger, of Bose McKinney and a member of the PLEADS section.

The highlights from my perspective included

• the stats from the Altman Weil group showing that lawyers who are proactive in leaving hourly billing are seeing the same or more profits at about 70%, but those who are reacting to the client are seeing less in profits at about 60%;
• the case discussions that give comfort to lawyers that flat fees, however designed, are appropriate so long as they are reasonable when agreed to and when the case concludes, are earned, and are understood by the client;
• changes to the fee that benefit the lawyer must be handled in accordance with the rule;
• and the court’s intention that as a fiduciary, the lawyer must put the client’s interests in fees in the proper perspective.

Patrick and Steve put together a great PowerPoint on the issues.

Well done team.

You make the Decision here

I received a perfect Value Pricing issue this week. A fellow lawyer had a fee question, which I get from time to time. L (short for Lawyer) takes an opponent to task for a “frivolous pleading” and the court agrees, sort of. The judge finds that the pleading was frivolous (according to L) and awards L’s client the sum of $100 to punish OP (short for opposing party) for the bad faith action. My first reaction is “Thanks Judge, where is your memory of being a lawyer?”

L asks: “How much do I make my client happy by chasing the OP and its counsel for the $100?” The lawyer’s conundrum. What do you do when a client’s choice is “not worth it” from a dollars and cents point of view?

DON’T just hourly bill it based on your previous arrangement. Have a conversation with your client. Tell C that the judge did C a small favor. Both sides know the judge agreed, but did not think it was worth the fight. Now the client has a big decision to make – do you try to collect, or hold it over OP’s head? The fact is that you will spend nearly as much time trying to collect $100 as you did proving that OP filed the frivolous pleading. Let’s say that was $500.

As a sensible lawyer you probably would not spend an additional $500 (in addition to the first $500 which an economist would label a sunk cost) to collect $100. But that is not your decision to make. Talk to your client, tell her the truth, that to collect the $100 will be more expensive than the $100, but that this is their dispute and you are not in the business of subsidizing the fights of your clients. Then do three things that are part of Value Pricing: 1) tell the client what it will cost to pursue the $100 award, in order to prove to OC that the client won that issue; 2) tell the client that this is a fundamental change in the fee agreement, so the client is entitled to a second legal opinion under Rule 1.8 of the Rules of Professional Conduct, and; 3) let the client decide.

So, you make the decision here – do you spend $500 or more (I guessed that the value of the chase was $500, it might be $300 or $800 or more) to teach the opposing party OP a lesson that the judge valued at $100? Make your comments to let us know.

What is wrong with an Hourly Fee?

The greatest reward for a client in working with a value priced fee is the certainty and transparency that occurs. If the fee does not sound right or fair, the client can walk away, or at least can consider the quoted fee to determine if there is enough value to the client to pursue the legal matter in exchange for the fees to be charged.

If a legal representation is quoted at an hourly rate, the client will have little indication of what the final cost will be. In an hourly rate fee there are two components to the final fee, the rate times the time spent on the matter. If the lawyer will not cap the total fee, the client is taking on the risks of trouble. And when the client has paid more than the case may have been worth to the client, and the case is not over, there are no good solutions. Dropping the case does not seem appropriate, after all the sunk costs, and then losing is a hard choice. But pushing on may make no sense either.

The legal matter will determine the number of hours invested by the lawyer, and paid for by the client. Drafting common documents or reviewing documents that have been prepared by another lawyer should be easily estimated. Negotiations on document is not easily estimated due to the nature some lawyer have of arguing every jot and tittle of a document. (One party to a transaction accused the lawyer of spending time grading each other’s documents – which I found in that matter to be pretty perceptive.)

The per hour fee is a measure of some worth, one that for the most part indicates the lawyer’s own sense of self-worth. I think too many lawyers suffer from a lack of self-worth for the real value they provide to clients, and will discuss that more in a future post. For some lawyers it is important to be the highest hourly fee in the community, for others it is critical to not be the highest priced. There are lawyers in our community that are worth more than the fee they currently charge, and others that are not worth the fees they charge. Calculating that on an hourly basis, rather than a case by case basis is not possible.

Is the work being done worth a premium price to the client? If a Yugo does the job for the client, then why should the client pay a Lexus price? But if the client is in a serious legal situation, whether business, estate planning or criminal, a Yugo value legal representation will not accomplish what is needed. And that is true of either a value priced fee or an hourly fee. To some extent, the value of the client’s services are a reflection of the client’s self worth as much as the attorney’s.

There are some good things about hourly fees. It is quoted in bite sized numbers. A three figure number is easier to hear than a four or five figure amount. It can be counted, whether in 3, 6 or 15 minute segments. The sticker shock of how much this problem will cost seems less, if only for a while. And if everything goes well in the case, the number will be smaller than if everything goes wrong in a case.

You may be able to get the lawyer to estimate the number of hours that her experience tells her that this kind of case has taken before. But when you do that, you in essence are asking about the cost of a value priced case.

On several occasions estimating a range of fees (rate x time anticipated for quick results or for slow) resulted in an angry client – when the fee was not the bottom figure quoted in the range. My description of the variables (if we don’t have to file a suit, if the prosecutor takes our offer,. . .) never stuck as firmly as the bottom number of a range of numbers. The client then blamed me for a higher fee, even when I had told him of the variables and put them in the engagement letter, I still seldom collected more than the lower fee. The anger over the fee turned the client from being on the same side as I was, to putting me on another side from my client over the fees. That is not where I want to be in relationship with my client.

If the lawyer is the professional, shouldn’t she show it by setting the fee at a price where the lawyer makes a good living, but the client can live too? More on this later.

What are the lawyer’s incentives for Value Priced fees?

Potential clients (and lawyers) need to know that lawyers change their incentives in flat fee cases. It happens because of the different type of relationship with the new client. The fee is fixed, the lawyer and client can focus on handling the case and do not have to worry about the fee relationship, beyond making payments if that is the agreement. The often awkward discussions about “did you need to spend time doing that” and “how much is this case going to cost me” are not going to occur.

The only way to get to a successful “flat fee” is to engage in serious discussions about the case, the issues of great concern to the client, and the lawyer’s ability to meet those needs. The lawyer will get to know more about the potential client early enough to allow it to make a rational decision to become partners in the case.

The design is that the lawyer should know that the client does not expect an inexpensive resolution to a complex problem, and the client with the complex case gives up hoping that the lawyer can easily produce an inexpensive miracle. Lawyers will have more walk away clients than before, due to the sticker-shock of realistic legal fees. But the walk away is better for the lawyer than a client who decides the lawyer has lied about the complexity or expense of the legal matter.

As a matter of fact, the lawyer and client can enjoy the miracle if it occurs. Say a client brings in a case of some complexity. The lawyer’s experience and knowledge, plus her understanding of the facts, the parties and the capacity of the client to deal with the matter allows the creation of a fair fee, offered before the engagement and accepted by the client. At that time neither the client or the lawyer know if the case will take weeks or years to get to a resolution.

Due to the lawyer’s exceptional handling of the case, a matter that might have taken years or at least months is resolved in a matter of weeks. The lawyer’s reputation of integrity, and ability to show the opposing party a means of successful settlement helps the client make a prompt resolution of the case. The client thinks this is a miracle, and the lawyer makes more than might be expected if the matter was billed on an hourly basis.

The client still gets the benefit of the bargain, in avoiding a protracted period involved with the case. The lawyer benefits with a fee that is earned by the above average skills put into the case.

Would the client have benefited by an hourly fee? Probably not. Without a reward for the prompt resolution, the case may not have had a priority among the many cases in the lawyer’s file cabinet. The value of a dollar settlement today is worth more than the value of that same amount of settlement several months from now. And in today’s economy, a check deposited and paid, even from an insurance company today is better than a promise to pay tomorrow. Insurance companies have died while people were waiting for their settlement checks.

This also can work the other way. A lawyer with an unrealistic expectation of her ability to close out a case may end up with a long case with lots of hearings and research and time spent. If the scope does not change, the flat fee protects the client from an unexpectedly (because that is the case the lawyer described) complex case.

An alignment of the interests of the lawyer and client is possible, and an Alternative Fee or Flat Fee arrangement is a better way to handle that. A good fee that works for the mutual benefit of the client and the lawyer is one mark of professionalism in a lawyer.

What are the client incentives for a Value Priced fee?

Potential clients need to know that lawyers have a variety of incentives to help clients with their legal problems. Among the incentives is the chance to make a living as a lawyer. Lawyers have college (four or more years) plus law school (three or more years) of education, study and postponement of their earning years invested in preparation to be available to help our clients, whatever the legal matter is.

The types of incentives can be the feelings of satisfaction in helping a person resolve a legal issue, or the improvement of a professional’s reputation in a case which gets the kind of notice that affects the reputation and esteem of the lawyer. Some lawyers are reported to enjoy getting paid for their efforts at helping clients. Lawyers who over a long period do not regularly get paid usually stop practicing law.

Clients also have incentives for engaging legal services. The client may have recently been sued, been involved in an accident, been charged with a crime, or may have decided to take control of a situation by obtaining business counseling or planning their estate. Whatever the triggering event, the lawyer will appreciate the call (if not, call someone else) as it allows the lawyer to show the skills and experiences she has worked for years to acquire to you as a potential client, and if hired to use those skills for your best interests.

To make all that come about the lawyer and client need to come to agreement on the compensation to be paid for the lawyer’s (or law firm’s) services. Lawyers operate under a rule on legal fees based on the American Bar Association’s Model Rules of Professional Conduct. All states, except California use the rules or some variation of them as their code of ethics. Rule 1.5 governs Legal Fees, and this is Indiana’s version. The primary factor in the rule is that a lawyer shall not charge a fee that “is unreasonable.” There are eight other factors listed, which cover 14 actual factors.

As long as the fee arrangement fits the Rule 1.5 guidelines (and several cases that interpret the Rule) the lawyer and client are permitted to enter into any fee agreement they can work out. The three syles of fee agreements are described in the link to an earlier post.

The structure of a fee agreement can shift the risks in the case from the client to the lawyer, so long as both parties understand what is happening. With a risk shift to the lawyer, there are possible rewards and penalties which follow to the lawyer. As the lawyer accepts risks, the risks to the client diminish. Most clients appreciate a reduction in the risks of legal work.

So, why are value priced fees appropriate for clients in so many types of cases, and why not in all cases? The risks for each side changes with an agreement for flat fees. for instance in a personal injury case, lawyers who skillfully choose their caseload will accept a percentage of the recovery as a fee. If there is no recovery (the legal outcome that fulfills the scope of services offered), the lawyer takes no fee. If the case settles promptly, the full fee will be taken by the lawyer, as agreed.

In these and other types of legal matters with a value priced flat fee the potential client gets the advantage of knowing the scope of services or outcome that will be provided, and the total fee to be paid. That means that when the scope of services is completed, the lawyer is done and gets paid or keeps the fee. It also means that if the scope of services changes in a manner not foreseen, or agreed to when setting the fees, the fees may change (properly with a Rule 1.8 explanation and opportunity). Finally, if the lawyer does not complete the scope of services, some or all the fee shall be refunded if prepaid.

The flat fee establishes that it is the lawyer’s incentive is to complete the services quickly for the benefit of the client, and also for the lawyer. The lawyer loses any improper reason to create or increase unnecessary conflict with the opponent or her lawyer, as it will not help to increase the profit for the lawyer, since time spent is not a variable in the fee equation. But the fee needs to be based on a proper value pricing analysis, since a lawyer who consistently quotes a fee that is inadequate for the scope of services finally provided will not stay in the profession too long.

The greatest reward for a client in working out a value priced flat fee is the transparency that occurs. If a legal representation is quoted at an hourly rate, the client will have little indication of what the final cost will be. In an hourly rate fee there are two components to the final fee, the rate times the time spent on the matter. There is no protection for the client from unnecessary expansion of the dispute in order to build hours to bill.

We can discuss the components of an hourly fee in an upcoming post. I look forward to your comments.

Risks to Clients from Value Priced Flat Fees

Value pricing services, also called flat fees are the rage among lawyers’ posts these days. Not so much that a majority of  lawyers are offering flat fees to clients, yet. The last post “Rewards of Value Priced Flat Fees”  did a good job of defining value pricing and flat fees. “Value pricing”  means to price the services at a fixed price for the project and for the client, all  before providing the services to the client. The quoted price addresses the value of the service to the buyer of the service, or client, and the value of the service to the seller of the service, the lawyer.

A flat fee is not a guarantee that the fees for handling all of that type of case are the same — its not like all Big Macs® that are priced at $3.09 on the menu board. The value of a flat fee is shown in two ways: 1) the fee is quoted to the client before the engagement agreement is completed, for an agreed scope of legal work to be performed for the client, whether the matter is a personal legal matter or a business matter; and 2) that the attorney does the work for that fee, so long as the scope of legal work is not changed by the client or the case (change orders are used if that happens).  And if the lawyer does not complete the work, part or all of the fee must be refunded to the client.

The client’s risks are several. First, the risk of sticker shock to the client exists.  A fence fight with a neighbor seems like something that should be easily solved, but experienced law firms can tell potential clients that neighbors will often spend thousands of dollars protecting inches of grass when the neighbor’s yard is involved.  The shock of knowing that it may cost thousands to see if a court will require a neighbor to move a fence a foot or twenty may seem ridiculous.  But as a lawyer I do not want to handle a fence case, or any other types of cases that will cause me or my firm to lose money on the matter. Clients sometime react poorly to the best combination of lawyer skills and fees charged.

I also don’t want to have a client expect to resolve a fence case for a few hundred dollars from a “small retainer” offer, and then have the fee turn into tens of thousands of dollars. The lawyer assumes the risk that the client does not appreciate the time, effort or costs, and so does not hire the lawyer, choosing instead a less experienced, or skilled lawyer who cannot properly discern the needed efforts, legal research and skills needed to do a quality job. But, unless the client is fully informed of the possible  scope of the dispute, and the risks turned into a flat fee, the client may have a large fee balance due to the lawyer at the end of a case.

A second risk is that the client (or the lawyer) may have an unrealistic view of the scope of issues that may come about. As a result, the discussion that is needed to determine a fair fee may be different than expected.  Without the lawyer and the client devoting adequate time to discuss the client’s legal  matter, and each asking many questions about the legal and factual issues in that matter, the proper scope may be missed. That may result in a misquoted fee, too low or too high for the case.

A third risk is that the lawyer may have to do a preliminary research of the law (as well as a conflicts check and a study to determine the lawyer’s competence in the area of law) in order to decide whether to take the case. Taking time to decide the legal nature of the issues is in the long term better for all parties than for the lawyer and client to get deep in the case only to learn that a prior appellate case has ruled that the client’s facts do not support a verdict in your favor. The risk to the client is that some lawyers charge a consultation fee, and the fee may end up with a determination that the lawyer is not right for the case.

One risk that bothers some clients is that after settling on a fee, it may be that some of the actual issues settle quickly in the client’s favor, resulting in a fee for the lawyer in the case that took less time than the client or the lawyer expected.  Most clients accept that a prompt resolution is in the client’s benefit. Few people really want to live through  a legal battle that takes months or years, but when a lawyer succeeds in convincing the opposing party and its attorney that the client’s position is legally correct, there may be some regret that the battle was not “harder fought.”  This will occasionally cause problems.

The best resolution is to confirm that the client pays the fee for bringing the case to its outcome, not for the lawyer’s perceived effort.  Most clients want to hire a better attorney than the opponent has, and when she turns out to be the better attorney, the client should rejoice.

But, if the scope changes, the lawyer owes the client a change in the fees charged.  Using the dissolution example in the prior post, if the client is worried that a major custody fight is expected, and the fees address a dispute over that issue, and then the spouse offers to give up on the custody issue without any custody fight, the fees should be adjusted down, just as if the opposite situation had occurred. No custody fight expected, but a major battle ensues, the fees should be adjusted up.

The best way to avoid problems is to come to an agreement about what the risks are that are shared by the lawyer or law firm, and which are reduced from the traditional assignment of all risks to the client.  When that happens, a better outcome should happen for clients and for lawyers.  Cases may  be handled with more alignment in the interest of the client and the lawyer. More on that in the next post.