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In a December issue of the Wall Street Journal, the headline implies that lawyers are making far too much money in a Delaware case. This, despite the unheralded reduction in their fee request. But, it’s easy too trash lawyers, and good headline writers (a special art in writing) are brilliant in getting readers to pick up the paper and keep reading …
But, let’s look at the facts:
First, the judge in the case said that the plaintiffs lawyers did an outstanding job, not just good, and such work should be rewarded. This is the same judge who historically penalizes lawyers when they fail to get results.
Second, the agreement between plaintiffs’ lawyers and plaintiffs permitted counsel to ask the court for 30% and they applied for less, only 15%, not a normally outrageous percentage.
Third, the risk reward element of contingency cases should be evaluated as of the beginning of a matter. And in this case, the risk of no recovery was substantial. Victory was, by no means, assured. Monday morning quarter-backing is always performed by those who have a corporate bias, have no interest in the matter and just want to carp, are jealous or, worse, feel that lawyers should be heard, not seen. Reminds me of the criticism against lawyers who sued Ronald Reagan, as governor of California. Despite the fact that the lawyers won most, if not all, the lawsuits brought against the abuse by the State, neither the facts nor the victories was much discussed by those with a political agenda.
Last, these arguments that the lawyers’ hourly billing rates were too high fly in the face of value billing, the new wave for corporate America. In other words, the results in this case were based on the value to the clients resulting from the effort and skill of the lawyers. In most cases, hourly billing results in higher legal fees … fees unrelated to the value received by the client … and fees that created certainty in the cost of the legal proceeding, an important factor to clients in most matters. It’s important to know what the legal cost will be before embarking on a matter. Value billing provides this.
Thus, the criticism offered by the writer in the WSJ is off target, to say the least. Most criticisms against legal billings involve the hourly billings … here, value billing was requested by the lawyers and their clients and approved by the court. Hoorays should have been the proffered by the writer, not whining.Tags: billing, Finances, Management, Marketing, News