In our office we handle many complex legal disputes, very often on a risk-sharing basis. This means that we are ready to lower the hourly rates we charge in return for a contingent fee if we achieve a good result for the customer, as was agreed in some way in our order letter. Customers like this because they see us as with them: if they win, we will. If they don’t get what they were looking for, we get paid less.
Many corporate clients have commented to me over the years that when dealing with lawyers who do not bill this way – as is typical with lawyers who bill by the hour – those attorneys feel that these lawyers have little concern about fees Customers have to pay or the result. In fact, a lot of corporate clients tell me they think these lawyers are just trying to charge as much as they can to increase their bill.
Geez, I’ve seen churn and more than once opposed a well-equipped company where they just seemed to pile corpses on top of suitcases and litigate every little thing, even when I couldn’t see any tactical or other benefit for their client. Overcharging (as opposed to inaccurate billing) certainly occurs. Whether it happens as often as my customers have complained is beyond the scope of this short article. But I admit it happens.
As lawyers, we need to consider all of the costs our clients incur in litigation, and legal fees are just one of those costs. Part of good advice is to determine: is it really worth fighting? I often advise potential claimants or applicants to consider alternatives to litigation or arbitration. I also advise defendants to consider paying, even if they think they haven’t done anything wrong, just to get out of a lawsuit. Cost – including not just money but time too – is important and as advisors we need to take this into account in relation to the advice we give to our clients.
What we cannot or should not do, however, is let our own fee rates dictate our advice or how we fight. I am not saying that we should be taken advantage of – we are not. However, this is different from our fee rates determining how hard we fight or not, or what tactical suggestions we make to the client. As mentioned above, our risk-sharing customers actually believe that we do and they like us for it. Risk sharing helps with customer relationships. We also need to be aware of our higher ethical and professional obligations to advise the client appropriately and, as they say, zealously stand up for the client regardless of the fee.
Lawyers will usually litigate a small case differently than a large case, and so often should we. However, this is because the cost and results may vary between these instances from customers. We cannot allow our fee rates to determine how we advise our customers or how we try to attract them.
John Balestriere is an entrepreneurial litigator who started his law firm after serving as a prosecutor and litigator in a small law firm. He is a partner at the Balestriere Fariello law firm in New York, where he and his colleagues represent national and international clients in litigation, arbitration, appeals and investigations. You can reach him by email at [email protected]