Why Trial/Plaintiffs' Attorneys Aren't Just for "The Little Guy"
Posted by
Amanda WickFebruary 12, 2009 11:37 AMA common misconception I've come across is the idea that Trial Lawyers, or "Plaintiffs' Attorneys," as we're frequently called, only represent individual people that suffer personal injuries. While I'll admit that many trial lawyers I know do represent a large number of individuals, we also represent businesses that have been injured, especially SMALL businesses. This is a strange concept to a lot of business people I meet who think trial lawyers are their worst enemy.
Until they need an attorney because their business has been injured and they go to an hourly defense firm for help. Then they're in for what most people call, "sticker shock."
What usually happens? When a business has been financially injured, the board of directors, or some kind of managing partner, goes out looking for a law firm. And they ask their fellow business people who they've used. This often leads to other businesses referring hourly defense firms that they've used in the past. Well, for small businesses, especially family- or closely-owned businesses, they receive the shock of a lifetime when a defense firm begins discussing huge retainers that disappear quickly, minimum monthly billing amounts, "per-page" copy fees that are often staggering, and hourly rates that are mind-blowing. They also receive warnings that "this could be long and drawn out and could take several years." Suddenly, they're faced with the fact that pursuing their legal claim could cost them their business!
Now, I'm not saying things will move faster with a Plaintiff's lawyer or that Trial lawyers won't charge you copy fees, but if your case has a chance of financial recovery a Plaintiff/Trial Lawyer may be a better bet. These firms, unlike Defense firms, operate in a completely different fashion that can often benefit a small business client. These differences include:
- Negotiability in Fee Structuring: Plaintiff/Trial lawyers live on a certain amount of risk. So while they may charge you an upfront retainer to guarantee pay for the work they'll do at the beginning, they may credit this retainer towards a percentage of your recovery if they feel you will win money in the end. This is sometimes called a "hybrid" fee: the upfront retainer is credited against a contingent fee recovered out of what the client wins and if there's no recovery, all the client is out is the upfront retainer. The underlying point: client's can cap their legal fees by knowing what they'll pay in a non-refundable retainer. I've seen companies spend upwards of $50,000 on hourly legal fees, with no resolution in sight and the monthly bills just keep coming, and coming... (Please note that attorney fee rules vary by state as to what attorneys are allowed to charge and the forms in which they charge fees).
- Work Incentives: The incentive structure is different when your attorney is hourly versus contingent. Some (and I emphasize some) hourly attorneys work under an incentive to draw out the case work as long as possible since the longer he works, the more he can bill. With a lawyer on a contingency fee, her incentive is to complete your case as quickly as possible since she will not recover any more if it takes longer; longer cases means other work she can't take on.
- Working vs. Winning: When a Trial/Plaintiff attorney takes on your case, in some kind of contingent capacity, that means they think your case has a shot. They wouldn't be taking the monetary risk of pursuing it, if they didn't think it had merit because if you lose, they lose. With an hourly defense firm, some (and I emphasize some) attorneys may take your case regardless of whether they think you can really win or not, especially when a potential client is dead-set on suing somebody. After all, if you're paying their monthly bill, they're not losing anything if you end up losing.
- What he pays, you may not have to pay: It's generally hard for hourly attorneys to adjust their rates for smaller clients who may not be able to afford what a larger company can pay. The reason for this makes intuitive sense: it's hard to justify charging someone $400 an hour if you just charged another client $200 an hour for the same work. And if you do class action work, where you certify your hourly rate to a judge, it's almost impossible to vary your hourly rate. Contingency rates, however, are almost always negotiable. Just because someone you know paid 40% in a contingency fee, if your case has a greater chance of a larger recovery, you could negotiate your fee down to 33 1/3% or even 20%. People forget that attorneys are a service industry just like any other service industry -YOU are the client with a case and we are competing for YOUR business. There's nothing wrong with a little haggling, as my mother would say. And if your attorney is somehow insulted by this, go talk with another attorney.
Bear in mind, these are generalizations based on having worked for both Defense and Plaintiffs firms. And if you are pursuing a claim that likely won’t have financial recovery, you will almost certainly have to pay an attorney hourly since an attorney won't be able to financially take the risk of a contingent fee. But if you are a business that has been financially damaged, and you are looking to sue someone to recover money, a Plaintiff/Trial Attorney may suddenly become your best bet.