Introduction

Is the current economic melt down impacting your clients and practice? What are you doing about it?

The current economic conditions, reportedly the worst since post World War II, are bound to have a rippling impact on some parties in litigation, and therefore also on their attorneys. How can attorneys best serve their clients in the midst of this perilous economic environment?

The following is a compilation of interviews conducted with many attorneys with whom I have mediated.² The combined business acumen and lawyering wisdom is shared with you here. This may be the era of survival of the smartest and most agile attorneys. There are economically beneficial ways for attorneys to represent clients who may be on the financial edge and ways to represent a client's best interests efficiently and economically. "Zealous advocacy" has taken on new meaning. One of the best approaches to keep a lid on costs is by using a mediator for private case management.

Law Biz Considerations: Survival of the Smartest and Most Agile

In commenting on these difficult economic times, one attorney observed, "Nobody can afford to litigate now. They can't afford to pay their lawyers and can't afford to pay a judgment." This attorney almost never shows a client the door. If there is some way to get paid at the end, he comes up with a way to do it. More than before he checks out a prospective defendant's assets early on and very carefully. "Getting a judgment against an insolvent defendant is the worst."

Another attorney has reinvented himself and his practice by emphasizing bankruptcy. He tries to work with the client to, "cut them slack, be empathetic and help them through it."

An attorney who practices solely in construction by representing contractors and sub contractors stated, "Contractors are dropping like flies." Before construction and the economy became as bad as it is now, this attorney bartered work on his then small house for services. He now has a very large house. Some of his clients are belly up and he's lost fees. If his clients can't afford his services, this attorney let's them go. He can't take the risk of working for nothing. But he says he won't let a client flounder. He will refer the client to a young colleague, guide the colleague and receive some fee by the time the case concludes.

Economically Beneficial Ways for Attorneys to Represent Clients Who May Be on the Financial Edge

Some clients don't have the money to pursue their cases as aggressively as they might want. The theme among some attorneys is, "We, as attorneys, have to work with clients. These times are not going to last forever, however, the days of taking any case and conducting discovery to death are gone. Another theme, "Do not work for free. The client will not value your time."

To keep costs low, one attorney now refuses to let the opposing counsel bait him into an argument that becomes unnecessarily expensive for the client. "It takes two to argue," he says, but adds that he doesn't hesitate to file a discovery motion when he needs to. This attorney's broker client needed advice but could not afford to pay for it. The attorney spent a lot of time with they agreed that when the escrow closed his fees would be paid. Before the attorney could send a statement, the client sent a large check. This long standing relationship, in combination with trust and good will enabled attorney and client to find a way to continue working together.

In anticipation that the client will ask him to cut some slack, another attorney now quotes a higher than usual fee for bankruptcy. Depending on the client he can write down his bill. In civil cases he tries not to sue; if that can't be avoided, he reduces his hourly rate and accepts a smaller retainer than is customary.

Generously looks for alternatives is another attorney's strategy. "Billing by the hour may be stupid," she says and points out that there are alternatives such as fixed fee, contingency or part contingency. She's open minded to alternatives to hourly billing and is considering taking credit cards. Having just taken a case for a client who cannot afford her services, she likes the facts, and "the law is on our side and I like my client," she just decided she'd find a way to work out a payment plan with the client.

Charging less and asking for a portion of the fees up front, one attorney also proposes a fee arrangement to collect on recovery when necessary. Several attorneys advise clients who are in pro per. These clients do as much of the litigation work as possible and appear on court call. If the case goes to trial the attorneys will try the case, on the condition that they get paid the monies due them before starting trial. "This gives the client a taste of what I'm doing on their behalf when I deal with the other attorney and the client better appreciates my services."

With long standing clients, one attorney will take a smaller retainer and will work with the client by taking monthly payments when he had not in the past. He requires that new clients pay on time or he stops work. If the new client can't pay hourly he will take a partial or full contingency where he had not before. And when necessary he discounts his fees.

Representing a Client's Best Interests Efficiently and Economically: "Zealous Advocacy" Taking on a New Meaning Efficient and Economical Use of Discovery:

One attorney suggests, "Do only those things necessary to win the case. What will the trial brief look like? Most litigation devices, discovery and motions don't win the case and are very expensive." Attorneys also commented that they put off expensive discovery until after a mediation, if there is one. In this way the expensive discovery is then avoided.

Another attorney summarizes this well. "Discovery is mostly over done and driven by the need for attorney fees. It's not that effective. Cases don't turn on the obscure five percent learned in discovery." He'll find what he needs in depositions.

Practicing smarter by avoiding unnecessary battles that are costly to his client is another attorney's game plan. In a recent case, opposing counsel served a request for production of documents. Initially concluding that most requests were not relevant and opposing counsel was "just a pain in the ass," the attorney filed an objection which was overruled by the judge. He finally concluded, "Who cares who is going to see this crap?" This very effective and aggressive attorney acknowledges, "I should have done this from the get go. The better response would have been to object and turn over the documents. Sometimes it is easier to comply than to protest. It takes two to fight."

Stipulations to Limit Discovery in Order to Contain Costs

Attorney comments range from "It's a great way to keep a lid on costs" to "It's not possible." An attorney who specializes in construction defect litigation where Case Management Orders are customarily agreed to among counsel and ordered by the court, often has open discussions about a limitation on discovery. He cautions that an attorney must be very careful about discussing with opposing counsel a limitation on discovery in that it may be perceived as a sign of weakness. His reputation as an attorney who is ready to try a case is critical.

Another attorney comments that some opposing counsel have to know you mean business. She wants to send the message of credibility to the other side. She never discusses an agreement to keep the costs down since she fears loss of respect and positioning.

Yet another litigator comments that it's not necessary to have a "scorched earth" mentality in discovery. "It's all negotiation no matter what you're doing. Efforts to agree on a limitation on discovery is not a sign of weakness, it's a sign of common sense." He works hard to establish relationships and he believes it's the relationships he has with other attorneys that save his clients money. Finally, one litigator observes, "A limitation on discovery is not possible when opposing counsel is insane, ridiculous or worse."

Keeping a Lid on Costs by Using a Mediator for Private Case Management

How can reasonable attorneys keep a lid on discovery, motions and other costs of litigation when they are hesitant to suggest it to opposing counsel?

As one of the attorneys interviewed commented, "Mediators and judges can suggest things attorneys can't suggest to each other. A party will listen to the judge or mediator when they won't listen to their own attorney." As important, a conference call with a mediator, initially to discuss setting a mediation, can be used as the platform for a conversation initiated by the mediator to address the question "What do you need from each other to be completely ready for the mediation?" When the conversation is opened by the mediator the attorneys are taken off the hook and they suffer no loss of face.

Much more frequently conference calls with attorneys to set a mediation now are used to address case management issues. One such recent conference call with counsel involved a case that had been set for mediation. The mediation was continued because neither side was prepared as neither had cooperated with discovery. During the call and with coaxing, both counsel set out what they needed from the other in terms of written discovery and limited depositions, and then agreed to a very specific schedule. They both agreed to add penalties for non performance into the agreement. The conference call was extremely productive, and will help counsel complete minimal and inexpensive discovery before the mediation. I will touch base with counsel periodically to keep things on track.

A great benefit of a private case management conference with a mediator is the convenience of scheduling it when you want it, not when the court schedules it many months into the future. The conference call can take as much time as necessary to cover all issues, unlike a court CMC where the judge takes only enough time to set a trial date and possibly a mediation completion date.

Conclusion

These very difficult and challenging economic times for clients and attorneys are an opportunity to bring out the best. The best in attorneys might take the form of finding ways to continue to serve clients by creating new fee arrangements, by working more efficiently and avoiding unnecessary and costly discovery and motions, and by making use of a mediator to provide a safe platform for case management to keep a lid on costs.

Endnote:

Paul Fisher has resolved many hundreds of disputes as Mediator since 1986, and has heard hundreds of cases as Arbitrator since 1978. Paul has been a full time mediator since 1991. From 1971 until 1991, he was in a litigation practice. He is an adjunct professor of law at the Straus Institute for Dispute Resolution, Pepperdine School of Law. In 2001 Paul was named to the Distinguished Panel of Neutrals of New York's CPR International Institute for Conflict Prevention & Resolution. In 2002 he received the Los Angeles County Board of Supervisors Award for Case of the Year. In 2006 Paul was a discussion leader at the Harvard - International Academy of Mediators conference. Paul is a nationally published author, and frequent speaker. He has been selected as a 2007, 2008 and 2009 Southern California Super Lawyer in the area of dispute resolution.