Tuesday, May 14, 2013

Legal Urban Legend Myth Buster #5

MYTH #5

THE CLIENT IS BETTER SERVED WHEN THERE IS AN OVERSUPPLY OF LAWYERS BECAUSE OF SIMPLE SUPPLY AND DEMAND PRINCIPALS.

The reality is that the nature of lawyering and its so-called "zealous advocacy" means that clients probably get a worse outcome when there are a bunch of starving lawyers in their community, particularly young starving lawyers. 

Back in "the old days," there was a sense of community and professionalism among attorneys. They knew each other on some level personally and professionally. They treated each other with respect knowing that they would encounter each other throughout their careers. A good professional reputation actually meant something. They tried to work out resolutions with opposing counsel that left both their client in a good position as well as their own reputation in tact.

Now practicing law is nothing more than a hyper-partisan, full-contact, blood sport. More experienced attorneys routinely take advantage of personality intangibles to gain an advantage over the younger inexperienced attorneys. It is common to witness attorneys bullying and being unreasonable simply for the sake of being unreasonable and trying to gain an intangible advantage quite unrelated to the merits of the case itself. Today when you sit through a deposition the testimony is incidental to the proceeding. It is all about attorneys sniping, obstructing and objecting at each other.


Young attorneys who have no career option but to hang a shingle do not receive the practical mentoring they need to know how to process a matter for a client. Many times they are just plain wrong in their handling of a matter. They double down even when the opposing counsel tries to politely explain to them why they are wrong. It is not uncommon for young attorneys to not even know the proper theories or statutes to proceed under. They have no one to mentor them and no one to ask how to handle a particular legal matter. All of this results in unnecessary and costly legal work which doesn't solve the clients problem.

It is not uncommon now to see attorneys "run up the bill" on good paying clients instead of trying to get a good result for them factoring in the cost of litigation.That is what happens when there isn't lots of work to go around. It is also common to see distorted litigation being conducted because most or all of the litigants will have the file on contingent fee and everyone is trying to distort the outcome so that they can make more money. Simple files with a small pot of money in dispute will be huge drawn out legal proceedings because all the attorneys are trying to get a percentage of the entire pot instead of the part their client is actually entitled to receive.

Imagine a pit holding a bunch of vicious hungry lions. Then add a bunch of starving young lion cubs to the mix. Then throw a few scraps of meat in. Watch what happens. It's not good.

The myth that "the client is better served by an oversupply of lawyers" is BUSTED.

This ends our "Legal Urban Legend Myth Buster" Series for now. The bottom line is that law schools report as employed all the graduates who could not find a paying job and were forced to hang a shingle. These young lawyers are for the most part struggling for survival and many will undoubtedly fold their fledgling practices in a year or two, but the law schools won't report that to you. 
Feel free to add your own myth busters in the comment sections below.

23 comments:

  1. I have older lawyers trying to bully me all of the time, and I have clients that will bail on me to go with a less expensive alternative...even though I am a 30 year old solo! There are people charging less than me? Fine, I bag a whale here and there, but it is barely a living.

    Law school should teach more state law and less MBE. And they should make the second two years practice intensive, which would dramatically reduce costs because they would not have to pay lawprofs after year one!

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  2. I have been practicing law since the early 90's. the things you mention have been going on since I started. Its nothing new its not right.

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  3. Dead-on.

    1. Young attorneys have no idea how to properly price services and go overboard in an effort to win business and not alienate potential clients.

    2. The public thinks attorneys are fungible.

    3. The public grossly undervalues the actual cost of decent legal work.

    4. State bar rules hamper efforts to correct the perceptions in 2 and 3 or to actually build low-cost practices.

    5. The low-rent attorneys who price cut below costs to get the business soon go under, flee to higher ground, or leave the law altogether, meaning whatever goodwill there is in doing good work/getting referrals/retaining clients is drastically reduced or gone.

    The big problem is that attorneys are not like restaurants. If a restaurant undercuts on prices below costs and delivers poor quality, it goes out of business rather quickly and the public never has to see it again. If a lawyer undercuts on prices below costs and delivers poor quality, the downside may not be seen for months, if at all, and the results may linger for a long time.

    Say you have a choice between two criminal defense attorneys: one quotes 4k for a sexual assault trial, the other quotes 8k. Most poor and middle class people are going to go with the 4k guy and assume the services are fungible. But what if the price difference was that the 8k guy knows he has to retain his own medical expert and take extra steps with the police testimony that the other guy won't do? 4k guy is trial competent - he objects and knows the FRE's rape shield laws quite well - but he misses a crucial argument that would've thrown off reasonable doubt.

    Guess what? Dude who hired 4k lawyer is goin' to jail. 4k lawyer lost money, so he's more likely to go out of business, and he's not going to get any referrals out of a loser. 8k lawyer also lost business, lost the chance to get referrals with a win, and is more likely to go out of business.

    So in this scenario, literally everyone loses because of price competition based on the false assumption of fungability and the inability of younger lawyers - even competent ones - to analyze costs and price matters appropriately. And in this case, it's unlikely the error will be corrected.

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  4. I have been practicing since the late 80's. all you say is true.

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  5. ...And this is what the noblest profession became.

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  6. Supply and demand "principles"

    Sorry just saying. Oh and I agree with thIs entirely. I tried to hang a shingle with fairly disastrous results. Really should not be done unless you have run businesses in the past. And it's really the business side of thIngs at kill you more than anything. MarketIng, accountIng, these are not thIngs you learn in law school. But they don't teach you how to be a lawyer either, so...yeah. The thing that embarrasses me most now is being proud of getting A's in law school. How stupid I was to give a shit.

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  7. Law schools should have a class where you practice asking clients for $5k retainers. That would be a useful skill.

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  8. The free market relies on the ability of customers to accurately appraise the wares of vendors before deciding on what to buy. Vendors with good price/performance are rewarded with repeat business. Other vendors do not get sufficient business and their firms are forced to close.

    Legal clients however, not usually being lawyers, are not often in a position to appraise a lawyer's worth.
    Also, the performance of lawyers is hard to measure, even for another lawyer. Cases may be easy, or impossible; The opposing counsel might be incompetent or really good, preparation might have been key to winning a case that never went to trial, or would have lost a case that never went to trial.
    Also the consequences that might befall a client, particularly a criminal one are not such that lend themselves to rational appraisal by human beings. A person will do illogical things to attempt to prevent themselves going to prison or being put to death.
    Finally, a lawyer who intimidates witnesses or bribes the judge might be appraised as a good lawyer because they win, but we in society want that lawyer to be appraised as a bad lawyer.

    Therefore the decision for what lawyers are good and bad has to be made by some other mechanism than the market.

    This decision is the usually called bar exam.

    The problems that exist here are that The legal market is apparently still flooded with people who know not what they are doing, and people with no hope of passing the bar exam are still allowed to attend (and borrow money to pay for) law school.

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  9. Jack Marshall is GODMay 15, 2013 at 7:19 AM

    You all complain so much. why dont you just work harder, network, and seize the day with a positive outlook?!

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    1. YOU can do anything with a LAW DEGREE!

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  10. Another myth is that a degree from a top law school or top grades from a lower tier law school will actually get you any type of skilled employment down the road.

    The truth is that there is such an extreme oversupply of lawyers, that a law degree even for the best students and for lawyers who started in good legal jobs may not offer any type of employment down the road for which you even need a college degree. The oversupply of lawyers and the fact that so many of the associate jobs in law firms do not last for more than a few years means that your law degree from a top school or your top of the class record from a lower tier school may be useless. That means complete unemployment from any legal job and any job requiring a college degree. Your legal experience is likely to make you completely unmarketable outside of law. You are relegated to serving food at Starbucks, working in retail, or you can become a residential real estate broker and starve. It is a total fallacy that a top law degree or the best record at law school will result in employment of any type long-term.

    The legal profession is busted. The supply of experienced lawyers so far exceeds the number of full-time permanent legal jobs for experienced lawyers that it is laughable that law schools can advertise first year employment results without caveating them - this result does not apply for experienced lawyers. Employment results for experienced lawyers are shockingly poor.

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    1. At least once you learn to practice law, you can still hang up a shingle.

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    2. But is it economically feasible for everyone to have shingles?

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    3. Right, and go broke in the process. Just paying for the cost of malpractice, advance sheets, virtual office, website, joining organizations and going to their meetings to network, trying to keep up with CLE in a way that nets you knowledge in the area where you practice - it all gets very expensive. Unless you really make an investment, and you should also get a real office if you are serious, you are likely to fail. It also takes time. You are talking about 2-3 years unless you can walk out of a legal job with clients in hand. So $80,000 later, you will know if you can even break even, let alone make the salary that a new college grad would get in your area.

      The simple truth is that in an oversaturated profession, there is not enough legal work to go around. Most lawyers who try solo practice are not going to make a living because there is such an oversupply of lawyers and such a weak demand for their services relative to their numbers.

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    4. Right, because you can't "hang a shingle" doing thousands of other things.

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  11. LEGAL MYTH BUSTERS NO. 6

    Myth No. 6:
    "Today's new lawyers are generally lasier, far less diligent, and suffer from greater delusions of entitlement than did their Heroic predecessors. They attended public schools where everyone got 1st prize in every event, so they each expect to be made BigLaw partner within 2 years of graduation, never having Paid Their Dues. Instead of networking and interning for slash-rate pay to demonstrate a Willingness to Work, they sit at home on their couches writing whiny Scamblogs, thus refusing to venture into a workplace where their earnestness would soon net them a steady traditional job, if they'd only try. If they'd stop whining about the market and simply understand it's their moral failings that keep them down ... "

    Where do I begin...

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  12. The truth is that there is such an oversupply of lawyers that it does not help to offer to work for minimum wage or to work for free in any job that would lead to a decent paying job. At some point in your career, sooner or later if you are lucky, you will be out of a job and are not going to be able to get another job, except volunteer work that teaches you to work for people who cannot pay. Your law degree is highly likely to land you with zero. Your legal experience in good jobs is useless. That is true no matter how good your record and how highly rated your law school and how prestigious your first job. We are in a situation of unprecedented oversupply of lawyers, especially for those out of law school several years. The law degree, even for the tippy top students, is very likely to end in total washout - no job and no prospects except for unskilled labor.

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    1. And again, I disagree. There are always people who need divorces and have no choice but to pay a lawyer for his expertise, people who have contractual disputes with their own insurance companies, people who are injured, businesses embroiled in disputes with other businesses. There may not be enough work out there for all of the lawyers, but there is still plenty of work for any lawyer who puts in his time and becomes competent in his area of the law. You may not get filthy rich (actually you might if you do personal injury work and get the right cases), but you likely will at least make a living.

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    2. Not true. There are 1.4 million law school grads of working age (by now probably 1.45 million) and between 705,000 and 732,000 lawyers working. A third of those are solos and a quarter of those earn under $54,000 a year. There are also 1.25 million licensed lawyers for those 705,000 or so jobs.

      You can work till the cows come home. Half the law grads are excess - no room for them in the profession - and a substantial number of those who are working as lawyers will struggle to make a living of less than $54,000.

      If the table has only so many chairs, people left without a chair will need to stand. Hard work and being competent alone will not enable you to beat the odds. There is large scale massive unemployment and underemployment built into these numbers. Only special snowflakes think that competence and hard work will enable them to beat the odds.

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  13. At long last, people are discovering the unsettling reality that the huge, ever-growing, and almost-impossible-to-comprehend oversupply of attorneys means that long-term career prospects in the legal profession are utterly dismal... even for those rare few souls who successfully (1) jump through the 'Get into the right Law School' hurdle, (2) get top 15% grades and make law review, (3) land a summer clerkship that leads to a law firm associateship, and (4) withstand several rounds of the 'Survivior' game of associateship. Firms and businesses haven't kept pace growth-wise with law degrees.

    As said above, the law degree, even for top students from top law schools, is very likely to end in total washout. The profession has been ruined by overcrowding. Having a frappe over at The Cafe sure won't help, unless you're the one hired to serve it up.

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  14. Any lawyer willing to work for minimum wage or as a free intern is labeling himself as a person who puts no value in his own merit, so why should an employer? Its one thing for a law student to work as an unpaid intern, quite a different story for a full fledged attorney to do so. It amazes me that even the government, i.e., the Justice Department, possibly in violation of the FLSA (haven't checked the exceptions) hires lawyers for a one year commitment FOR FREE. Are there any other graduates out there who will willingly take on a job for free for a year just in the hope of getting experience? which would probably be lousy experience at that? How do these organizations get away with it, and why would ANYBODY do it? makes no sense to me.

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    1. That is not true. A solo or small office may actually get you started in a good area if you are willing to work for little or nothing. That person is struggling themselves. It surely is possible to use a small firm as a good starting point. If you are doing it for a year, something is wrong. You are being taken advantage of unless you are working for someone who is having a slow time building his/ her business. Sometimes it pays off to start out for little or nothing.

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    2. Just to clarify, even offering to work for free may not get you the opportunity to learn something useful because there is an oversupply of lawyers willing to work for free versus available work that teaches a skill that will enable you to earn a living as a lawyer. Sometimes you may luck out though and get good experience that serves you well by offering to work for free.

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