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August 2005

Life, Death and Law

           It’s Sunday. I find myself thinking about life and death and law. One of my friends, a forty year old doctor, was diagnosed with cancer about a year ago. I cannot say that I know this friend exceedingly well. When I first met Kyle, he was one of those people who made an impression on me; he was one of those people you want to care about. He and his wife Barb had heart. You could tell that from the beginning. I would describe them as a couple as alternatively conservative. Or maybe it is conservatively alternative. She presents as an artist. She talks slowly and meaningfully. Kyle presented as reflective and somewhat troubled. He was concerned about where he was in life and what he had achieved as a doctor. He seemed to be genuinely searching for that question we all ask ourselves ultimately. What do I want out of life?
        He had friends in big cities that were making three or four times what he was making. He acknowledged that he did well financially but he wondered whether or not he was in the right place at the right time. These were not casual questions to Kyle. He felt them at a deep level.
         One night when I happened to be fortunate enough to be watching an at home movie with Kyle, he mentioned to the group that he had not been feeling well. The movie was the second I the kill bill series. The same group of guys had actually watched the first movie together in Kyle’s basement. The next day he went to the doctor and was diagnosed with a lethal form of cancer. He got immediate treatment at Mayo clinic and all the best medical care. After months of treatment, his first check-up reveled that cancer had ravaged his body. And that there was no need for further treatment beyond management of symptoms. What happened next will be told only through my eyes, which are those of more of a casual observer, somehow included within the honor of being part of his small group of friends. I was there today in all likelihood watching him die with his family and a few others. I wondered how I got there. I watched his face and the distance which was his glance. I thought of how fortunate I was to be there and to be a part of that group and to bear witness to his decline and his coming death. Kyle will speak now through those whose live he has touched. I now count mine among them. These next weeks, I intend to reflect on Kyle’s life and to open myself up to him and his death. Kyle is touching me at a point in my life where I feel like anything is possible and any direction is open. At no time has being an independent practitioner been more important than right now. This moment where I will find out who I am.

More Great Resources on Problem Clients

        I did a Google search on “problem clients law” and came up with some really interesting sites. The Day on Torts law blog published by John A. Day has a post on problem clients and makes the following observation:

            “I say that to say this: client selection is a key to profitability and sanity in a trial practice. In a personal injury case, poor client selection can result in the loss of an otherwise good case. In a commercial case, a bad client can cause untold grief.”

            Of course, Mr. Day refers to a post by Mathew Holman who in large part started this train of thought. Mathew related the following problem client types, which I think are right on:

            THE DISILLUSIONED consistently expresses disappointment with your work even though it is of good quality and conforms to spec.

THE SUSPICIOUS consistently expresses a lack of trust, disdain for your work, or questions your integrity.

THE CHISELER consistently complains about your bill, even though it conforms to the estimate they agreed to.

THE BULLY consistently is verbally abusive or threatening to you.

THE SOMETHING-FOR-NOTHING consistently increases the scope of the project but refuses to pay for the additional work.

            Matt refers back to a posting by Christopher Hawkins who refers to eleven clients you need to fire right now.

Anothers view on Problem Clients

South Carolina Lawyers Weekly posted an article in January 2003, by Mark Bassingthwaighte. Mark has a nice section in his article concerning developing business plans for law firms about problem clients. Here is what he has to say:

            “Also, consider the "problem client." These clients tend to occupy more of your professional time (and sometimes even personal time) than other clients. Problem clients also tend to occupy excessive staff time and often create fee collection problems. I have heard some attorneys observe that problem clients create 80 percent of their stress and take 80 percent of their time, but generate less than 20 percent of their income. Viewed in this light, problem clients are not worth the effort that they require. If you can significantly reduce your stress and time load simply by no longer working for problem clients, your loss of income, reduction in stress and newfound time is well worth your efforts. The highlight of this strategy is that your newfound time can be used for personal time, or for seeking better clients who can pay and are not a problem.”

I have to say that while there is no empirical evidence to support the claim, I have to agree that problem clients create 80% of the stress, take 80% of the time and generate less than 20% of the income. As I noted previously, successful law firms are built on solid decisions concerning which clients they choose to represent. Success can often be measured not in the clients that a law firms takes, but in those it does not accept.

Yeoman's Clients to Aviod

  The Yeoman Blog posted a comment about my series on problem clients. As further proof that this is an important issue which lawyers should spend time thinking about. I have further appreciation for the Yeoman lawyer because he, like I, is anonymous. Here is the link to his most recent entry about clients to avoid. Here are some links to prior entries concerning this issue.

The Needy Client

Client on the Hunt

Backseat Driver Client

Problem Client Type “F”

      The next type of problem client is one who simply refuses to do the homework assigned. I have always viewed my cases as an exercise in teamwork. I am very active in including the client in important discussions and always provide the clients with more information than they probably need. Regardless, I also expect my clients to participate in the handling of their case. The client who recoils when asked to perform homework is not likely to answer those discovery requests when they come in. That client is not likely to get you the documents you need to prove a particular point. This problem client doesn’t want to invest anything in their case or their matter but still expects results. A client that doesn’t have enough interest in their case to put the work into it that is required is probably headed for a bad result.  The lawyer that works for that client is probably headed for diminished credibility since he/she will not have the information necessary to make their points. Worse, the lawyer will probably provide misinformation in the handling of the case which the other side will promptly shove down the lawyer’s throat. Lawyers should never forget that their credibility is also on the line when they represent clients. If you work with a client who refuses to put in the effort to win, the lawyer’s credibility suffers as well.

Problem Client Type “E”

        The next problem client type is the one that  simply never takes the advice of their attorney. After a well thought out and reasoned analysis, an attorney gives their client their best recommendations. If the lawyer sees a patter where the client simply wants to do things their own way and ignores the attorney’s advice, this client type should probably be fired. Assuming the lawyer is giving good advice, the client who continually ignores that advice is certainly headed for a bad result. Is there any question in your mind that this client will ultimately ignore the fact that they made bad decisions along the way and blame their attorney?

Comments on “Trust Me” Capitalism

I received several comments to my post on “Trust Me Capitalism.” The first comment agreed that the hourly billing model has problems but asked for me to post some alternatives. I responded with two different approaches, first is to provide adequate documentation to exactly what the lawyer contemplates doing in order to achieve the clients goals on the front end. Second, is to reserve part of a flat fee until the case is resolved, with the final portion of the fee to be negotiated between the lawyer and the client based on results. The main point is to provide incentives for the lawyer to actually achieve the goals of the client as quickly and cost efficiently as possible. This is the critical missing element with hourly billing.

I received a second comment which essentially said that any fee structure requires a “Trust Me” component. In this regard the commoner comment states:

“True, in a billable hour system you are asking the client to trust that you won't overbill or overwork a file. But how is that different from a client trusting that you won't place an overvalue on your service if offered on an alternative billing arrangement. Couldn't you pad the premium like many associates pad their hours? After all, how is a non-lawyer client really going to know?”

I have to say that I don’t agree with the comment that all billing systems require an element of pure trust by the client in the lawyer. All billable systems certainly don’t have the same elements and incentives. The main point which readers should take away from this discussion is that there is nothing that will protect a client from a crook attorney who is simply out to defraud a client. However, if you are a true capitalist and believe in incentives, a fee structure can be devised which provides all the proper incentives between the lawyer and the client. For instance, a pure hourly billing system has no incentives to resolve a case. A flat fee system with a kicker on the back end for achieving results has a great incentive to resolve the case quickly and to achieve results for the client. Further, there is a huge difference between a standard hourly retainer agreement and a retainer agreement which is based on exacting detail concerning the clients goals and how those goals will be achieved by the lawyer on the ground. Documenting goals and deliverables can hardly be equated with the open ended hourly fee billing retainer which simply states that a lawyer will charge a client for every fraction of an hour that they spend thinking about the clients case.

         I also want to put a plug in for setting budgets at the beginning of a case. Most lawyers don’t really discuss budgets with their clients. I always discuss budgets with my clients and try to work within those budgets. The fallacy that you have to leave no stone unturned in order to provide aggressive representation is simply an excuse to bill more. Well informed clients can make intelligent choices about which issues they are going to pursue and which issues they are going to leave on the sidelines. Client can make intelligent decisions about which depositions they are going to take, and which witnesses they will simply attempt to get written statement from. Lawyers need to put their money where their mouth is and provide clients much more detail concerning both costs and results.