It’s too often said that the only people who benefit from litigation are the lawyers. We think this sentiment is overblown, although we acknowledge that there’s some degree of truth to it. In many contexts, counsel are engaged on a short-term, case-specific or project-specific basis, and they take home their fees regardless of the ultimate outcome they achieve for their clients (good or bad). We believe that such a model can foster inefficiencies, and there must be a better way to align lawyers’ incentives with those of their clients.
Case in point: A mid-sized company with whom we are familiar recently had summary judgment granted against it in a case where it had brought suit against a competitor. In conjunction with its opinion and order, the court awarded the defendant about $15,000 in costs (exclusive of legal fees) to be paid by the company. Outside counsel set forth a plan to object to the bill of costs, and then e-mailed, “My hope is to get enough of a deduction to pay for the costs associated with writing the objection.” (That is, outside counsel expected to charge the client more to write the brief than it expected to save the client even if the brief were successful).
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