Allocatur

US Courts to Encourage Competitive Bidding to Control Costs?

The National Law Journal reports on US judges using competitive bidding to select lead counsel in securities actions - one of the reasons to justify this position being that there is often little oversight of the conduct of the matter by an actual client.

The practice was introduced in the early 1990s, but the was frowned upon by some courts in 2000 and 2001. However, the judge who introduced the practice has urged Congress to codify such auctions to save investors money.

In 2003, the New York Law Journal reported on the use by GE Commercial Finance of online auctions for legal services and other GE groups followed this with further online auctions in 2005. Any such auction would need to carefully take into account the services and skills on offer from bidders to ensure a comparison of "apples with apples". Lawyers have complained that such auctions are labour and time intensive, and the recommended strategy is that adopted in any auction - set a limit (in this case a bottom line) and stick to it.

As with any negotiations on fees, a law firm must clearly identify:

• What is the cost base?
• What is the scope of the work?
• What are the client expectations?
• What is value to the client?
• How will the firm deliver the work?

This can be more difficult with on-line bidding as the opportunities to identify scope, expectations and value are more limited.

Are you defaming your client?

It's amazing how often file notes demonstrate the "them and us" attitude adopted by some lawyers to their clients. It's even more amazing that those lawyers forget that these notes will be discoverable if they ever are in a dispute with the client regarding costs or conduct. I have seen quite defamatory file notes including descriptions of clients ranging from "evil" to "an absolute nutter" and other descriptions that can't be published in a family friendly blog!

Emails are a particular problem. There is still a prevailing mentality that they are not "formal" documents. Internal emails are the worst - there is a overwhelming belief they are "private" and unless they are released by mistake - that unfortunate hitting of the reply to all button or the like - they will never be seen other than the sender and recipient. Again, such emails are discoverable in a myriad of circumstances, and most commonly in client disputes.

We should be working with our clients - not against them.
If you can't stand the client, you shouldn't be working for them. Life is too short.

7 Habits of Highly Ineffective Lawyers

A post from JD Hull at his What About Clients blog is a lighthearted look at what makes a "useless" advisor to in-house counsel. Mr Hull notes the following attributes:

1. Be risk-averse at all times. Clients have come to expect this from their lawyers. It's tradition. Honor it.
2. Tell the client only what it can't do. Business clients are run by business people who take risks. They need to be managed, guided, stopped. Don't encourage them.
3. Whatever you do, don't take a stand, and don't make a recommendation. (You don't want to be wrong, do you?)
4. Treat the client as a potential adversary at all times. Keep a distance.
5. Cover yourself. Write a lot to the client. Craft lots of confirming letters which use clauses like "it is our understanding", "our analysis is limited to..." and "we do not express an opinion as to whether..."
6. Churn up extra fees with extra letters and memoranda and tasks. Milk the engagement. (If you are going to be a weenie anyway, you might as well be a sneaky weenie.)
7. As out-house counsel, you are American royalty. Never forget that.

I recently read an article from a former in-house counsel, who has now returned to private practice (and apologise to him because I cannot locate the article to attribute the comment). He noted that the best external lawyer was the one who when consulted would say:
"Yes, there is a problem - but I have some solutions."

The Harris Cost Lawyer/Mahlab Recruitment survey found that one of the most pressing issues for in-house counsel was keeping aware of corporate activities that may have legal implications. In-house counsel needs to be able to find solutions to issues brought to them by their internal clients. They don't need external counsel to simply present them with barriers - too many external lawyers take the approach recommended in point 2 above.

Be Brave - Turn Away a Client

It is one of the Laws of Cost Disputes that any client coming to you from another firm should be treated with care. The greater the number of previous law firms, the greater your wariness should be.

Find out why the client is changing firms. Is it due a lack of performance on the part of the previous firm - and is that lack of performance genuine or due to unrealistic client expectations?
Is the client moving because they didn't like the advice the previous firm was giving?
Was cost the issue - and if so, are you capable of delivering to meet the client's expectations?

If the client is moving for genuine reasons and you can meet their expectations, you still need to realize the client may be coming with a history of unhappy experience of lawyers. This gives you a great opportunity to prove you can do better than your predecessors, and if you achieve the difficult task of changing the client's attitude to lawyers, you will have won a loyal new client.

However, there are times when you should turn the potential client away

• if client expectations are unrealistic and can't be met
• if you for whatever reason, cannot meet the client's expectations, maybe because you don't have sufficient expertise in the field, or don't have the time to properly devote to the matter
• if the client has had such a bad history with previous lawyers that they are unlikely to ever be satisfied, no matter what the result
• if, when you discuss costs with the client, they indicate concern about the ability to pay at the level you are discussing.

So - be brave. Think about whether the client merits the time and effort.

Paper, Scissors, Rock to resolve Discovery Brawl

Discovery fights take up huge amounts of court time, can be expensive and time consuming for the client. A US judge found a novel way of resolving a discovery fight in his court as Jim Calloway explains. Why leave it at discovery? Imagine resolving the building dispute with a game of Monopoly, a Family Law dispute with a round of Snap, or a commercial dispute with a game of Risk. Anyone for pistols at 20 paces?