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How Much Does Justice Cost


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Over the years, the public has been fascinated by the legal process. One can hardly remember a time when there was not a spate of television shows that did not feature some aspect of the legal process. With the proliferation of “reality” programming, we now have the opportunity to go behind the scenes and see justice at work. Television programming both fiction and non-fiction would lead one to believe that true justice comes at a very steep price. In the race for justice, the one with the deepest pockets wins, or do they?

The media spotlight on cases that involve the rich and famous have furthered the notion that guilty or not, if you can afford a high profile law firm, you have a better chance of winning your case. O.J. Simpson, Michael Jackson and Robert Blake were all convicted by the public at large but each was found “not guilty” in a court of law. Were they able to escape the justice due them because they had the means to pay for the best defense?

The American Bar Association published a study by noted legal consultant William C. Cobb in which he discussed the value of legal services to the client. Cobb segmented legal work into four classifications – commodity, unique, experiential and brand name.

Unique legal work constitutes a “nuclear event” for the client. These are events in which life or business hangs in the balance and the client is willing to pay whatever it takes. Unique legal work constitutes less than four percent of the work in the market. Would former Enron CEO, Kenneth Lay have searched the yellow pages for an attorney for his case? Of course not, his business and freedom were at stake. Even those who may not have the money to hire the best will often find a way to either raise the funds or gain the interest of these firms. In example, Amber Frey, a witness in the Scott Peterson murder trial retained Gloria Allred as her legal representative. Gloria Allred has established herself as a defender of women’s rights. While it is certain that her firm handles many lower profile cases, she is definitely a recognizable brand. Amber Frey would not have had the financial means to retain such a high priced attorney but the case was high profile and Amber stood to gain from penning her experiences.

Experiential work is legal work that the client deems high impact or high risk. It accounts for 16% of all legal work. In this type of legal work, clients are looking for specific experience and an attorney uniquely qualified who will handle the case personally. In example, a physician that is being sued for malpractice would seek out attorneys with experience in malpractice cases. The physician would have a very narrow list of candidates based on the firm’s experience, success ratio and likely recommendations from colleagues who had successful outcomes.

Brand name legal work accounts for 20% of the market. This type of legal work is routine work but still important to the client. The client chooses a firm that has a reputation in a niche market or has established their brand. In every state there is at least one firm that everyone has heard of and typically can associate with their area of practice. The firm does not necessarily have to be high profile but simply have name or brand recognition. In example, a law firm may have established a reputation as “the firm” for civil litigation.

Finally there is Commodity work. Commodity legal work accounts for 60% of the market. It is legal work that clients feel can be handled by any good attorney. As such it is extremely price sensitive. Of course no one at any price wants to hire a bad attorney! This sector of the market is the largest. Clients are seeking good representation but for matters that are not nuclear events. Commodity work would include things like family law, minor criminal offenses, business incorporation, auto accidents and any non-complex litigation. Although attorneys may have a different view, consumers view this as “routine” legal work.

So, what does justice cost? Well, if we look at the value curve, price is determined by the market and 60% of the market will hire based on price. Consumers are not at the mercy of law firms, rather like all professional services, if prices are too high, consumers will not purchase. There is a segment of the market willing to pay a little more for good service but when there is an abundance of suppliers, most consumers will price shop.

In recent years, as large corporations have faced mounting pressure to control costs, in house legal departments have sought to decrease outside legal expenses. Corporations have instituted bidding processes, legal expense reviews and are becoming more vigilant about their legal spend. General Electric, often a trendsetter undertook a bidding process for their legal work. Microsoft has taken an active role in ensuring efficiency and effectiveness in legal work. Organizations of all sizes are using independent 3rd party bill review to force law firms to become efficient project managers, as they are not willing or able to pay “whatever it takes.”

Individual consumers too have become savvier in how they choose legal services. Many choose to forego attorneys in favor of do-it-yourself techniques. Self-representation or pro se representation in matters such as divorce is on the rise. Interestingly enough people do not simply choose pro se because they cannot afford another option. While cost may be a factor for some who don’t see the value in hiring someone when they can do it themselves, retaining control is often the bigger issue. Many simply want to direct their own legal process. Access to legal information and documents has facilitated self-representation. As such, consumers who hire professionals will also demand service at a reasonable price.

What does justice cost? Well, the answer may very well be it costs what you are willing to pay for it. Obviously, those celebrities who were on trial certainly considered their legal situation to be a “nuclear event.” When your life, livelihood and reputation are at stake and the stakes are high, undoubtedly you will not wrangle over legal costs. You will hire “high powered” attorneys with a reputation for getting the job done. However, if this work only constitutes 4% of the overall legal market, we can theorize that justice is available in all price ranges.

About the Author

Richard A. Hall is founder and President/CEO of LexTech, Inc., a legal information consulting company. Mr. Hall has a unique breadth of experience which has enabled him to meld technology and sophisticated statistical analysis to produce a technology driven analytical model of the practice of law. As a busy civil trial attorney, he was responsible for the design and implementation of a LAN based litigation database and fully automated document production system for a mid-sized civil defense firm. He developed a task based billing model built on extensive statistical analysis of hundreds of litigated civil matters. In 1994, Mr. Hall invented linguistic modeling software which automatically reads, applies budget codes, budget codes and analyzes legal bill content. He also served as California Director and lecturer for a nationwide bar review. Mr. Hall continues to practice law and perform pro bono services for several Northern California judicial districts.

LexTech provides corporate and public sector legal managers a cohesive suite of tools, professional services, and educational offerings to Manage the Business of Law.

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Article Published/Sorted/Amended on Scopulus 2006-08-28 21:40:54 in Legal Articles

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