Do lawyers ignore their clients' best interests?

Do lawyers’ fee agreements create an inevitable conflict of interest with their own clients? In 42 years of trying lawsuits I have seen just about everything. And some of the things I have seen worry me that lawyers are not doing enough to make sure that their clients’ best interests are protected. Part of the problem is that lawyers see client’s interests differently than the clients see them, a problem that I have addressed in a previous blog.

Another part of the problem is that lawyers’ fee agreements create incentives that do not necessarily benefit the clients’ real best interests. How often do lawyers working on contingency fee agreements for plaintiffs “underwork” their clients’ cases because a quick, even improvident, settlement increases their own earnings? How about lawyers working on hourly fee agreements for defendants, where their temptation is to overwork cases because an early settlement reduces their overall fees? I have seen law firms I characterize as “Litigation Mills” pushing cases through their offices like widgets on an assembly line. Their business success depends on client volume and turnover, not on maximizing any individual client’s recovery – more akin to the Walmart approach than the Nordstrom’s approach. If a case can be settled quickly, even for an amount that is less than what the client really deserves, the lawyer’s “productivity” improves, that is, his actual earnings per hour go up, while the client’s settlement goes down.

I have also seen other law firms who take the opposite approach and pursue a very aggressive strategy of demanding far more than the cases are actually worth and simply “rolling the dice” in hopes of a big verdict. These lawyers’ business success depends upon winning big every once in a while. They try cases that should be settled because of challenging liability problems to go for the big verdict that fattens their wallets and gives them nice publicity in the newspaper. It does not really matter to the lawyer if he loses 75% of his cases as long as he scores really big once in a while. Of course it does matter very much to the client, whose sole chance of success is the one case his lawyer decides to gamble away on a crapshoot.

And I have seen many instances when lawyers working on hourly fees do not want to settle cases quickly, or reasonably, until after they have worked their cases up to produce large fees.

Of course all this is highly unethical, and most lawyers are professional enough to make the right decisions for their clients irrespective of their personal financial interests. That level of ethics is what is supposed to distinguish professionals like doctors, lawyers and accountants from other business entities, but it does not always work out this way.

Unfortunately, most clients are not sophisticated enough to know whether their lawyers’ motivations are truly focused on their own best interests. Savvy clients often force a discussion with their lawyers about the goals that are reasonably achievable in the case, or they seek a second opinion from another lawyer if they are concerned their lawyer is not listening to them closely enough. But most clients are not that savvy, so their best option is to be careful about whom they select as their attorney. Rather than just jumping at the lawyers who put out the most advertisements, they need to research their selection carefully with references from trustworthy friends or business colleagues or lawyers who practice in a different area but can point them in the right direction toward an outstanding and ethical attorney.

Join me next week for Who represents the public’s interest in civil litigation?