A Business story yesterday incorrectly stated that attorney Robert M. Adler has not been paid for his work on a sex discrimination case against the D. C. Department of Corrections. Adler has been paid his regular fees, but litigation continues over additional fees awarded by the trial court for added risk involved in taking contingent-fee cases. (Published 7/7/90)

In the early 1970s, Richard T. Seymour was an idealistic young Washington lawyer in solo practice, handling complicated employment discrimination cases. He won every case.

But Seymour had a problem that most winning lawyers never face: He could never make any money. Three years after he opened his employment discrimination practice, he closed it, swamped with debts that would take him 10 years to pay.

Now Congress and the Bush administration are engaged in intense negotiations over the Civil Rights Act of 1990, which would broaden the rules under which employees can bring cases against companies charging discrimination on the basis of sex, race, religion or disability. But as Seymour and other lawyers point out, many good cases will never get to trial because most lawyers cannot afford to take them.

"Would I be willing to set up a small office to concentrate on employment discrimination again?" asked Seymour, now a salaried attorney for the nonprofit Lawyers Committee for Civil Rights Under Law. "No. I would be crazy."

According to a number of civil rights lawyers, the system set up by Congress and the courts for paying legal fees for discrimination cases is tilted against them. Because most plaintiffs cannot afford to pay the usual hourly fees, lawyers must agree to take their cases on a contingent fee basis -- which means they get paid only years after the suits are filed, and then only if they win. When they do win, they often find themselves in court again, haggling over hourly rates and the number of hours they spent on the case. And current rules allow no interest to be paid on the fees that are owed.

"I know of of no lawyers who will take these cases routinely on a contingent-fee basis," said William L. Bransford, a Washington attorney who had handled many job discrimination cases.

"Since 1973, people who've handled them on a regular basis have all gone out of business," said Joel P. Bennett, a Washington attorney and member of the American Bar Association's Economics of Law Practice Section. "In many cases, some of them stopped solo practice and went to big firms. The big firms won't do them. It's just not economically feasible."

One of Seymour's most successful cases is a good example of why so many attorneys have abandoned the practice of employment discrimination law.

In 1972, Seymour took on the Mississippi State Employment Service for discriminating against blacks and women in job referrals. The case was tried in 1979. Two appeals and 11 years later, a federal appeals court judge found that the state agency was guilty of willful discrimination and was ordered to pay a judgment of nearly $5 million.

However, during the 18 years Seymour handled the case, he was never paid a dime -- and still hasn't been because attorneys must wait until the case has reached its final appeal before applying for fees. The case cost him more than $100,000 in out-of-pocket expenses -- forcing him to take out personal loans.

While the problem of finding lawyers for discrimination suits is national in scope, many Washington-area attorneys said it is even more pronounced here because this is where suits against the federal government are filed. According to plaintiffs' attorneys, the Justice Department still fights cases that would be settled in the corporate world. And, when they lose, they fight over attorneys' fees -- a move that a number of attorneys said discourages them from bringing even meritorious cases in the first place.

"My experience is that the U.S. government can be one of the most difficult and irrational of defendants," said Guy Saperstein, of Saperstein, Seligman & Mayeda in Oakland. "The word settlement isn't in their vocabulary."

Stuart M. Gerson, head of the Justice Department's civil division, denies that the federal government is reluctant to settle cases. "We settle a lot of major cases," Gerson said. "We have a fixed budget, and with the S&L cases and fraud cases, we can't afford to tie up attorneys on bad cases.

"The numbers of Title VII cases continue to climb," said Gerson of the contention that it's difficult to find attorneys to pursue them. "Somebody's taking these cases."

While the number of cases does climb every year, many are filed by the employees themselves, without an attorney and never make it to trial because they can't find lawyers to work on a contingent-fee basis.

Kathy Hammond knows firsthand the difficulties of finding an attorney to handle a discrimination case. Hammond, formerly a GS-5 clerk for the Naval Investigative Service, began looking for a lawyer to file a race discrimination case against her employer last December. Since then, she has been fired from her job and has talked to at least 30 private attorneys and countless bar referral services and civil rights groups.

Why can't she find a lawyer? "Basically, money," said an undeterred Hammond. "They definitely don't want to take the case on a contingent-fee basis. ... . This is really a bad situation. It has happened to other black women {at the agency}, but they're getting away with it because I can't afford an attorney," she said, her voice rising with frustration.

The Lawyers Committee for Civil Rights Under Law reports receiving about 1,000 requests each year for assistance in employment cases, according to Joseph M. Sellers, the committee's director. Of that number, the committee takes about 50, or 5 percent.

While a number of large firms take such cases on a pro bono basis -- in Washington, firms such as Arnold & Porter, Covington & Burling, Hogan & Hartson and Arent, Fox, Kintner, Plotkin & Kahn -- they are not part of their regular business. And there simply are not enough pro bono hours to go around, according to legal experts.

Precedent-Setting Case Has Yet to Pay a Penny

In 1983, Washington attorney Robert M. Adler took on the case of Mabel King, a nurse who sued the D.C. Department of Corrections for sex discrimination. He took out thousands of dollars in loans along the way to support the case.

After prevailing in King v. Palmer, Adler was awarded attorney fees and costs. In addition, the court awarded him what is known as an "enhancement" payment equal to 50 percent of his contingent fees for the risk of taking the case. The District contested that part of the award.

Last week, the U.S. Court of Appeals unanimously found that Adler was entitled to a 100 percent enhancement -- or double his fees in the case -- which should boost his total fee award to more than $400,000.

Attorneys here say the precedent-setting case could mean that more attorneys will be willing to take discrimination cases in the District. However, the District government has decided to appeal the decision to the Supreme Court.

"Everybody thinks I'm rich," said Adler wearily, noting he has waited seven years to be paid for his work. "I'm going to have to hire an attorney who knows his way around the Supreme Court."

And, said Adler, if the Supreme Court does hear the case and the District loses, it could mean another $50,000 or more in attorney fees that the District would have to pay -- or, more accurately, that the District taxpayers would have to fork over.

"Fee litigation is among the most socially useless forms of litigation," said Joseph M. Sellers of the Washington Lawyers' Committee for Civil Rights. "Nobody likes to do it. The U.S. and District governments seem unwilling to resolve a fee dispute by simply paying it." Robert M. Adler, a Washington attorney who has handled a number of job discrimination cases in the past, seldom takes them now. "Every now and then somebody calls and they really touch you, so you'll take the case," said Adler. Most of the time, he said, he doesn't even take the calls.

One ongoing dispute between lawyers who bring discrimination suits and those who defend against them is over what attorneys call "fee enhancement."

Attorneys who take other types of contingent-fee cases are often compensated for the "risk" of the cases by getting double their usual fees when they win. However, both state and federal agencies often fight this. And, in cases brought under Title VII of the Civil Rights Act, judges in a number of states and federal jurisdictions differ on the amount of additional fees for risk.

The proposed revisions to the 1964 law now before Congress is silent on the question of fee enhancement, but it does contain language that would allow lawyers to collect interest on the fees they win. Many civil rights lawyers think that more than that will be needed to get more lawyers interested in job-bias cases again.

"No one thing will really change it," Sellers said. "Some attorneys might be more willing to take cases, but not against the government."

Saperstein, who has one of the largest practices in the country devoted to civil rights law, has stopped taking new cases. He was getting about 150 new case requests a month and decided to take only class-action suits.

"I had to put many mortgages on my house during the lean years," Saperstein said. "Not many people are willing to do that."