IT APPEARED TO BE a happy ending when a company that stood to lose $2 million in an antitrust suit brought by a rival firm got off the hook with a $185,000 settlement.
The feeling of elation for both sides quickly died with the arrival of the lawyer's bills - $270,000. The winner had just $100,000 left after legal fees, and the losing company figured it paid lawyers more than twice as much as the settlement cost.
That true scene is being repeated more and more in corporate offices and family living rooms across the country. And it is arousing some criticism within the profession as well. The high costs of lawsuits "are strangling justice and causing increasing hostility between too many lawyers and their clients," wrote Wall Street attorney William B. Lawless in a provocative article titled "Why Litigants Hate Lawyers."
Lawless is in a position to know. A former New York Supreme Court justice and dean of the Notre Dame Law School, he represented one of the parties in the suit, although he declined to reveal who they were or which one was his client. The article ran in The Judges' Journal, the staid publication of the judicial administration division of the American Bar Association.
Most corporate executives and many lawyers blame the high cost of lawsuits on what they describe as the overuse of the courtroom by citizens who have discovered new rights such as, for example, consumer rights, children's rights or stockholders rights, or they blame increased government regulations that both business and lobor feel compelled to challenge.
Lawless added two new components: "An overzealous effort on the part of the bar to prepare cases for trial with the precision of a moon shot and the elaborateness of a metropolitan opera production and the failure of trial judges who should be more courageous and should summarily dismiss frivalous claims, which clutter the calendar."
Lawless said some lawyers treat "every trial of the Piper Cub type as if they were handling a 747 itself." He accused lawyers of failing to relate the cost of bringing the case to its probable return to the client.
"In some," he said, "they are guilty of overkill."
He listed three reasons why lawsuits are so expensive.
First, he said, are lawyers' salaries. Starting lawyers frequently make more money than newly graduated doctors, engineers or teachers and, from the clients' point of view, are "unrealistic." For example he said, in large cities lawyers fresh from school start in the biggest firms at about $25,000 a year, slightly higher in New York City and some of the bigger Washington firms. Smaller firms in other cities pay $15,000. With eight years' experience, the youngest partner in a firm in a large city averages more than $64,000 - more than an experienced U.S. court judge makes.
"In most cases," Lawless said, "the law firm will pass along to the client the high cost of its lawyers' services, both novice and experienced."
One coporate executive, quoted by Lawless, noted that "attorneys like nuns, travel in pairs or three at a time with the clock running (they charge by the hour) while the client watches hilplessly."
(In fact, many new law school graduates, especially if they are not in the top of their class at a highly ranked law school, are lucky to find any job at all. When they do, their salaries are far lower than those quoted by Lawless. But the high salaries paid by the highest and best firms set the pace for the profession, and many young lawyers aspire to them. That accounts for the high cost of such every day, relatively simple legal chores as real estate transactions, uncomplicated wills, and divorces in which there are no children, little property to split and both husband and wife are agreeable to the divorce.)
The second factor cited by Lawless is the heavy use of computers and other expensive hardware "now employed too routinely by many middle-sized and larger firms" who charge these unneeded gimmicks to their clients.
Finally, he said, pretrial activities that not only may be unfair and ineffective, but also are "costly in the extreme" drive up the expenses of a lawsuit. These involve lenghty looks through a rival's files and depositions (questioning under oath) of key witnesses before both sets of lawyers. This can run to $5,000 a day (transcripts alone cost $3 a page) "and depositions and preparations of them can go on for months, if not years, "Lawless said.
All of this leaves a lawyer in a quandary. If he doesn't go all out, he may be threatened by the client with a malpractice suit. If he does, he's accused of charging too much.
For Lawless, the answer is not a matter of "corner-cutting or sloppy work. Rather," he said, "it means not committing more of their clients' cash and time than the market can possibly bear and not being carried away with grand opera staging for an off broadway performance."
This should leave the client satisfied but not in the poor house.
A drive sponsored by Ralph Nader to get law students to tithe one percent of their first year's income to a public interest law foundation has fallen far short of expectations. In a little less than a year only 160 law students have pledged to contribute, which would give the Equal Justice Foundation just $30,000 if they all come through. Nader and his aides, Mark Green and Craig Kubey, expected a far greater response - a total of $300,000 in income for 1978 and 1979, the first two years of the tithing.
According to Green, the foundation had hoped five percent of the third year (senior) students in the 16 schools approached during the past year would pledge a portion of their first year's income. Some schools, notably Yale, failed to come across with any contributions. Others, especially Harvard (seven percent) and Boston College (10 percent) were more receptive.
Despite the slow first year's campaign, which cost the Nader organization $18,000, the recruiting drive will continue. The Nader people have budgeted $30,000, the total value of all the pledges so far, for the coming school year.