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Speech Given to Continuing Legal Education - ICLE Legal Malpractice Article 2010

Some Ideas about Very Big Law Firm Malpractice

Much contemporary writing contains the same warnings, even if they’re snuck into the body of the piece. This is it: I really know very little of this tale I will relate. I only report what I saw, may have seen. I have grouped things in some way that makes sense to me but I do not claim it should make sense to you.

There is an Aristotelian problem with my piece, shadows on the wall. I have never worked in a VBLF (Very Big Law Firm). I go to no meetings, file no reports, have no regular rules for attendance or dress code, no five-year-plan for growth. If I win, I get all of the money. If I work on Saturday, I do it at home and don’t check to see if others are also working. There are no cabals at my firm and no coups in the offing.

The things I offer here are based on reflections. I have never been in the room when the VBLF’s make their decisions. Everything I say could be entirely wrong.

So, there you go.

I. How Very Big Law Firms Commit Malpractice. Why they get in so much trouble. I suspect the VBLF’s would say that getting sued sometimes is a consequence of handling such complicated, sophisticated, important things; also that their clients are successful people, unaccustomed to losing so, when that happens, the VBLF gets blamed.

They would say that -- but those are not the reasons. Most of what they do is what the rest of us do, contracts and divorces and real estate and suing. Their job is the same, read things carefully, get the work done on time and try to exercise good judgment.

Here are some of the real reasons they get sued:

i. Big law firm view of conflicts -- I won 2 big cases recently against this big law firm and, being a contingency fee lawyer, made SO MUCH MONEY! Yay! My financial adviser told me I now absolutely, had to have a proper estate plan and he would have this excellent estate lawyer call me. Less than an hour later he called and we chatted for a few minutes and then I said, what firm are you at and he told me; it was the firm that I got all this big dough from. So, I said, ugh, well, I got a lot of this money from you and your partners. You’d be giving me advice about that money. Kind of bad ju-ju, don’t you think? He said no, he didn’t care about it, those cases had nothing to do with him or the estate-planning department and he’d be happy to have me as a client. I said, would I come there and meet your partners and shake their hands, happy, happy and just ignore this, hmm, past unpleasantness? He said we could just do the estate planning at my office and through email, etc, if I didn’t want to come to his office. That was no sweat.

I declined his offer. Sheesh.

The meaning of life at big firms is to bring in the (paying) business. The firm will worry over conflicts some other day. I could regale you with countless stories of VBLF’s doing things that clearly are conflicted. I expect that I have made as much money with them on the conflicts rules, RPC 1.7 and 1.8 as on all the other ethics rules combined. It’s a gold mine for me. I have no worries that it will ever stop.

ii. The economics of the big law firm is that the partner reels it in and the associates do the work. It’s pointless to deny the model. For the partners to make a lot of money, they have to have lesser-paid bots doing most of the work. The unacknowledged problem is that it’s a poor way to do complicated things. The Yankees want Jeter to actually play shortstop and that is what he wants too (and he practices everyday, fields grounders, takes bp.) He does not use a HS kid to do all that for him and then just show up for the playoffs. That is how most things run, you get your best players out there. Apple found the best designer for the IPOD, not the cheapest one. If Apple had followed the VBLF model, the IPOD would suck instead of being so great. Clients have come to tell me of the malpractice from the big firms and they seem stunned it happened there. They hired the VBLF for the seeming safety of the institution I tell them this truth: you are not getting the internationally –known VBLF but only the lawyer you are getting, the one working on your case. If it’s a punky 32-year-old who has never tried a case, whose sole ambition is to make partner next year, you were doomed from the get-go. McDonald’s may serve up the same hamburgers everywhere but lawyers are not hamburgers.

iii. The bunker mentality. It’s pretty well-settled by historians that Hitler did not get good advice from his generals, scared as they were of his immense power. The turn East toward Russia, they knew, was a disaster. (On a personal note, when I was going through the worst parts of my divorce and couldn’t sleep, I’d watch the History Channel and at 3 AM there was always footage of the Nazis, frozen at Stalingrad, actual blocks of frozen, dead Nazis, blown down the hill by 200 MPH winds, end over end, bouncing harmlessly onto the frozen Volga. I’d just laugh and laugh. Sometimes the pieces fit together so well.).

There is no doubt that the managing partners of VBLF’s are not hearing too often that the firm or a lawyer at the firm might have made a mistake. Mistakes are not confessed since the environment makes it personally too darn expensive to do so. Mistakes are not often uncovered since there is no money in redo’s, in doing over the associate’s work. What’s more, VBLF’s are not a great environment for creativity, pushing the outside of the envelope, doing it your way, right? So when someone like me pops up and says the firm is not so great, the managing partner and his executive committee have to travel a much further distance than the rest of us, who hear about our failings far more often. Everyone toadies to the managing partner and the Comp Committee and that way enlightenment and humility do not lie.

iv. Presssure to bill and bill. Large law firms may or may not do good work but, either way, they do not do it cheaply. Many clients are appalled by the gigantic bills generated, the immense staffing of even minor matters. $200 per hour for a paralegal? $400 for some 5-years-out, callow kid? Three lawyers attending a motion?

The firms must realize that clients are often irritable about this when things are going well. Just imagine the reaction when things go awry. And picture a jury contemplating all that, too.

II. How Very Big law Firms Defend Themselves.

i. How they view the suit Despite the furious internecine fighting of big firms, the Law Journal-front page stories of disloyalty and self-aggrandizement, many firms when sued see it as an attack on each of them, on La Cosa Nostra. The react less like lawyers than as soldiers. This too does not make for a normal handling of what, at its heart, is just another lawsuit.

Though here is a wild and contrary guess. Let’s suppose that the real estate department has done something that has caused a malpractice suit. At the year-end review, when the money is being divvied, the department accused has to answer for the costs and expense of the suit, for the humiliating.htmlects of it. If that is so, what would game-theory suggest? That the other departments would like to have this case go on for as long as possible, so that every December the case is still alive, still there for the not-sued departments to use to whack around the sued real estate department. And consider the argument of the litigation department, if the firm is representing itself: our billings were down a bit this year since we spent so much time defending our firm based on the claimed malpractice of the real estate department.

Does that happen?

ii. Their huge deductibles. VBLF’s often have deductibles of $500,000 to $1,000,000; I recently saw one of $4,000,000. This large deductible probably makes economic sense for a VBLF but it also drives a lot of decisions.

A. If the view in the war room of the VBLF is that the case is likely to be resolved for less than the deductible, the firm will likely represent itself. It makes sense, of course, in a way. But this is one of the reasons that these cases do not follow a predictable or normal trajectory.

It is the rare lawyer who can represent his or her own firm in a rational way. There are too many conflicting pressures. How does the litigation partner explain to the real estate partner why the case is still going on, why the hated plaintiff and the pipsqueak plaintiff’s lawyer are still alive? Is the litigation partner annoyed to be spending his time on this unproductive stuff caused by a mistake made by a partner he barely knows? There are regular attorney-client conflicts but this is akin to Tom Hagen trying to keep the family together despite Sonny’s explosive temper. There are even odd privilege issues e.g. if the real estate partners speak to each other after the suit is filed and the litigation partner is not present, is that a privileged conversation?

(If the firm hires a lawyer and pays him, it usually hires another VBLF. The problems this creates are discussed in the next section.)

B. Choice of counsel. VBLF’s pick their own counsel due either to the immense deductible or because VBLF’s, unlike the rest of us, have a choice-of-lawyer clause in their policy. So the managing partner of VBLF picks the type of lawyer with whom he is most comfortable, with whom he shares a culture.

He picks the lead litigator at another VBLF.

This is all well and good, normal. Geese fly with other geese.

What they lose here though, is the most important part of what a lawyer does for a client -- give objective advice about how this might come out, about what should be done. If I hired my best friend to represent me, chances are quite good that he would side with me and support my view that I am blameless. On the other hand, the lawyer’s job often is to deliver bad news. “You have real exposure here. Missing a statute of limitations is hard to defend. While we can say the underlying case was a loser anyway, how can I prove that now? You never once put that in writing in 4 years of hard work for which you billed $800,000. In fact, you said and wrote the opposite.”

i. Conduct of the VBLF on defense. There is a certain arc to how the litigation partner at a VBLF defends the other VBLF. The first contact with me is dismissive, arrogant. I once had a lawyer call me to tell me that he did not even understand why he was on this case since it was only worth $700,000 and he just doesn’t handle cases of that size (I couldn’t explain it either). Usually there is a letter, the case is frivolous, withdraw it now, you are a pathetic little man. The managing partners then often make motions to dismiss, motion for a more specific statement, motion to stay, motion to accelerate, motion to go at normal speed, whatever. First is that this is just how they do business on everything. Make it bigger, staff it up, more paper, more noise, all that. Second, they must think they can just produce more, wear me out by the sheer tonnage of the production.

Once that comical nonsense proves unsuccessful, the litigation partner hands off the case to others, the high-testosterone kids in the firm. There is a lot of activity, lots of notices and motions but, since the youngest lawyers often know little -- and even if they have handled some cases, most of them have not handled a legal malpractice case -- their work is way off the beam. Lawyers who may NEVER have had a jury trial are, suddenly, doing all the work to prepare the case for a jury trial.

Now the VBLF defendant is getting the same treatment as any other VBLF client.

A year later, this is what happens. When a document is passed from the associate to the partner at the oral argument or at the deposition, or I see the associate whispering to the senior partner, I know I am in good shape, I feel joy. I realize that the associate and I are the only ones who know the case and the partner and I (and I am not sure about him or her) are the only ones who know how to try the case. They have split the job, like a Formula One driver who has a midget pushing the gas and brake, while he steers the car and figures out how to win.

To call that an advantage would be a huge understatement.

A few more obnoxious generalizations and I will close.

What is a litigator? Here’s my definition. It’s the most disagreeable character in the law firm. I have a case right now against a VBLF and it is represented by one of the storied VBLF law firms of New Jersey, in the person of the managing partner of that firm (and his disagreeable, .htmliring) kinder. He asked me for an extra two weeks to get me the overdue discovery and I said sure and could I, in turn, amend the complaint without the necessity of a motion? He said “no” to me, with great irritation. I then said, well, not too keen on doing you a favor either then, right? Do you get my thinking here? And rather than working that out, he wrote a letter to the judge, suggesting that I was a kind of extortionist, seeking special treatment to which I was not entitled. Now, I can amend the complaint “as a matter of course” nearly anytime just as late answers to interrogatories are not such a big deal (I say all this for the litigators who are reading this and may not know any of it). He felt used, that I was somehow a trickster. Litigators know how to fight over the meaningless, how to turn a 2-hour deposition into a two-day marathon of tedium.

But do they know how to try in front of a jury a legal malpractice case? It seems to me that the answer is no, hell no.

Fortunately for us all, these cases are just about money. It’s good that no one is executed if the case is lost. That’d be a shame.

But the big firms have advantages, too. This isn’t all about me.

The big firms are kingmakers. I sued a VBLF in a large NJ suburban county and after the case percolated for 2 years, I was informed that there were only 2 judges in this county -- of more than 30 -- who were not absolutely conflicted out, either by being former partners, having their divorces or real estate empires run out of there, friendships or for some other reason.

That was rather nerve-wracking news to hear, especially at that late date. (The judge who was not conflicted did a fine job, by the way.)

I lose cases on motion far more often than I think I would if the case was about any other area of the law, with any other type of defendant. I mean no harm by this observation; unlike my clients’ view of this, I am quite certain that judges are not corrupt. It’s just that judges, like other lawyers, especially respect the VBLF’s. It seems to me that they see things a certain way -- that lawyers (in contrast to, e.g., homebuilders and drug companies and truck drivers) are basically good people and that VBLF’s are where the highest iteration of these good people work. Judge’s often can’t see legal malpractice claims with any more clarity than doctors bring to their view of medical malpractice claims.

But my side has its advantages, too. If my case does not get tossed on summary judgment, I get a jury to resolve things. As much as judges like lawyers, juries dislike them 10 times that amount. These cases are hard to lose at trial. Even a VBLF litigator could win a plaintiff’s legal malpractice case, probably even the 32-year-old associate.

Well, maybe not, but you get my point.

Conclusion: I wish all my cases were against the VBLF’s and that they were always represented by other VBLF’s. I love it. I enjoy the fury of the early skirmishes. I am deeply amused by the objections to everything, the many motions, the 80-page briefs, the threats of sanctions. I love watching the team show up for a deposition, the 55-year-old-litigator, the 40-year-old junior partner, the 32-year-old associate. For me it’s pageantry, a familiar dance, like “The Nutcracker” heralding the Christmas Season. It’s all fun.

And it all pays very well.