Crazy is as crazy does

Judge Richard Posner is one of the most iconoclastic voices in American law.  As a major voice of the “Law and Economics“ school of thought, Judge Posner is much revered and much criticized; much studied and much reviled, all at the same time.  Suffice to say, he takes full advantage of life tenure.

Just today, the excellent Above the Law blog published a quote from Judge Posner that seems to attack lawyer pay scales.  It reads as follows:

Differences in the quality of lawyers wouldn’t matter a great deal if, for example, they were compensated as judges are: with a uniform government salary unrelated to outcomes or the relative wealth of the respective parties in a case. (The analogy is to a “single payer” system of medical care.) There would then be no contingent fees and no $1100 an hour billing rates. My pay isn’t docked if I’m reversed by the Supreme Court, and neither do I get a bonus if the Court affirms a decision of mine.

The reactions I’ve seen from various lawyers commenting on this have been what you’d expect, ranging from “hell, no!” to “oh, hell, no!” to “what is he, some kind of commie?  Hell, hell, HELL, no!”

The commenters have a point.  There are plenty of bad lawyers out there, and the longer you spend in practice, the more of them you encounter.  There are lawyers who bring bad cases, lawyers who raise bad defenses, and lawyers who just aren’t all that good at the practice.  Establishing a solid practice is hard work, and the effort involved in graduating law school and getting a license is miniscule compared to what it takes to establish oneself in the legal marketplace. More effort (translation: money) leads to better representation, or so the theory goes. But is Posner’s suggestion completely crazy? Does the current system actually guarantee better representation for more money? I’d suggest that, no, it’s not, and, no, it doesn’t.

What you pay for isn’t what you get in many instances.  The “$1100 an hour billing rates” Judge Posner references are the rates charged by the large law firms that dominate the legal landscape for similarly large corporate clients.  Does that mean their services are over four times as good as that provided by the firm that charges $250 an hour for the same thing?  Probably not.  In my area of practice, what a good lawyer needs is thoroughness and discipline of approach and a certain legal imagination–an approach to the law that pushes the boundaries and makes the, at times, unorthodox argument.  In my experience, in-house counsel positions, those who often make the decisions for corporate clients on whom to hire for cases, are where legal imagination goes to die.  The big-name firm is a surer bet than a no-name firm, even if the capabilities are the same.  If everything goes south in a case, a general counsel can always say “hey, I hired the big guns” and avoid the accusation that he or she went cheap to save a few bucks in the short run, costing the client in the long.

As a small firm–actually, smallest of the small–lawyer, I can say that I’ve had my fair share of cases opposite major national firms. I can also say that I’ve acquitted myself pretty well.  I haven’t won everything, but I’ve probably won against such firms more often than I’ve lost.  And I can also just about guarantee you that I’ve charged my clients for an hour’s worth of my time less than what those firms charge for an hour’s worth of their lowest-priced associate’s time.  But will I ever be representing one of those major firms’ clients?  Don’t bet on it.

And that’s why I think Judge Posner’s statement has some merit.  It’s not that all lawyers should be charging the same amount or paid the same amount, but there should either be a real relationship between payment and results or we should stop pretending there is.  As things currently stand, the relationship between payment and results is negligible, at best.  So why is the current system any less crazy?