My experience in facing large firms in litigations is that my fees are
one-third to one-half of what a firm's fees are, even when my hourly billing
rate is the highest one in a case. Some of this is due to the typical firm's
reflexive tendency to deal with each case as a profit center. Some of it is due
to the inefficiencies inherent in a firm practice.
Large firms are driven by overhead: rent on large offices, staff salaries,
associates' salaries, and targeted draws for partners all combine to make the
firm's monthly nut a substantial one. These days most sole practitioners have
cut overhead to the bone: part-time secretaries, voice mail instead of
receptionists, paralegals hired only on a contract basis, and small offices are
the hallmarks of the small practitioner in the twenty-first century. Whether
calculated absolutely or per-attorney, the sole practitioner's monthly cash
requirement is infinitesimal in comparison to the large firm's.
The efficiency arises from the limited nature of verbal communication. There is
no way that one lawyer can effectively communicate all he knows about a case to
another lawyer on the case. Only if the other lawyer is present for all the
depositions and reads all the documents and pleadings will he be truly up to
speed on the case; and doubling lawyer time in that fashion is prohibitively
expensive. Thus, a great deal of firm time is spent in one lawyer communicating
the case, imperfectly, to another lawyer on the case. The substantive losses
that one can suffer when lawyers divide up the duties of research, discovery,
and trial have been discussed above.
Because of their overhead and their institutional expectations and structures,
firms are less likely than sole practitioner to be flexible with their fees.
All attorneys in a firm are at least in part rated by and compensated according
to how many hours they bill and collect. The system gives strong incentives to
each attorney to bill and collect as much as he can. The overhead of the firm
demands these kinds of incentives. Thus the firm is not likely to be able to
figure out how to offer flat rates or contingency fees. Sole practitioners, on
the other hand, can finance a case in a wide variety of ways: hourly rates,
flat fees, contingency fees, lowered hourly rates plus an contingency, payout
plans, retainer fee up front plus a contingency for the remainder of the
case-any of these may be the right way to finance litigation, and sole
practitioners don't have to convene a committee to authorize the effective way
of paying for a lawsuit.
The most valuable trial attorney is often she who tells the client not to
bother with his case, but to swallow his pride and forget his grievance. She
may say that because the case is weak, the defendant is impecunious, or the
venue is biased. For whatever reason, there are some cases in which the
attorney can see what the client cannot: that the game is not worth the candle.
Clearly there are some sole practitioners who bring poor cases to collect their
hourly fees and there are many firm attorneys who discourage their clients'
litigious proclivities, but I must say that in my own experience the least
meritorious cases I have seen have been brought by large firms being paid on an
hourly basis. Many of us in the profession have observed or experienced law
firms who have milked large corporate or governmental clients for fees far
beyond the merits of the case being litigated. The contingent fee, more the
hallmark for the risk-taking entrepreneur than the staid firm, also helps check
the impulse to pad the docket.
Sole practitioners are no less venal than their firm counterparts, but they
simply do not have the same pressures to manufacture litigation; when they do,
they will succumb to temptation just as frequently. Chances are, however, that
the sole practitioner has shaved her overhead and can more easily give you the
advice you need to hear: that you should forget about litigation and go home