Blawgletter had the pleasure yesterday of alerting our gentle readers (Uniform Rates — Bah!) to a blog we hadn’t seen before — the inimitable f/k/a, by David Giacalone. The post, relating to the tort reform credentials of Barack Obama, reminded f/k/a fans of a four-part essay Mr. Giacalone wrote (sometime before June 2006) "on the ethics and economics of contingency fees." It also noted a belief that lawyers "charg[e] virtually every personal injury client the same percentage fee regardless of how risky or easy the case might be" and that the practice "consistently extracts excessive fees from clients."
We mentioned the post to highlight our doubt that "market failure" explains why personal injury lawyers tend to charge the same percentage in contingent fee arrangements. We linked to an academic study, from January 2008, that found evidence of a "sorting" process that assigns cases to lawyers according to the lawyers’ relative ability to maximize the personal injury plaintiff’s recovery. Conclusion: the market works.
F/k/a‘s response appears, in full, below:
aside (April 30, 2008): If you’d like to see a good example of defensiveness and self-interest trumping facts, reason and legal-ethics, check out Barry Barnett’s response to my brief mention of standard contingency fees, in his posting today “Uniform Rates — Bah!” at his Blawgletter. Let’s hope his readers have the good sense to at least read f/k/a’s essay on the ethics and economics of contingent fees before coming to their own conclusions.
We didn’t mean to affront our colleague at f/k/a, only to highlight research that offers an alternative explanation. How that became "defensiveness and self-interest trumping facts, reason and legal-ethics" we can only guess.
And our point wasn’t to praise high contingent fees but to draw attention to the genuine differences between personal injury cases and commercial litigation. Things like typical clients’ relative sophistication, knowledge, resources, and options as well as the large variability of contingent fees in business lawsuits.
F/k/a and Blawgletter will part as friends. For we heartily join with f/k/a in urging our readers to "read f/k/a’s essay on the ethics and economics of contingent fees before coming to their own conclusions." But we suggest that you examine the study as well.