Strength in Numbers
October 21, 2008» Center for the Empirical Study
of Legal Practice on the Web
Empirical studies bring new understanding of the day-to-day work of lawyers
by Mary Lahr SchierConsider the lawyer’s contingency conundrum:
How will the settlement in each case affect the relationship with his client, his reputation as a lawyer, and his bank balance?
Or, imagine this choice:
A new client calls with a small legal issue that needs attention. It’s barely worth the attorney’s time. Will she take it? If she’s a smart lawyer, she might. After decades of digging through case files, camping out in lawyers’ offices, and collecting information about what typical lawyers do and why, Bert Kritzer can paint a picture with numbers about the legal profession and the often complex calculations lawyers make about how to handle individual clients and cases.
“Numbers speak only when asked,” says Kritzer, a professor of law and the director of William Mitchell’s new Center for the Empirical Study of Legal Practice. But as Kritzer is quick to add, if you know the right questions, numbers can also reveal much about how justice works and how it isdistributed in society.
The Survey Says…
Kritzer, who joined the William Mitchell faculty in 2007, is an expert on the work of lawyers and the civil justice system. His research is unusual both for its empirical approach and its focus on what he calls “ordinary lawyers,” the men and women who deal with the relatively modest disputes over property, injuries, and contracts that make up the bulk of legal cases. Kritzer’s research into attorneys’ roles as professionals, brokers of justice, and business owners provides fascinating insight into the work William graduates are likely to undertake.
Repeat Business
For instance, why would a lawyer take a small case from someone he or she has never met? Lawyers know that many of their clients are repeaters, says Kritzer. In a study of Wisconsin attorneys, he found that 19 percent of lawyers’ new cases were from old clients. Even among personal injury lawyers—those less likely to have repeat business—about 10 percent of clients were repeat business. In addition, about 25 percent of attorneys’ clients were referrals from past clients. “Smart lawyers recognize that satisfied clients are their single-biggest source of income and work, so they often do things that don’t immediately make sense in a financial way if they perceive the client might be a repeater,” he says.
Risk and Reward
In contrast, advertising, which is often portrayed as a source of increased litigation, is a minor part of how most clients find attorneys. It accounted for only 8 percent of new cases for personal injury specialists and 3 percent of new cases overall in the Wisconsin contingency fee practitioner surveys.
What about the broader issues facing lawyers who take cases on a contingency fee basis? Contingency fees involve complicated risk and reward assessments, says Kritzer, who has written articles and a book on the subject. Initially, the lawyer needs to consider whether to accept the case. In the Wisconsin survey, he found that lawyers who received fewer than 1.5 contacts about cases per week accepted about half the cases. Those receiving more than 1.5 contacts accepted about 40 percent of the cases. Once a case is accepted, the lawyer negotiates a fee arrangement, which may be a straight contingency fee or a hybrid involving hourly or flat fees and a contingency element. With contingency comes risk. In the Wisconsin sample, 11 percent of the contingency-fee cases resulted in the lawyers losing money—sometimes at a rate of more than $1,000 an hour. But others hit the jackpot with cases that yielded many times their normal hourly rate. Overall, lawyers generally do better than their usual hourly rate. For instance, in the Wisconsin study (which was completed in 1996), lawyers earned $242 per hour on average for contingency work, almost double their usual rate at the time.
A Question of Potential
Kritzer has noted that lawyers working for a contingency fee constantly reassess each case’s potential. For instance, imagine a common slip-and-fall case where the lawyer believes it would settle for about $25,000 and has informed the client of that. When the defense offers $30,000 to settle the $50,000 claim, the lawyer “will hold out for a bit more. If he or she can get a few thousand more for little additional time or effort, the return, in terms of fees and client satisfaction, is very good,” says Kritzer. Very few cases go to trial, he adds, because—concerns about risk aside—the effort required for a trial is usually more than the possible increase in monetary award. Lawyers who take contingency-fee cases generally understand that the profitability of this part of their business depends on the set of cases they pursue rather than a single case. It’s not whether the lawyer hits a home run; it’s the batting average that matters. “Of course, lawyers certainly hope to hit a home run,” he says. Unique Perspectives Kritzer approaches his research from a different perspective than most legal scholars, who have tended to focus on lawyers in large firms and those handling mass tort cases. A political scientist who taught at the University of Wisconsin– Madison for more than 30 years, Kritzer is an expert on the collection and analysis of data about political institutions and activities. Early work on judicial decision-making led to his involvement in a large-scale study of the civil justice system, which he quickly concluded was “a lawyer’s game—the single-biggest cost of civil justice is the cost of paying lawyers,” he says.
To understand why lawyers do—and charge—what they do, he began collecting data on ordinary cases and observing lawyers for weeks or months at a time. This ethnographic research has supplemented survey research, case file information, and interviews to create a trail of “little things that add up in important ways,” says Kritzer, noting that, for instance, a recent project found that income was not a primary factor in whether an individual went to a lawyer because of a dispute.
Kritzer has several projects in the works, including a study of defense lawyers. Earlier work led him to the observation that defense lawyers often had very little authority to settle cases for insurance companies. He now wants to examine the differences in approach between staff counsel for insurance companies and lawyers who are members of private firms that work for insurance companies.
His ultimate goal: develop a broader knowledge to help law students better understand the profession they are entering. Says Kritzer, understanding the day-to-day work of lawyers in concrete ways “creates more realistic expectations on the part of students.”
Mary Lahr Schier is a Northfield, Minn.- based freelance writer.
