Because The Customer Is, At That Point, Often Wrong


My Paladin Didn’t Charge Split Fees post stirred up some interesting discussion between criminal-defense lawyers and others in the comments.

Mississippi criminal-defense lawyer Remy Orozco, who wrote the post that inspired mine, commented:

This last year in private practice has brought me very few cases where my clients actually wanted to go to trial . . . . I one day hope to get my practice to the point where everyone that comes to me is willing to go to trial.

Richmond, Texas criminal-defense lawyer Derick Smith wrote:

The most important point to be made is there are many folks in the criminal justice system that do not qualify for court appointed counsel but going into more debt to pay an all in one fee when they know they are not going to trial becomes unnecessary. Your suggestion you try to do the right thing if a case pleads early actually puts you in an awkward position of figuring out what to refund. Most importantly those of us who charge split fees should be telling our clients if you cannot afford my trial fee you should not hire me because I do not want you to take a plea because of lack of funds.

These are two of the arguments for split fees: that not all clients can afford to pay for trials; and that not all clients want trials.

As Clay Conrad wrote in comments to my Paladin post, “On an hourly basis, very, very few criminal defendants can ever afford a trial with a good lawyer.” A client paying a flat fee is not paying for a trial. He is paying to cover the chance that a trial might be necessary.

(A client paying a split fee is probably not paying for a trial either. If the contract is typical, he’s paying for the case to be set for trial. Most cases set for trial are not tried.)

If under a split-fee arrangement the client would pay $X for the case until it is set for trial and $Y when it is set for trial, the equivalent flat fee would not be $X+Y but $X+tY, where t is the likelihood that the case will be tried. The lawyer guesstimates t from her experience with similar cases and similar clients; t is never more than 1 and in fact is almost always less than 1. If the lawyer thinks that the case has a very small chance of going to trial, then the flat fee will be very close to X.

A split fee makes it possible for a person to hire a lawyer, paying her $X and hoping that either a trial will not be required or he will be able to come up with the trial fee $Y (tax refunds, loans from family, car sales). When a trial setting is required, there is a substantial chance that this client will not have the resources to pay for a trial. (People don’t get accused of crimes because of their superior life-management skills; the tax refund never arrives as expected and the car isn’t worth what the client hoped.)

In that common situation, where setting the case for trial becomes necessary and the client can’t come up with the agreed-upon trial fee, the client and the lawyer have several options, none of them good.

  • The lawyer can try to withdraw from the case and leave the client to his own devices. This might be best for the lawyer (if the judge allows withdrawal) but it’s fairly bad for the client, who now needs a new lawyer to start over fresh, has little money, and, at best, is going to get a court-appointed lawyer not of his choosing.
  • The lawyer can write the client a letter like this, which will poison the relationship between lawyer and client.
  • The client can decide to plead guilty instead of doing what’s legally best for his case. This is probably the worst option for the client, and it casts the most discredit on the lawyer.
  • The lawyer can stick with the client and set the case for trial, converting her $X+Y split fee to a $X flat fee. This option is best for the client, and bad for the lawyer’s wallet but good for her soul.

There are people who can’t afford to pay a lawyer to be prepared to try their cases. These people—the working poor—should have court-appointed counsel. They shouldn’t be forced by indigency to take half-measures. Lawyers shouldn’t participate, by providing half-measures, in the system that unconstitutionally denies counsel to the working poor. They can more ethically participate in that system, if they want to, by representing the working poor for a reduced flat fee.

Charging split fees to people who might not be able to afford the trial fee strikes me as opportunism—extracting the most money from the most people. The only people who lawyers should even think of entering into split-fee contracts with are those who will unquestionably have the money to pay the trial fee. In many cases, even where the client swears that he can pay the trial fee, there is no way for the lawyer to know that he will be able to do so when it becomes necessary; the only way to ensure that is to charge the client a fair fee up front for doing whatever needs to be done on his case.

What about Remy’s clients who don’t “want” trials or Derick’s clients who “know” they are not going to trial?

Here’s what I tell the potential client who comes to me seeking a lawyer for a quick plea:

I’m not the right guy for that job. If you are determined to plead guilty, hire someone else. If you want to at least try to find a way to beat the case, though, I might be the lawyer for you. I treat every case like a trial case from the beginning. I do that for several reasons.
First: you haven’t seen the offense report, you haven’t interviewed the witnesses, you haven’t read the law, you don’t know the court, and you don’t know the prosecutor. You’ve got no idea whether the best way to handle your case is to force the government to try to prove you guilty before a jury or not. Will you go to trial or plead guilty? You’ll get to make that decision eventually, but at this point you just don’t know, and—while I have read the law and know the court and probably the prosecutor—neither do I.
Second: in most criminal cases the defendant’s only bargaining chip is his (and his lawyer’s) willingness to go to trial. If the prosecutor figures out that you are or I am not willing to go to trial, that bargaining chip all but disappears. If you go into court looking for a quick plea, you’re not likely to get as good a plea deal as if you go prepared for trial. In preparing for trial—researching the law, interviewing the witnesses, subpoenaing records—we often discover things that improve our bargaining position even more. So even if you end up pleading guilty—and the fact is that most people plead guilty—you do better if you start by trying to find a way to beat the case.
Third: on those occasions when I’ve given people this talk, and they’ve decided to hire me to try to find a way to fight instead of just pleading guilty, we’ve beaten their cases about half the time. If we look for a way to beat the case—which means we prepare for trial—I might be able to persuade the government to dismiss it.

A lawyer would be serving his client poorly if he advised him on whether to plead guilty or go to trial before—at a bare, stripped-down minimum—reading the charging instrument, reviewing the offense report, and discussing the allegations in the offense report with the client. (I’m not saying this is enough; I’m saying that less than this is not enough.)

When he comes into your office, the client doesn’t know whether his case will eventually be tried, and how he wants (at that moment) to resolve the case is based on near-total ignorance of the system. He hasn’t read the charging instrument, hasn’t reviewed the offense report, and doesn’t have the lawyer’s training or experience. He also doesn’t know the possible collateral consequences of pleading guilty or the full range of possible resolutions short of trial.

The larger part of our jobs as lawyers is to understand the facts, understand the law, and help our clients make the best decisions based on our knowledge and wisdom. Helping people decide whether to accept a particular plea offer or instead go to trial is where we earn our keep. When the client has made up his mind to plead guilty, the person who uncritically facilitates the client’s plea is serving not as a lawyer but as a travel agent.


0 responses to “Because The Customer Is, At That Point, Often Wrong”

  1. I agree completely that the correct mathematical way of thinking about the one-fee-fits-all-pricing is your Sklansky-esque $X + tY formula. But may I suggest that the same thing is possible in a split fee arrangement as well? It’s really a modification of your option #4.

    I “charge” a split fee, but know damn well I’m not going to collect a trial fee most of the time. Heck, even if it’s a negotiated dismissal, say, take a class, do CSR and dismiss the POM charge, I don’t get the “pretrial” fee in full on all of those cases either (payment plan and down payment being nearly synonymous to most of my clients, unfortunately – that’s an exaggeration, but still…)

    The $X +tY formula, when figured correctly by the lawyer, will even out. Over time, t% of cases will go to trial, and the lawyer will average $W total for each type of case. In this instance $W is the exact amount that client pays for representation, because I assume as you have said before that you are collecting $W in full up front.

    But you don’t have to be unethical (and, “Hey, no trial if no more $$” – which is the functional equivalent of “Hey, you have to plead guilty if you don’t pay me more $$” – is unethical, if not under the State Bar rules, then under mine) to charge a split fee.

    Over time, I too average a certain amount per type of case, but (a) that average is less than $W – let’s call it $Z, and (b) not every client pays exactly $Z for exactly the same type of case. Some pay more, some pay less. So ballparking the down payment, monthly payments, etc., becomes more difficult to gauge in terms of me trying to hit $Z/case over time to make my monthly nut.

    I’ve got two trials coming up, a DWI where my guy hasn’t paid a dime of the trial fee, and an Assault Family Violence, where there’s plenty of time left, but I’m not really hopeful I’ll see much more $. And the second one’s not done paying the pretrial fee. In both of these cases I don’t need the P knowing I’m going to back down. So trial it is.

    I know they’re not reducing the DWI (I wouldn’t if I were the State), and the other one really is a crap case that I will never plead, but they may not take to trial either: Complainant threatened to kill my client’s dog, and according to her, he punched her in the face with a closed fist, but the officer goes out of his way to point out that there are no bruises, not even a scratch. Also there’s an NLS involving complainant being on a meth binge that I may be able to somehow squeeze into evidence, or at least allude to, or get a surprised look from her or something. Anyrate, so many defenses it’s a great case for me.

    I have never ever told someone they couldn’t set a case for trial because they were behind on money. I’ve withdrawn for other reasons, primarily, you change your address/phone number, won’t come into my office to talk to me, basically the “you won’t help me help you” withdrawal. But never for $. (Or for $ alone – it’s true that the folks that disappear also don’t pay, I suppose.)

    I’m of two minds on this. One: those better able to pay are subsidizing those with fewer resources. I kind of like that. Two: F all this debt collection crap, I need to be more like Mark Bennett, raise my “price” from $Z to $W, ask for it up front or not at all, take fewer clients, etc. It’s tempting – but hard to break myself out of the mold I’ve been doing it in for so long.

    Congratulations: you’ve won the award for what I think is my longest comment on a blog post ever. Usually by now, I’d just turn the darn thing into a post of my own. But I’ll be damned – despite occasionally posting random ideas that pop into my head and other garbage on my blog – I’ll be damned if I’ll go so far into reverse advertising that I’m gonna admit I don’t “expect” potential clients to pay their fees in full.

  2. Mark

    Interesting series of posts. The same issues arise for civil lawyers. I’m often asked by potential clients to amend fee agreements to reduce my percentage if we settle the case in a short period of time. My response is “if I settle your case quickly for a reasonable amount and you’re paid within a few weeks instead of a year or two, I’ve done a better job and should get a higher percent, not lower.” I think that’s a typical issue that arises for those of us in the plaintiff’s bar.

    But I had a conversations with a defense lawyer in Austin earlier this week, and he is doing defenses on non-hourly agreements. The attorney was recently approached by a client that needed a case settled. The fee was a tiered fee where he got paid X amount depending on when the case settled, but it was decreasing. For example, if he settled (for an amount agreed upon by the parties) in 30 days, he was paid $150,000.00, 6 months $100,000.00 and decreasing as the case progresses.

    Whatever the context, I think we would all be better served if we could really sit down and think about our client’s objectives and align our fees so that our interests are more aligned.

    • True for a lot of things, I think. Most of what many people “produce” isn’t a fungible commodity. (Not even fungi — the ‘shrooms I buy from my friend’s cousin, who owns Forest Mushrooms, are better than the ones I get at Byerly’s, even though Byerly’s carries them, too. The ones in the store have been sitting in plastic for days; the ones I get were just cut off the long plastic tubes of growing medium hanging in a room that looks like something out of a horror film, except without the dead bodies.) Good lawyers (and good accountants and copywriters and mechanics, and . . . ) aren’t selling the commodity of “hours,” even if they bill that way — they’re selling their experience and judgment and skills, developed over time.

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