Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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The Truth on the Market Blog had a nice post last week on the growing trend of corporations performing legal work in-house rather than hiring private firms. The post commented on this ABA Journal article.

The ABA Journal article opens:

Fed-up with “sky-high” fees at outside firms, Jones Lang LaSalle general counsel Mark J. Ohringer says he now spends 75 percent of his budget on non-law firm resources.

“I’m law firms’ biggest competitor,” Ohringer said during a program at the 2011 Futures Conference on Friday, “and I don’t think they see it that way.”

Jones Lang, a global real estate and investment management firm, has boosted its in-house capabilities by 60 lawyers in the past few years, and Ohringer says he won’t hesitate to add more as the company’s needs increase. Speaking at the conference held at Chicago-Kent Law School on the future of the legal profession, he noted the average cost to employ an experienced in-house lawyer—easy to come by these days given the tough legal job market—is $125 an hour, a bargain compared to many firm rates.

My Take:

You can't blame corporations for wanting to spend $125 an hour on in-house lawyers as opposed to $500–plus (at times) on outside lawyers. I agree that this is a growing trend that will cause further erosion to the legal market. I can't really say whether this trend is good or bad for the lawyers who end up working in-house who otherwise would have been in private practice.

On the downside, many lawyers will make less money working in-house. On the plus side, much of the pressure associated with private practice will be eliminated. You could make a case that the trade off is worth it. Particularly when you consider the fact that you don't see many in-house or public sector lawyers who are eager to move to private practice. Many of these lawyers feel like they have a quality of life advantage.      

Unfortunately, this is an understandable trend that is particularly harsh on Mississippi lawyers, since there are few major corporations with headquarters located in Mississippi. This trend would have been less troublesome looking for Mississippi lawyers about 15 years ago when we had more Mississippi-based corporations.  

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The Pop Tort Blog has a post about a new report from the National Center for State Courts. Here is a link to the report, which covers 2008 (its most recent reporting year).

According to the Report, tort filings are dropping significantly. Meanwhile, debt collection actions are flooding civil courts.

Here are some of the report's statistics for Mississippi. Again, this is for 2008:

contract cases—43,456 (includes 34,971 debt collection cases (80%).

tort cases—5,545 (11% of filed cases) (includes 1,595 car wreck cases (39% of tort cases).

medical malpractice cases—241 (4.3% of tort cases).

According to my math, this means that medical malpractice cases represented one half of one percent of all filings in 2008. On top of that, defendants win most medical malpractice cases that go to trial.

Yet insurance companies can brainwash doctors into thinking that plaintiff lawyers are a bigger threat to doctors than insurance companies who refuse to pay the bills of patients that should be covered by the patient's insurance. Amazing.  

The work is never going to rebound for large defense firms who made a killing during the litigation boom in the 1990's and early 2000's. Mass tort litigation in Mississippi is dead compared to how it was back then. Some of the biggest plaintiff lawyers from that era are in jail. Other plaintiff lawyers have closed their practices or transitioned to criminal law, domestic, bankruptcy or other types of non-tort litigation work.

Making matters worse, out of state lawyers squeeze out Mississippi firms for much of any major litigation that is filed in Mississippi. Some Mississippi defense firms that are surviving in this climate do it by borrowing a page from national counsel's playbook and compete for work outside of Mississippi. That makes sense to me. In my experience the “national counsel” from outside Mississippi are rarely as talented trial lawyers as their Mississippi “local counsel.”     

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This article on the ABA Journal News website discusses the issue of law schools failing to disclose the dim job prospects to students. The article states:

While those at the very top of the starting salary scale might earn $160,000, the median among all lawyers is $60,000. So, for those in the middle of the pack, "if you have debts over $100,000, some reaching $150,000, it will be very difficult to pay that debt," he says.

David N. Yellen, dean of Loyola University Chicago School of Law and chair of the ABA subcommittee that considers what consumer information law schools should be required to report, tells the Law Bulletin that law schools need to be more transparent about job prospects.

"I believe the time has come to mandate that law schools publicly disclose more information about job outcomes," Yellen is quoted saying.

If $60,000 is the nationwide median salary for lawyers, then the median in Mississippi has to be lower. And job prospects for lawyers are at an all time low. 

Hardly a week goes by that I don't hear a rumor about layoffs at a big or medium size firm, get a phone call about a lawyer looking for work or hear a story about a former law grad delivering pizzas. Just yesterday I was looking up a lawyer on a Jackson based firm's web site. I was shocked to see how much smaller the firm was than 5–10 years ago. The firm has shrunk down to the point where most of the lawyers were at the firm 15 years ago.

I'm starting to get the feeling that many Mississippi lawyers who graduated from law school in the late 90's and early 2000's during the mass joinder litigation boom have disappeared.  I have no idea where all the lawyers who were working in Mississippi litigation ten years ago—but aren't now—went to.

Meanwhile, I heard recently that the Mississippi College Law School just increased the size of its first year class. They should be shrinking their classes instead of growing them. MC Law School is not alone on this issue. But law schools are such profit centers for schools that they will not do the right thing on this issue.

For many people, starting law school in this legal economy is a sucker bet. I can understand it for people who really want to be a lawyer and are willing to suffer to make it happen. But that applies to what? 10% of a first year class at the most? Everyone else is there because they are smart enough to get in and don't have a better idea for what to do after college.

People might be better off going to a trade school after college. If you learn a trade, are good at it and can succesfully run a business, you probably have better income prospects than a lawyer right now. Not to mention the fact that many lawyers hate practicing law.  

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John Tucker is a former partner with the prominent Chicago based law firm Jenner and Block. Before retiring to concentrate on writing, Tucker had an outstanding career as a litigator than included arguing two cases before the U.S. Supreme Court and serving as trial counsel in several high-profile cases.

Tucker’s trials included defending the “Chicago Eight”, who were prosecuted for conspiracy and inciting to riot following protests at the 1968 Democratic National Convention, and representing the plaintiffs in the Contract Buyers League cases in Chicago, which sought to end housing discrimination against African-Americans in Chicago.

The book contains much wisdom about trials, litigation, and the practice of law. My favorite observations about litigation included:

• A client's gratitude is a fragile reed.
• Litigation can be conducted calmly, with polite respect for your opponent and his client, without losing anything in the way of effectiveness. Litigation can also be conducted like a street fight,  without really gaining anything.
• The trial of a case is a competition, and if you plan to make your living doing it, you better have a competitive nature-an intense desire to win. That desire must be accompanied by an understanding of the rules and a willingness to play by them.
• In the American legal system, a lawyer's job is not to seek justice, but to win the case for his client. The primary objective of our legal system is not to determine the truth, but to resolve  disputes peacefully. Besides, in most cases where the facts are disputed, no one but the clients know for certain where the truth lies, and often they aren't really sure.
• Of all the mistakes made even by experienced trial lawyers the  most common is failure to adjust to changing circumstances in the  heat of battle. Time and again, lawyers plow ahead with questions  they had planned to ask on cross-examination even though a witnesses previous answer has rendered the planned questions unnecessary, or even dangerous.
• The most important thing a trial lawyer does is develop a logical  theory of the case that can be supported by the evidence.
•  Courtroom lawyers and people who play sports are engaged in an endeavor where there is a  winner and loser of every contest, and no matter how good they are, sometimes they lose.In fact, in both endeavors it is often true  that the better they are the harder their contests and the more  often they will lose. You don't have to like it-in fact, you had better not-but you won't last long if you don't learn to get over it, or at least put it far enough behind you to go on to the next case.
• A  trial lawyer can be quiet or loud, gregarious or shy, pretty or ugly,  and just about anything else you can think of except lacking in self-confidence.

The book also contained a few laugh-out-loud observations, including:

• The judge, J. Sam  Perry, was a senior member of the court. Perry had grown up in Alabama, but spent most of his adult life in the same western  suburb where Tom Sullivan grew up. Perry was no legal heavyweight, but he had a reputation as something of a populist, with  sympathy for the underdog. On balance, we thought he was not  too bad a draw. We didn't realize until the trial started that an Alabama populist-at least one of Judge Perry's age-is still from Alabama.
• A lesson in the virtues of law-firm seniority.  In January and February a senior-partner conducted a series of depositions in Florida and Puerto Rico while Tucker (a junior associate) held down the fort in Minnesota and  North Dakota.

The book also succinctly captured the dilemma faced by young trial lawyers working in large law firms:

• The current emphasis on the bottom line [in big law firms] has a special impact on trial lawyers. Profit expectations require hourly rates to be set so high that only major corporations can afford them, and their cases almost never go to trial. You may get moderately rich as a "litigator" for big companies, but if you try a case only once every five years, you won't become much of a trial lawyer.

Most of the cases that Tucker writes about were pro bono cases. Tucker was lucky that his firm allowed him to spend so much time working on pro bono. But he recognizes that in today’s world, few firms would allow associates to devote so much time to pro bono matters. Tucker notes that many of today’s top litigators had to leave their big firm and start their own practice in order to develop their trial skills.

My only negative comment about the book is that I did not find a couple of the cases that Tucker wrote about to be interesting. But overall, it was a great book and I highly recommend it for litigators. 

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With the legal job market in shambles, there is a growing number of blogs devoted to criticizing law schools for not doing more to educate potential students about the difficulties in finding a job after law school. Examples include:

Third Tier Reality– My goal is to inform potential law school students and applicants of the ugly realities of attending law school. DO NOT ATTEND UNLESS: (1) YOU GET INTO A TOP 8 LAW SCHOOL; (2) YOU GET A FULL-TUITION SCHOLARSHIP TO ATTEND; (3) YOU HAVE EMPLOYMENT AS AN ATTORNEY SECURED THROUGH A RELATIVE OR CLOSE FRIEND; OR (4) YOU ARE FULLY AWARE BEFOREHAND THAT YOUR HUGE INVESTMENT IN TIME, ENERGY, AND MONEY DOES NOT, IN ANY WAY, GUARANTEE A JOB AS AN ATTORNEY OR IN THE LEGAL INDUSTRY.

Exposing the Law School Scam– This blog is written by a coalition of lawyers dedicated to exposing the "law school scam." In particular, we are interested in exposing the dramatic oversupply of lawyers, and how that oversupply has been caused by bogus employment and income/salary statistics used by most law schools to induce applicants to apply to law school. Also, we are concerned with how the legal establishment is complicit in this "law school scam."

Esq. Never– One law school graduate's attempt to find a fulfilling career in spite of his legal education.

These blogs also provide links to other blogs devoted to slamming law schools and the legal profession.

Mississippi’s law schools need to educate applicants about the realities of the difficult job market. My non-scientific polling of current law students indicates that law schools do not warn students about the weak job market until after students are enrolled and are finding it difficult to find clerkships and permanent jobs. Of course, by that point the train has left the station. 

I agree with the comments by William Henderson, a professor at the Indiana University School of Law. Harrison states that “all [students] believe they are going to be in the top 10% of their class, and they have this vision of the profession that doesn’t exist. And law schools don’t try to dispel those myths to potential applicants.”

The realities are different. Everyone who gets into law school is intelligent—at least on some level. [I concede that many are idiots on other levels, but that is a discussion for another day.] But over 90% of those who start law school will not finish in the top 10% of their class. The reason that it’s over 90% is that people will quit along the way. For instance, if you start with a class of 200 and 50 quit before graduation, there are 15 people who finish in the top 10%—not 20.

A handful of students starting Mississippi law schools will get a job at a big firm with a starting salary north of $80,000. And some people who don’t measure happiness by the amount of their salary consider the big-firm grads the losers in the class, due to the difficulties in having a balanced happy life in big law.  Other grads will be scrambling for jobs making less—sometimes far less. Often these individuals end up bitter because they are not making more money, which means that they are unhappy and do a bad job at work.

At the end of the day, most legal industry jobs end up like most jobs. As in other industries, the profession is filled with people who are unhappy and feel like they are underpaid.  But that is not what people expect to happen when they decide to go to law school.

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According to the National Law Journal, the average hourly rate for U.S. law firms rose 2.5% in 2009 to $372. The average rate is $457 for partners and $282 for associates.

Four law firms reported average partner billing rates of $1000 or more. The article quoted someone as saying that those rates typically came with specialized practices and close relationships with high-ranking government officials.

From viewing the list of firms that responded to the survey, it appears that the survey is reflective of average rates at the nation's largest firms. It does not appear to be a comprehensive survey that truly reflects the average rate among all attorneys in the U.S.

The highest rates in Mississippi that I am aware of are in the $500 per hour range. But most lawyers in the state charge significantly less.  

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The National Law Journal released its issue ranking the largest 250 law firms in the nation. Overall, the number of lawyers working at the nation’s largest firms decreased by 5,259. This is bad news for everyone in the legal industry. For law students, it's worse than bad.

Firms deferred the start date for 2,784 associates, which was 42% of the would-be starting class.

The nation’s largest law firm is Baker & McKenzie, with 3,949 attorneys.

Firms in the rankings with Mississippi offices, their national rank, total number of attorneys and number in Mississippi are:

             Law Firm               Rank       Total Attorneys     Attorneys in MS

• Baker Donelson:        73                 562                            71
• Bradley Arant:           126                363                            21
• Phelps Dunbar:         156                267                            58
• Adams and Reese:    161                257                           31
• Balch & Bingham:      163                252                           38
• Burr & Forman:          176                233                           6
• McGlinchey Stafford:  237               176                            11

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The Saturday Clarion-Ledger was legal themed with three articles covering legal issues. There was this article about Big Law paying would-be associates to perform public interest work instead of starting work at the firm, which doesn't have work for new associates due to the recession. These are great programs for several reasons. Money starved non-profits and public policy firms get free legal work. The new lawyers get valuable experience and exposure to the poor and and mistreated that most would not otherwise obtain. The bad news is that this is a terrible sign for the legal industry in general and current law students in particular. For the legal industry it indicates how little work big firms have. For law students, if Big Law is paying new lawyers to work somewhere else, then the job market must be terrible.   

Another article was this article about this week's Mississippi Court of Appeals decision in which the Court ruled that a railroad did not have standing to challenge an adoption by a former employee who sued the company.

The longest article was this Jerry Mitchell article about the Mississippi Supreme Court reversing Judge DeLaughter's grant of summary judgment for attorneys Gene Tullos and Crymes Pittman. The article contained this statement:

Since that plea, the high court has upheld nearly all of DeLaughter's rulings in criminal and civil cases.

That did not seem right when I read the article. It did not seem right to Tom Freeland either, who wrote this post about it at NMC and commented:

Since the first of August, the Mississippi Supreme Court has published opinions in four cases appealed from rulings by Judge DeLaughter.  All four were reversed; it’s a small sample size, but the court hasn’t upheld a single one of DeLaughter’s rulings since the plea.   His rulings have faired better in the Court of Appeals– three affirmances, two in civil cases (one of the affirmances was a pro se criminal appeal).  Going back to when the cloud first formed over his head in December of 2007, there were two reversals and six affirmances by the Supreme Court, which is more what you’d expect.

I’m having trouble counting four reversals, no affirmances as “upholding nearly all of DeLaughter’s rulings…” since the plea.

Agreed. I try to read the Court's hand-down decisions every Thursday. My general impression, without going back and doing the research, was that Judge DeLaughter was usually affirmed before the judicial bribery scandal and has been usually reversed since the scandal. Perhaps that is just a coincidence. But perhaps it is not. Overnight, DeLaughter went from a very respected judge to a judge whose every ruling is suspect. It's only natural for the Court to take a harder look at DeLaughter's decisions.

As for the underlying Tullos case, it should be kept in mind that the Court's reversal was on procedural grounds and did not address the merits of the case. Both Tullos and Pittman commented for the Clarion-Ledger article and appear to have solid defenses. I think it was smart for Tullos and Pittman to comment to Mitchell to get their side of the story out to the public. I do not understand why more people who are parties in high profile cases do not get their story into to public domain.

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I ask people all the time if they read the Dilbert comic strip. Invariably the answer is no. I love Dilbert. Although the strip is set in a corporate office setting, lawyers who have worked in big firms will get many of the jokes because big firms operate like big corporations. After all, who likes an unproductive meeting more than a big law firm? And don't all big firms have dead weight partners like the pointy hair boss in Dilbert? But Dilbert is not just for defense lawyers. Both plaintiff and defense lawyers can learn something by reading Dilbert. Here is a link to the Dilbert website, where you can review the strips. The strip from Sunday September 6, 2009 is a great example of what I love about Dilbert.

The fact that individuals in big corporations do not want to make decisions is a recurring theme in Dilbert. And it's often true. How many defense lawyers have waited months to get a decision from their client? The bigger the decision, the less one person wants to make it. As a general rule, plaintiff lawyers have no concept that this is how insurance companies and other corporations operate. Plaintiff lawyers assume that the defense lawyer can make one phone call and get a million dollars in settlement authority for a mediation tomorrow. That's not how it works, even in cases with clear liability and large damages.

In big corporations one person does not want to be held accountable for making a big decision--like paying a lot of the company's money to settle the case. They don't want to have to defend the decision when someone up the food chain questions it. In big cases this can lead to a couple of things. First, delay. With delay maybe the case is assigned to someone else or an unlikely defense is spotted. Regardless, for many individuals managing litigation in a big corporation the pros of delay far outweigh the cons.

A second thing that indecision leads to is group think. Many times it takes a meeting to make a big decision. That way, no one person can be held responsible for the decision. Who should participate in the meeting? As many people as possible, since no one who was in the meeting can criticize the decision. But it takes time to schedule the meeting, leading to more delay. Delay and group think are big reasons that trial dates drive settlements. Sometimes everyone on the defense side will know that the company is going to settle the case, but the process has to run its course. With a trial date approaching, the decision can't be delayed any longer.

The fact that defense costs and expenses can reach six figures usually does not outweigh the factors that cause delay. Defense costs are a cost of doing business. They are bills that have to be paid. For corporations with a lot of litigation, one case will not significantly affect the yearly defense costs. One reason for this is that many defense lawyers are going to bill their eight hours every day. If the company settles this case, then the lawyer is just going to work a different file. Corporations don't like to talk about this, but I think they know it.

In contrast to defense costs, a settlement is a voluntary payment to a plaintiff. Settlements do not have to be made. High defense costs can be blamed on the plaintiff lawyer for filing a frivolous case, the defense lawyer for over-billing, or even the judge for making bad rulings. Paying too much to settle a case, however, is more likely to be blamed on the person in the company who made the decision.   

 Ironically, the stars in the corporate world are the employees who are willing to speak out and make big decisions. You would think that all the employees would recognize this fact and act accordingly, but they don't. Most act like scared sheep. In just a few panes, Dilbert captures the essence of these principles.