Run-of-the-Mill Justice is the title of an article by Stanford Law professor Nora Freeman Engstrom published in a recent issue of the Georgetown Journal of Legal Ethics. Here is the article. The Article claims to represent the first ever careful study of settlement mill law firms. The article defines “settlement mills” as:

 “high-volume personal injury law practices that aggressively advertise and mass produce the resolution of claims, typically with little client interaction and without initiating lawsuits, much less taking claims to trial.”

The basis for the article included documentary evidence and fifty interviews with forty-nine current or former settlement mill attorneys or employees. The article is a must read for anyone in private practice or interested in the practice of law.

Some of the points that I found most interesting were:

  • conventional plaintiff’s firms expand significant resources screening cases and almost universally decline more cases than they accept
  • settlement mills usually sign a case if there is insurance involved
  • clients served by settlement mills are comparatively uneducated and underprivileged and disproportionately belong to historically disadvantaged ethnic and racial minority groups
  • for most lawyers, a good reputation is the cornerstone of financial success
  • contingency fees have an advantage over other legal payment schemes because they (imperfectly) align the client and attorney’s financial interests
  • settlement mills settle cases with only a few hours of employee time and almost no attorney time
  • the “grim outlook” for plaintiffs at trial counsels in favor of settlement of cases
  • when adjusted for inflation, the median jury trial tort award decreased 56.3% between 1992 and 2001 [WOW!]
  •  90.5% of Texas personal injury lawyers agreed that juries were awarding less in cases with comparable injuries
  • settlement mills rarely file lawsuits and almost never engage in formal discovery
  • settlement mill negotiators and insurance adjusters come to a common understanding of case values
  • settlement mills are terrible for individuals with a meritorious case with large damages
  • insurance companies like settlement mills because they settle big cases at a discount and settle other cases fast.

Atlanta lawyer and blogger Ken Shigley compared settlement mills to kudzu:

Such law firms are able to operate in this manner only because federal courts bar tough regulation of legal advertising, and their operations operate "under the radar" because they almost never file their cases in courts. They are the kudzu of the legal system, operating in a manner generally contrary to the interest of their clients and the public, and just as hard as kudzu to limit.

The statistics regarding the decrease in jury trial awards is amazing. I suspect that the trend has continued since 2001. The suspicion and disdain that many jurors have for plaintiffs seems to be growing in our tort reform culture bought and paid for by the U.S. Chamber.