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Don't Confuse Hourly Fees With Knowledge and Skill
On July 17, 1999, State Bar President-elect Gary Bakke was
quoted in the Wisconsin State Journal as saying that if
the State of Wisconsin had hired a $75 an hour lawyer for the
tobacco lawsuit, all the state would have received is a bill.
The reader was left with the impression that a $75 an hour lawyer
lacks the knowledge and skill that a more expensive lawyer possesses.
As a small town lawyer whose hourly fee is significantly lower
than my big city counterparts, I felt as if I had been slapped
in the face by Mr. Bakke and the State Bar.
I am proud of the fact that my hourly fee is relatively low.
It allows me to serve factory workers, farmers, disabled veterans,
and others who otherwise wouldn't be able to afford legal
representation. My reward is not a fancy home or car. My reward
is the $5 miniature Christmas tree I received from a battered
woman whom I had helped to leave her husband. My secretary ran
into her at the post office and asked her if she had read my
letter - the one in which I told her I was writing off her
bill. She said no, she hadn't opened it yet, as letters
from law offices always made her nervous. When my secretary summarized
the contents of it for her, she started to cry with gratitude.
A few weeks later, she presented me with the Christmas tree.
So please, Mr. Bakke, don't confuse hourly fees with
knowledge and skill. I find it ironic that at a time when the
State Bar is running full page ads promoting Team Pro Bono and
the Equal Justice Coalition, the president-elect is publicly
insulting those of us who are trying to make legal representation
more accessible. To those law firms that represented the State
of Wisconsin in the tobacco lawsuit, I offer my kudos for a job
well done. However, in the end, we all have the same diplomas
and certificates of bar admission on our walls.
Nancy A. Thome
Baraboo
I appreciate your feedback. Apathy is the worst enemy of our
association. Thoughtful criticism of me or other Bar leaders
is appropriate and will serve to strengthen us all in the long
run.
If I inadvertently insulted you or any attorney who labors
day in and day out to serve the real needs of real people at
a fair price, I am truly sorry and I apologize. Such lawyers
are the backbone of the Bar. Their efforts and dedication are
a true mark of professionalism, and I truly respect and admire
their accomplishments. For more than 30 years I too have represented
primarily individuals who pay their legal fees from their own
pocket. I really do understand the importance and value of reasonable
fees.
Finally, please allow me to explain the thought that I intended
to convey to the Wisconsin State Journal reporter, and
the context in which it was done. I was asked to provide the
Bar's perspective for an article about the tobacco fees.
The specific topic was whether the members of the Bar association
thought that $3,000 per hour was a reasonable fee. I have heard
enough comments from members to know that we are divided on this
issue. Some feel strongly that the fee request by the plaintiff's
attorneys has tarnished the reputation of us all and has contributed
to the decline in public confidence in lawyers and the legal
system. Others feel equally strongly that the plaintiff's
lawyers had a valid contract to undertake a very large risk and
are incensed that the State of Wisconsin would fail to honor
its agreement. With that wide divergence of opinion, I declined
to comment on behalf of the membership, but I did agree to provide
my own personal comments.
Is $3,000 per hour reasonable? That's the wrong question.
Clearly the parties contracted for a fee that was not to be calculated
by the hour. The contract was value based. Frequently, a contingent
fee produces a fee that is unreasonable, too high or too low,
if viewed as hourly compensation. If the plaintiff had spent
four years in discovery, tried the case for 10 months and prosecuted
an appeal, only to ultimately lose and recover nothing, would
the economic loss the attorneys incurred be reasonable? Not if
measured by time and effort, but obviously reasonable if contracted
on a value basis.
Unlike many plaintiffs, the State of Wisconsin had some real
choices. It could have assigned this task to the Attorney General
staff. If there was insufficient existing staff, it could have
funded new positions to handle this case. Another option would
have been to hire private attorneys on an hourly basis. It could
have offered $75 per hour to those attorneys. The State did not
opt for any of those alternatives. Presumably it was not willing
to take the risk that it would end up with a large bill for attorneys'
fees and nothing to show for it. Remember that this suit was
a long shot and that plaintiffs had a very poor track record
in prior suits against the tobacco industry. Facing the prospect
of very expensive and protracted litigation, it chose to contract
that risk, including the risk of costs, to private attorneys.
No one questioned this arrangement when it was made and no one
would have complained about the unfairness of the agreement if
the case had been lost. Based upon value, more than $5 billion
to the State, the fee is reasonable.
In our society we frequently choose to pay based upon value,
not time. Michael Jordan, Oprah Winfrey, corporate CEOs, financial
risk takers - all are paid based upon their value or at
least a perception of value. In order to evaluate any value-based
or contingent fee, we have to first ask the right question. The
question is whether or not value was provided, not how much time
it took.
I am not a personal injury lawyer and do no contingent fee
work. Yet I can clearly see the magic of a contingent fee in
the appropriate cases. In almost all situations, the client is
best served when the hourly equivalent is high. An early favorable
settlement results in handsome compensation and a happy client.
Countless hours in preparation, trial, and appeal may bring down
the hourly rate, but it does so at the expense of the clients'
interests.
On balance, Reporter Brinkman's article fairly presented
both sides of this issue. Many of the thoughts I expressed to
him were included in the article, but attributed to others. To
the extent that I was not successful in communicating my views,
the failure was not due to bad motives, but to lack of skill.
Again, thank you for writing. I have learned from your comments.
Gary L. Bakke
State Bar president-elect
New Richmond
Hurray for Plain Language Initiative
I loved Ms. Ray's article, "How
to Use Legalese." I am a nonlawyer working in the General
Counsel's office at a federal government agency who happens
to be working on the President's "plain language"
initiative. One of my colleagues had your magazine, and I happened
to be flipping through it when I came across this article. Believe
me, I've had my hands full trying to convince lawyers about
the virtues of simpler language.
If you don't know already, the Vice President's
National Partnership
for Reinventing Government (NPR) is leading the effort to
get the federal government to use plain language (there was a
Presidential Memorandum last June).
Name Withheld by Request
Washington, D.C.
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