Commentary -- Lawyers vs. Lawyers

I am usually sympathetic at root to the complaints of the insurance industry and risk managers over what is perceived as excessive litigation: too many lawsuits are filed on too many tenuous theories, with the resulting costs being spread throughout the economy. (Just today, to take a single example, a U.S. District Court judge dismissed yet another class action suit against McDonald's over the restaurant's claimed contributions to its customers' obesity. The plaintiff's attorneys insist more suits will be forthcoming.) Nevertheless, this editorial by Paul Winston in Business Insurance magazine strikes me as taking an unreasonable position.

Winston suggests a simple cause for the increase in litigation and litigation costs: too many lawyers.

Think about it. For many years, lawyers were considered one of the most desirable professions in our society. There was great prestige in having a child attend law school and become an attorney (unlike, say, an English major). Millions of law degrees were conferred and millions of lawyers found themselves looking for billable hours and contingency fees.

While the complex workings of society, business and government offer plenty of work for many lawyers, others have to work hard to drum up business and make a living. It's no different for butchers, bakers or candlestick makers. If there is not enough business to be had, they must hustle to make some or go hungry.

Fair enough, as far as it goes: there really are an astonishing number of attorneys out there, and new ones are entering the market at a phenomenal rate. In the two decades since I entered the profession, California alone has admitted over 100,000 new attorneys. Even allowing for attrition in the existing ranks of the profession, and the fact that a significant portion of that total reprents attorneys who do not handle litigation, that is quite a crowd of advocates.

Winston's proposed solution -- as a means to ""thin the legal herd a bit" -- is to encourage lawyers to spend more time suing other lawyers!

If the threat of litigation and the resulting high cost of coverage is enough to drive doctors away from risky pursuits, if not medicine altogether, what would it take to similarly make lawyering less attractive? A dose of their own medicine is what.

With the proliferation of so many lawsuits, surely there is a willing body of disgruntled plaintiffs willing and eager to sue their lawyers for a bad outcome, or exorbitant billings. I'm sure there's even the potential for several class action lawsuits over current legal practices.

With enough of these lawsuits, insurers are bound to jack up the cost of lawyers' professional liability insurance. This would make attorneys think twice about some of their more speculative endeavors, and drive others to pursue less costly legal work, or new professions entirely.

Very clever, very clever indeed. Unfortunately, this solution is no solution at all. For starters, professional liability premiums for attorneys have already gone through the roof, as have premiums for most other professionals. As with any other business, attorneys can simply raise their rates to absorb this new cost.

Moreover, attorneys have not created today's hyper-expansive liabilities on their own: they have had the able assistance of courts and legislatures that have combined to create opportunity after opportunity for lawsuits. The most innocent error can be deemed an "unfair practice" or an offense to some "right" or other and lead inevitably to the courthouse door. The answer to every perceived ill -- from business practices to social behavior to our relations with our pets -- is a new statute or a new precedent. Lawyers may take a hand in creating some of these new opportunities to sue, but more often they simply capitalize on the opportunities created for them by others. One man's excessive litigation is another man's healthy abundance of legal remedies.

Sadly there is no simple answer or magic bullet to be had. Unless and until there is a fundamental shift in our nation's public philosophy -- away from the courts as cure-alls and toward the recognition that not every "wrong" warrants legal action -- it is unfair to place the blame on the legal profession. While it often makes sense to fight fire with more fire, fighting litigation with more litigation will only exacerbate the problem it seeks to solve.

[These opinions have been cross-posted to the author's personal/political/culture weblog,A Fool in the Forest.]

Comments

[Dave Stratton]

Also, the growth of insurance products and the efforts to sell those products also does something to encourage litigation. It's a real eye-opener to see how the direction of a case abruptly changes when it turns out that the available insurance coverage is dramatically less than originally thought.

[George Wallace]

I agree, Dave. Expansive liability is a lot like quantum physics, where the very act of observing affects the outcome. As insurers either try to fill a perceived need for more coverage or try to pull coverage back (as in the ADA cases blogged earlier) it has an effect on which claims attorneys will assert. No one likes to chase after an empty judgment that can't be collected.

I suppose by the logic of the original editorial, the elimination of liability insurance altogether might operate to discourage litigation, too. I don't think that idea would work any better than the Let's-Sue-More-Lawyers proposal.