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June 06, 2007

Is Your Firm Telling Your Client The Truth?

Lots if not most of these cases my firm defends waste money, time and resources; they clog up the court system, they are all about the lawyers, and they make business clients (especially non-Americans) think lawyers, judges and the American court system is uncaring, anti-business, self-indulgent, inefficient and flat-out nuts. Lawyers keeping the client in the dark is much to blame.

A premise of this blog (see our first post in 2005) is that lawyers regularly lie to their clients. They lie to even great clients. WAC? believes that the practice of law generally has become disturbingly and cavalierly "lawyer-oriented", rather than "about clients". We think that, increasingly, sophisticated clients, who are often just as savvy if not more savvy about their cases and deals than the lawyers who serve them, have become the equipment in an expensive and wasteful game played by lawyers.

Rather than the word "lie", we could use the more PC or subtle expressions of fudge the truth, fail to disclose or obfuscate. But why use softer terms? Fact: we lawyers have some of the strongest legal, fiduciary and professional duties--in common law, statute and public policy--not only to tell our clients the truth but go out of our way to explain to clients actual events as they happen and what we really think about merits of litigation or transaction on a real-time and ongoing basis. My threshold question is that if I think my client or its general counsel would want to know about an event, or even know merely what I am thinking about (from "good" to "bad" observations and analysis of a project's turns and progress), I tell them. If I don't tell a client what happens and what I think about it, I am lying. It's a hard standard, but it is ours as lawyers.

What do lawyers hide from their clients or lie about? In litigation, it's 4 main things: (1) day-to-day developments which are "bad", not perfect or the client just might not really want to hear (call them

tough phone calls), (2) actual settlement posture (and even actual settlement offers), (3) the general direction, merits and legal terrain of a case which lulls the busy client into thinking everything is just fine or at least not hopeless (in these instances, non-disclosure often occurs because of inadequate research coupled with "drinking the Kool-Aid" about the merits and righteousness of your case) and (4) outright embarrassing screw-ups by outside counsel which should have never happened (in my view, mistakes are the chief offender).

Why do the lies or non-disclosures occur? Three reasons: Greed, where the law firm, perhaps in an engagement involving a one-time-only case, or one-night stand, wants to keep the matter going to make money; Incompetence (of the "clueless"/we-don't-really-know-the-law-or-the-procedures variety); and Screw-ups (again, the chief offender).

How do I know this? It's based on inferences I've drawn and am more than reasonably sure about (say 98% certainty in each instance) in cases and transactions over the past 20 years. And over the past two or three years, I've seen opposing counsel from great, good and mediocre firms apparently go out of their way consistently and painstakingly to do "damage control" to hide their client's real prospects of failing or succeeding in the project, or hide outright screw-ups (some understandable, some not). It has been especially true (maybe 100%) in the instances where my firm has defended in cases brought by firms with a contingency fee arrangement with their plaintiff-client, a medieval practice (often defended on basis of "access to courts", etc.) where the lawyer is king, and clients are treated like chattel and kept in the dark. Lots of these cases my firm defends waste money, time and resources; they clog up the court system, they are all about the lawyers, and they make business clients (especially non-Americans) think lawyers, judges and the whole system is uncaring, anti-business, inefficient and flat-out nuts. And lawyers keeping the client in the dark is much to blame. Clients would discontinue or settle them if they only knew the truth.

The solution? Well, we've got two notions. First, since practicing law is hard, do it the right way, with good research, and thoughtful ongoing case assessment, and keep the client informed of what you are thinking at least once a week.

Second, use this test: Conduct your discussions with opposing counsel as if your client were listening.

Posted by JD Hull at June 6, 2007 06:29 PM

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