It was the wrong thread

[Tyrone Slothrop]

Originally posted by Penske_Account
I see your point. Honestly, litigation is as foreign to me as marine biology, but on the deal side, the supermajority of the profession that maintains stuck in the mud in the billable construct as contrasted with a percentage of the deal take (a la the bankers and brokers) are absolutely economically retarded (at least on a markets basis).

If I were going to hire a roofer, and he said, "I'll tell you what -- I'll fix your roof, but instead of paying me by the hour, why don't you give me an equity share in your house," I think I'd find another roofer.

No offense.

OTOH, I might go for a flat fee.

[sebastian_dangerfield]

Originally posted by Penske_Account
Good read.

Translation: the law firm economic model is fucking stupid (read: lawyers understandings of economic and markets is for shite).

This is amusing:

"So my answer to question number two is that the greatest vulnerability of the legal industry today is a failure to make information more accessible to clients, to drive models based on value and efficiency. The present system is leading to unhappy lawyers and unhappy clients. The center will not hold."

He does understand that litigation is (a) not complex, and that (b) lawyers who do it should, in an efficient market, be paid like accountants. It's the hiding of information from clients and the shrouding of what should be a simple process in layers of confusing busywork and arcane adminsitrative hurdles that has sustained litigators' undeservedly high salaries.

De-equitization is taking care of the business model quietly. Firms are moving to pyramids of hyper-rainmakers at the top and layers of dissatisfied "everybody elses" underneath.

But as long as a few older partners think they can keep the system going through to their reitirement, they'll maintain every inefficiency they can.

Litigators "soft steal" from their clients through the system. It's a variety of the same fraudulent sale of canned models consultants use to rape companies.

[sebastian_dangerfield]

Originally posted by Penske_Account
I see your point. Honestly, litigation is as foreign to me as marine biology, but on the deal side, the supermajority of the profession that maintains stuck in the mud in the billable construct as contrasted with a percentage of the deal take (a la the bankers and brokers) are absolutely economically retarded (at least on a markets basis).

Contingency's always better. But its betting long term by sacrificing in the short. Explaining then wisdom of taking that risk to the average grey suited monkey - particularly after so many who did take that risk got burned in the tech bubble - is like trying to teach Greek to an infant.

We're taught risk is wrong. People blame lawyers' golden handcuffs on the fact that they spend too much, putting themselves into a position where they can't do anything else. I don't think that's the whole picture. There's a mindfuck that law puts on people. It makes them so afraid of negative consequences that they're blind to upsides.

Why do you think any suggestion that a person take a wild chance is met with skepticism by so many on these boards? I don't know where the cancer starts, but once you've practiced for a few years, if you're no careful, you get this scared mindset about you.

I don't mean this to be argumentative. Its just an observation on a mental illness I think all lawyers need to gird against. It nearly ruined my brain and if articulating it can help someone, that's all I intend here.

[Hank Chinaski]

Originally posted by sebastian_dangerfield
This is amusing:

"So my answer to question number two is that the greatest vulnerability of the legal industry today is a failure to make information more accessible to clients, to drive models based on value and efficiency. The present system is leading to unhappy lawyers and unhappy clients. The center will not hold."

He does understand that litigation is (a) not complex, and that (b) lawyers who do it should, in an efficient market, be paid like accountants. It's the hiding of information from clients and the shrouding of what should be a simple process in layers of confusing busywork and arcane adminsitrative hurdles that has sustained litigators' undeservedly high salaries.

De-equitization is taking care of the business model quietly. Firms are moving to pyramids of hyper-rainmakers at the top and layers of dissatisfied "everybody elses" underneath.

But as long as a few older partners think they can keep the system going through to their reitirement, they'll maintain every inefficiency they can.

Litigators "soft steal" from their clients through the system. It's a variety of the same fraudulent sale of canned models consultants use to rape companies.

My patent prosecution clients are mostly big. when I was biglaw some gave me litigation, but most of them have always sent lit to the Big National Firms. I get smaller company lit. which is fine.

But the BNFs take straight forward cases and confuse the shit out of them. I don't know if it is too churn the file, or because they believe Patent lit is complex so they have to make a simple story confused and complicated. either way I've seen some very good cases become very fucked up in the hands of the A-teams of our profession.

And the weird thing is the in-house lawyers who pick these billing mills, and who approve the monthly invoices, can't get their companies to pay for anything for thems. Like this summer, there is a conferecne on Mackinac Island that is really informative, but the main benefit is it's on Mackinac Island and you stay at the Grand Hotel. It would cost the companies about $2500 to send their in-house lawyers there, but they budget cut it out.

So here are these in-house guys seeing invoices each month between now and July for 150k per month or so, and the invoices having "Conference w opposing counsel about time/location for Jones deposition $3260."

I mean month after month approving your company paying for stuff that is on its face horse shit, and meanwhile knowing your compnay won't pay a fraction of that to send you to something rewarding- that would get discouraging. I guess it is the old story of when you lose you want to be able to tell the President you hired the best. Corporate America needs to wake up.

[Hank Chinaski]

Originally posted by sebastian_dangerfield
Contingency's always better. But its betting long term by sacrificing in the short. Explaining then wisdom of taking that risk to the average grey suited monkey - particularly after so many who did take that risk got burned in the tech bubble - is like trying to teach Greek to an infant.

We're taught risk is wrong. People blame lawyers' golden handcuffs on the fact that they spend too much, putting themselves into a position where they can't do anything else. I don't think that's the whole picture. There's a mindfuck that law puts on people. It makes them so afraid of negative consequences that they're blind to upsides.

Why do you think any suggestion that a person take a wild chance is met with skepticism by so many on these boards? I don't know where the cancer starts, but once you've practiced for a few years, if you're no careful, you get this scared mindset about you.

I don't mean this to be argumentative. Its just an observation on a mental illness I think all lawyers need to gird against. It nearly ruined my brain and if articulating it can help someone, that's all I intend here.

You know there are lawyers who only do contigency right?

we started a boutique awhile ago. At first we looked at several contingency cases. Our goal was to find one that we could move along, and that wouldn't take up too much time so we could do enough straight work to ensure cash inflow while we make to ring the register on the contingency.

We were too picky and turned them all down.

Just last year I had a small client get to where they couldn't pay anymore, and the case was set for trial. I offered them contingency and we struck it. Compared to lots of patent cases ours was small, but that check was still really nice. Now I want to always have a few cases kicking. The best part is that you can pick a small Plaintiff, which really limits how much churning D can do.

"You want to depose all of P? Okay- this one guy is it. Want to see all of his records? it's this box and then that one over there."

you can keep it small and under control. Plus, you can imagine how easy it is to keep your case focused when you aren't billing for what you do.

[Tyrone Slothrop]

Originally posted by Hank Chinaski
You know there are lawyers who only do contigency right?

we started a boutique awhile ago. At first we looked at several contingency cases. Our goal was to find one that we could move along, and that wouldn't take up too much time so we could do enough straight work to ensure cash inflow while we make to ring the register on the contingency.

We were too picky and turned them all down.

Just last year I had a small client get to where they couldn't pay anymore, and the case was set for trial. I offered them contingency and we struck it. Compared to lots of patent cases ours was small, but that check was still really nice. Now I want to always have a few cases kicking. The best part is that you can pick a small Plaintiff, which really limits how much churning D can do.

"You want to depose all of P? Okay- this one guy is it. Want to see all of his records? it's this box and then that one over there."

you can keep it small and under control. Plus, you can imagine how easy it is to keep your case focused when you aren't billing for what you do.

My neighbor was at a national law firm, doing work for a client which then offered them a patent case on contingency. They turned it down. So he left the firm and took it himself. Now he lives in a nice house and doesn't have to work very hard. Nice life.

[sebastian_dangerfield]

Originally posted by Hank Chinaski
My patent prosecution clients are mostly big. when I was biglaw some gave me litigation, but most of them have always sent lit to the Big National Firms. I get smaller company lit. which is fine.

But the BNFs take straight forward cases and confuse the shit out of them. I don't know if it is too churn the file, or because they believe Patent lit is complex so they have to make a simple story confused and complicated. either way I've seen some very good cases become very fucked up in the hands of the A-teams of our profession.

And the weird thing is the in-house lawyers who pick these billing mills, and who approve the monthly invoices, can't get their companies to pay for anything for thems. Like this summer, there is a conferecne on Mackinac Island that is really informative, but the main benefit is it's on Mackinac Island and you stay at the Grand Hotel. It would cost the companies about $2500 to send their in-house lawyers there, but they budget cut it out.

So here are these in-house guys seeing invoices each month between now and July for 150k per month or so, and the invoices having "Conference w opposing counsel about time/location for Jones deposition $3260."

I mean month after month approving your company paying for stuff that is on its face horse shit, and meanwhile knowing your compnay won't pay a fraction of that to send you to something rewarding- that would get discouraging. I guess it is the old story of when you lose you want to be able to tell the President you hired the best. Corporate America needs to wake up.

Its a self-perpetuating business to keep fat white men in German sedans. Think about it. There are only so many slots that would honestly pay $200k a year or more. There are way more fat lazy white men out there than those slots, so we create more for them by bloating businesses like accounting and law into hypercomplex and time consuming behemoths. Billing for taskwork ("motion" instead of "progression") becomes the aim.

I've done contingency and billable. Contingency's better, but its problem is cash flow. To fund the big cases you have to take a lot of smaller, very unethical cases from "referral counsel" and basically lie about a clients' injuries (economic and physical) to keep the doors open (a good whore is incredibly expensive). You also have to make allegations you know aren't true. I've filed about 40 complaints in my life regarding contract claims. In every single one, we'd find a way to tag on some utterly frivolous fraud claim to try to force settlement. That played right into BNF's business model.

Litigation should not be a business. We've destroyed the old social code that stignatized it as something that should be, as Bubba described abortion, "safe, legal and rare." Life'll kill ya. That you're hurt and can find an expert who can blame it on somebody with an insurance policy does not mean its right to do so. Nor is doing so vindicated by the fact that your lawyer bullshitted a jury into buying your claim, or scared a defendant into settling. On the flip side, I understand the corporations aren't any better in some of their dealings. That's a sad commentary on our economy. I guess litigation's just the most naked proof of the old axiom that nobody ever got rich honestly.

It wouldn't be so bad, really, if both sides would just admit how morally and ethically flawed they are. I used to admit to opponents that I was filing frivolous leverage claims. I'd say "It's business. What do you want?" Why not admit you're a cur? Makes life a lot easier.

[Penske_Account]

Originally posted by Tyrone Slothrop
If I were going to hire a roofer, and he said, "I'll tell you what -- I'll fix your roof, but instead of paying me by the hour, why don't you give me an equity share in your house," I think I'd find another roofer.

No offense.

OTOH, I might go for a flat fee.

Maybe the roof example plays to litigation where the percentage of a tangible amount is hard to ascertain, but as I stated, I don't know anything about litigation (other than what I remember from LA Law or Ally McBeal, which ain't much), but with deals there is both a tangible number with high relativity and precedent for a percentage fee.

Have you ever worked on a financing deal where there was a broker and/or a banker? Have you seen what they do to score between 1-6%, where in comparison the lawyers do about 50 time more work and maybe end up with fees that equal about .1-.25%.

[Penske_Account]

Originally posted by sebastian_dangerfield
Its a self-perpetuating business to keep fat white men in German sedans. Think about it. There are only so many slots that would honestly pay $200k a year or more. There are way more fat lazy white men out there than those slots, so we create more for them by bloating businesses like accounting and law into hypercomplex and time consuming behemoths. Billing for taskwork ("motion" instead of "progression") becomes the aim.

2. I hate these douchebags.

[Tyrone Slothrop]

Originally posted by Penske_Account
Maybe the roof example plays to litigation where the percentage of a tangible amount is hard to ascertain, but as I stated, I don't know anything about litigation (other than what I remember from LA Law or Ally McBeal, which ain't much), but with deals there is both a tangible number with high relativity and precedent for a percentage fee.

Have you ever worked on a financing deal where there was a broker and/or a banker? Have you seen what they do to score between 1-6%, where in comparison the lawyers do about 50 time more work and maybe end up with fees that equal about .1-.25%.

The next financing deal I see up close will be the first, thank G*d. But I have seen many corporate lawyers bitch about how they should get the bankers' fees -- and yet apparently their clients don't think they're worth it, alas.

[Penske_Account]

Originally posted by Tyrone Slothrop
The next financing deal I see up close will be the first, thank G*d. But I have seen many corporate lawyers bitch about how they should get the bankers' fees -- and yet apparently their clients don't think they're worth it, alas.

Because they are too chickenshit risk averse to restructure their pricing model to reflect market value.

[Tyrone Slothrop]

Originally posted by Penske_Account
Because they are too chickenshit risk averse to restructure their pricing model to reflect market value.

I think I should sell my house for $2,500,000. That's much, much more than comparable houses for sale in my neighborhood,* but what the hell? I'll go put a sign out, and I'll let you know when the offers come pouring in.


* But mine has the wheels covered over.

[sebastian_dangerfield]

Originally posted by Penske_Account
Because they are too chickenshit risk averse to restructure their pricing model to reflect market value.

How do you get around the argument that banking's not a traditionally piecework business like law, and that, in the same way you wouldn't pay an accountant with an equity slice, why would you do so for a lawyer?

[sebastian_dangerfield]

Originally posted by Tyrone Slothrop
If I were going to hire a roofer, and he said, "I'll tell you what -- I'll fix your roof, but instead of paying me by the hour, why don't you give me an equity share in your house," I think I'd find another roofer.

No offense.

OTOH, I might go for a flat fee.

Your analogy applies only in the context of litigation in which you represent the defendant. In a plaintiff's case or a deal, Penske's right - the only thing - from the lawyer's side - precluding an equity compensation structure is the lawyer's risk aversion.

I used to work cases with blended fee structures a fair amount. We'd get a limited hourly plus a kicker based on our recovery in the case. It was sometimes the only way for a small company to be able to pay for serious litigation.

[Penske_Account]

Originally posted by Tyrone Slothrop
I think I should sell my house for $2,500,000. That's much, much more than comparable houses for sale in my neighborhood,* but what the hell? I'll go put a sign out, and I'll let you know when the offers come pouring in.


* But mine has the wheels covered over.

good idea, when you talk to the listing agent, let them know you will be paying them $350/hour, subject to itemised statements that you will review. Let me know how that discussion goes.