Co-contributor Mike’s relative Tom Basehart has loaded us up with some more year-of-the-end articles having some interesting discussions on attorney’s fees, lawyer compensation, and impact of state court budget cuts. So, we share some of the highlights with you now.
Tort Reform: Losers Pay, Capped Damages, and Other Reform Updates.
As reported in the December 10, 2011 edition of The Economist, loser-pays proposals have only really caught on in foreign countries such as England, Canada, and Germany, mainly because of the existence of fairly reasonable legal insurance after an alleged loss but before suit is filed. For example, the much publicized losers pay legislation enacted in Texas only applies to suits “that have no basis in law or in fact,” a frivolousness standard that probably does not apply to a vast majority of cases. (BLOG NOTE–The only real comparable “legal insurance” covering an attorney’s fees loss that we know of is underwritten through Sonoma Risk, and only covers contract disputes. Use our search feature, input “Sonoma Risk” to find out about this product.) Capping damages did cause medical-malpractice claims to fall sharply in number and limit the amount of any awards. However, overall Medicare costs, a key indicator of medical costs generally, have not fallen, which shows why health care costs are no cheaper. Giving jury guidelines for damages in similar cases may help trim expectations of bigger payouts. Nonetheless, each of these proposals seems to have drawbacks and caveats in the attempt to implement tort reform, concludes the article.
Lots of In-House Clients Balk At Paying Novice Lawyers.
An October 11, 2011 article in The Wall Street Journal informs us that more than 20% of the 366 in-house legal departments responding in a September 2011 survey by the Association of Corporate Counsel said they are refusing to pay for the work of first- or second-year attorneys in at least some matters. This has raised the specter that some firms may have to remassage their organizational model, maybe adopting an apprenticeship program similar to that utilized in the U.K.–where prospective solicitors take a one-year course on legal practice followed by an apprenticeship at much reduced (or sometimes free) compensation levels.
Dallas, Houston and Atlanta Top the Cities With Greatest Buying Power For First Year Associates.
The Wall Street Journal, in an October 31, 2011 article, tells us that Dallas, Houston, and Atlanta rank 1, 2, and 3 for giving first year associates the greatest “buying power” when comparing starting salaries with the costs of living. Albany, N.Y. was at the bottom of the list.