Trial Insurance

 Posted on January 04, 2008 in Uncategorized

Gideon wrote today about the cost of jury trial, noting that many citizens-accused with retained counsel can't afford to pay for a jury trial. He asked,

Who can do something to avoid this? Should clients always assume they will go to trial and hire only attorneys they can afford? Should attorneys not charge a subsequent trial fee, but merely a one-time flat fee? Should lawyers charge hourly rates instead?

The answer to the last question is "no", as Scott and I have both argued. Even if hourly billing on criminal cases were a good idea, it wouldn't provide the solution that Gideon seeks because clients would still, before trial, have to come up with enough money to cover all of the time that the lawyer might have to put into the trial.

The answer to the second question is "yes". Clients should always assume they will go to trial, and should hire only lawyers they can afford.

The answer to the first question is "the courts and retained counsel can do something to avoid this". If the appellate courts would set the bar a little higher on effective representation and the trial courts would require lawyers to have something more than a pulse to represent the accused, more of the working poor would get the help of professional public defenders or court-appointed counsel; that'd be the greatest solution to the problem of the prohibitive cost of trial.

The retained lawyers who give a damn and do a good job can do a little to mitigate the cost of jury trial as well, and without great personal sacrifice. In his reply, Scott addressed Gideon's third question: "The practice of breaking up the fee is usually a sound one, since most cases don't go to trial and it would improper to charge for services that are neither rendered nor needed." In a sense this is true: if a lawyer would accept a split fee of $10,000 for a plea or dismissal and $50,000 more to try a case, it wouldn't be fair (all else being equal) for her to have charged a flat $60,000 to someone who didn't go to trial.

(There's nothing inherently improper about a consumer paying for something that he doesn't ultimately use. People buy books that they don't read. They buy electronics, and buy extended warranties that they neither need nor use. They buy casualty insurance to insure against possible losses that never materialize. The potential for impropriety in fee setting arises because of the unique status of the lawyer and her unique relationship with the client.)

If a lawyer charges $10,000 for a plea or dismissal and $50,000 more to try a case, she might include in her one-time flat fee the cost of trial, discounted to account for the probability that the case will not go to trial. The lawyer would, in this way, share with the client the risk that a trial will be required.

For example, she might say to the client, "if you wanted to pay a split fee I would charge $10,000 for a plea or dismissal and an additional $50,000 for a trial. You would have to deposit the cost of trial in my trust account before representation began." This last provision is reasonable because resources have a way of evaporating once the lawyer is committed to the case. She might continue: "Based on my experience and my understanding of your case, it appears to me that there's a 30% chance that your case will go to trial; I'm willing to split the risk with you and take a flat fee of $25,000 to handle your case, including a trial if necessary. If you agree, you will not have to pay any more for trial, and you will not pay any less for a resolution short of trial."

(This won't work in all jurisdictions, because some agencies that oversee lawyers' ethics interfere more than others with lawyers' and clients' ability to contract. Also, as in any exchange of money for lawyers' services there is the potential for a conflict of interest; here, the lawyer, who has been paid all she will be paid for a trial, must resist any tendency she might have to influence the client not to try the case.)

The clients who do not ultimately go to trial will wind up having paid more than they would had they hired a lawyer who charged a split fee. The clients who do ultimately go to trial wind up paying less.

The lawyer, if she correctly assesses the probability that her cases will go to trial, makes the same in the long run as she would with a split fee. She also has the satisfaction of knowing that her clients who gave up their Sixth Amendment rights didn't do so because of the money. Best of all, she's provided jury trials to some people who couldn't otherwise afford them.