7/2/2014

Be Nice, Save Money

The Economic Benefits of Practicing With Professionalism

By Michele Newman , Stephen Dzury , Larry Smith

All of us like to think of ourselves as professionals and that we therefore act with professionalism. Of course, that can mean different things under different circumstances. Here, we explore the economic impact that professionalism can have on litigation. We focus on whether outside attorneys who practice with more (or less) professionalism make a difference in overall litigation costs.

Practicing with professionalism has other benefits beyond economics. For example, it reinforces or enhances the positive public image of the company/client, supports state-mandated goals or requirements on attorneys, and produces a less stressful litigation environment for the participants. But, to the extent that outside litigation costs may be affected by the nature or extent of professionalism extended between the attorneys, this factor cannot be overlooked. As it turns out, it cannot be — or at least has not been — measured, either.

Practicing with professionalism is not an option for attorneys. Most states, acting through their State Bar Association or Courts have adopted stringent rules and/or standards within which the attorneys must practice and are held accountable. The American Bar Association’s Center for Professional Conduct, which has existed since the late 1970s to enhance professionalism, is a national, albeit voluntary, response to such concerns. Individual states or their courts have taken a variety of approaches, but all are an attempt to ensure that attorneys and judges are held to the highest level of professionalism.

Some State Bar Associations have formed peer groups such as standing committees on professionalism. In some jurisdictions, governing appellate courts have stepped in to require increased professionalism among its attorneys and created oversight by special commissions or, as in the case of New York, through formation of the Judicial Institute on Professionalism in the Law. Some states like Florida have taken a multi-prong approach.

When looking for background data on this topic, we came up empty handed. The American Bar Association Center for Professionalism is unaware of any empirical studies demonstrating a link between professionalism and reduced litigation costs. The Florida Bar’s award winning Henry Latimer Center for Professionalism similarly had no data to offer. So did additional inquiries within the industry. Perhaps a sense that the answer is either self-evident or non quantifiable might explain the dearth of data to support the concept that what is “good” might also be cost effective.

Negative Effect

If the economic benefit of acting with professionalism cannot be isolated or measured, the cost of acting unprofessionally can be, at least anecdotally. First, an embarrassing example that showered negative national attention on the lawyers. In Avista Management, Inc. v. Wasau Underwriters Insurance Company, litigation between two lawyers became so acrimonious that they couldn’t even agree on whose office within which to hold a deposition — even though both of their offices were in the same building. Motions, memoranda, angst and bewilderment ensued. Then, a frustrated federal judge entered an Order in which he ruled:

Upon consideration of the Motion – the latest in a series of Gordian knots that the parties have been unable to untangle without enlisting the assistance of the federal courts – it is ORDERED that said Motion is DENIED. Instead, the Court will fashion a new form of alternative dispute resolution, to wit: at 4:00 P.M. on Friday, June 30, 2006, counsel shall convene at a neutral site agreeable to both parties. If counsel cannot agree on a neutral site, they shall meet on the steps of the Sam M. Gibbons U.S. Courthouse, 801 North Florida Ave., Tampa, Florida 33602. Each lawyer shall be entitled to be accompanied by one paralegal who shall act as an attendant and witness. At that time and location, counsel shall engage in one (1) game of “rock, paper, scissors.” The winner of this engagement shall be entitled to select the location for the 30(b)(6) [corporate representative] deposition to be held somewhere in Hillsborough County during the period July 11-12, 2006. If either party disputes the outcome of this engagement, an appeal may be filed and a hearing will be held at 8:30 A.M. on Friday, July 7, 2006 before the undersigned in Courtroom 3, George C. Young United States Courthouse and Federal Building, 80 North Hughey Avenue, Orlando, Florida 32801.

It was an embarrassing, silly display of swordplay. It was also undoubtedly expensive for the clients to reach that point. Similar, unpublicized tugs-of-war go on all the time —  arguing over dates, locations, inspections, discovery matters or the time of day. Of course, the actions of the lawyers sometimes reflect, and almost always reflect upon, their clients. Thus, lawyers may reach such a stage of chaotic competition due to the urging or perceived expectations of their clients. Somehow, some attorneys have received (or interpreted) a message that attorneys are well-dressed gladiators, that litigation is akin to a client-funded wrestling match where cooperation or compromise is a form of weakness, and only the “meaner, tougher” litigator can get the result expected by the client.

This is not lost on the Courts either. United States District Court, D. Connecticut. Teri Tucker, Plaintiff, v. American International Group, Inc., et al; as noted by one U.S. Senior District Judge: “the Court is constrained to note with regret the distressing and toxic level of dissension between counsel for the parties, conduct which wastes time and obstructs that search for justice which is the goal of all civil litigation. Specifically, both plaintiff’s and defendants’ counsel have had constant and incomprehensible difficulty in communicating and engaging in the discovery process. Counsel have routinely sparred in depositions and repeatedly accused each other of unprofessional and even unethical conduct. Motions to compel and or for protective orders had been filed on numerous occasions. None of this maneuvering serves to expedite the resolution of plaintiff’s claims in this action or defendants’ defenses to them. Rather, the contentiousness pervading discovery has resulted in unnecessary delay and additional cost to all parties.” The Court went on to remind the parties there that it had “well-established powers with which to deal with litigation abuse.”

At a panel session at a CLM Annual Conference, one industry representative commented that he didn’t really care how the lawyer achieved the desired result. Perhaps what he meant to convey was that the client trusts the attorney it has selected to best balance all existing rules, keep costs low and simultaneously appropriately defend the case. Or maybe he simply meant what he said: he really didn’t care. That may be short sighted.

Complicating Litigation

The need for civility and professionalism does not begin and end solely with counsel. Nature, as we have all been told, abhors a vacuum, and when professionalism disappears, something must take its place. When emotions fill that vacuum, costs rise, resolution may be pushed to the side, and it becomes much more expensive and challenging to ultimately achieve a resolution to the underlying matter, much less on desired terms.

In a matter involving two bank employees, one of whom was killed and another rendered a paraplegic as a result of a botched robbery, the litigation between the insured (the entity contracted to install the predesigned and specified security system) and the plaintiffs started off contentious and became exceedingly harsh. Depositions took twice as long as they should have. Unnecessary motion practice added significant amounts of time to the case, with over a dozen motions for sanctions being filed over simple, inconsequential discovery issues. Multiple mediations took place, even though it was clear early on that they were not only going to be unsuccessful, but would only increase the vitriol between counsel and the parties. At one of the mediations, a near fistfight broke out after personal insults were traded between counsel and the adjuster. Neither the participants nor the case found any middle ground and it was tried to a significant verdict, which was vacated on appeal. Ultimately, the cost to all parties was significantly higher because counsel and the parties couldn’t act civilly and professionally to one another.

Litigation is adversarial by nature and fraught with egos and emotional overlays. Navigating its course with professionalism, like applying etiquette to a complicated social event, allows the participants to step back and follow basic rules. Doing so not only adds a filter to the tension, it often has the effect of reducing resultant costs.

Undoubtedly, there are those for whom professionalism or cooperation hold little appeal. But, when client and counsel insist upon it, the positive results can be felt in a better and less expensive experience.



Michele Newman is a Claims Litigation Consultant with Connecticut Medical Insurance Company.

Stephen Dzury is the Senior Vice President of Claims for Berkley Public Entity Managers, a WR Berkley company.

Larry Smith is a founding partner of Southern Trial Counsel, PLC.

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