ABA regulation of contingency fees: Money talks, ethics walks

Fordham Law Review

Volumn 65, Issue 1, 1996, Pages 247-298

  Brickman, Lester ^a  

^a YESHIVA UNIVERSITY   (United States)

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EID: 2242425520     PISSN: 0015704X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (288)

1. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 389 (1994) [hereinafter Formal Op. 94-389].
2. Letter to the ABA Standing Comm. on Ethics and Professional Responsibility (Feb. 10, 1994), infra app. A, at 299 [hereinafter Letter] (request for ethical guidance, principally drafted by Michael Horowitz and signed by Morris Abram, William Barr, Ronald Beard, Robert Bork, Lester Brickman, Samuel Butler, Edward Costikyan, Roger Cramton, Norman Dorsen, Tyron Fahner, Thomas Gee, Walter Gellhorn, Mary Ann Glendon, Erwin Griswold, Charles Horsky, Michael Horowitz, Rex Lee, Thomas Morgan, Jeffrey O'Connell, Theodore Olson, Robert O'Neil, Shirley Peterson, Robert Pitofsky, George Priest, Leon Silverman, and Harry Wellington).
3. See infra part IV.
4. See infra part IV.
5. See infra text accompanying notes 159-60.
6. This Article may be seen as a response to the "call to arms" issued by Professors Ted Finman and Ted Schneyer inviting legal scholars to critique ABA opinions. See Ted Finman & Theodore Schneyer, The Role of Bar Association Ethics Opinions in Regulating Lawyer Conduct: A Critique of the Work of the ABA Committee on Ethics and Professional Responsibility, 29 UCLA L. Rev. 67, 150 (1981) (noting that the opinions of the Committee on Ethics and Professional Responsibility [CEPR] are "very rarely" criticized in the professional literature, and that "no one writes law review 'casenotes' on new CEPR opinions . . . even though . . . formal opinions can be as important as many of the appellate cases that are noted," and opining that "this lack of professional criticism is most regrettable, especially since other accountability measures offer no great prospect for improving CEPR's work"). Professor Schneyer was the organizer of the January 1996 Association of American Law Schools Professional Responsibility Section meeting on regulating lawyers, and selected the authors and articles for presentation at the meeting and, thus, for inclusion in this Symposium.
7. Although the Committee has no authority to bind courts, Committee opinions are often influential as a source of law. See id. at 84-86 (indicating the many contexts in which Committee opinions are cited). In this Article, I urge courts, for the reasons stated, to reject Formal Opinion 94-389 as a source of law.
8. In a recent publication, ATLA "publicly urge[d] its members to 'exercise sound judgment in using a percentage in the contingent fee contract that is commensurate with the risk, cost, and effort required.'" American Trial Lawyers Association, Keys to the Courthouse: Quick Facts on the Contingent Fee System 4 (1994); see Michael Horowitz, Making Ethics Real, Making Ethics Work: A Proposal for Contingency Fee Reform, 44 Emory L.J. 173, 178 n.17 (1995).
9. Model Rules of Professional Conduct Preamble (1994) [hereinafter Model Rules]; see infra text accompanying note 16.
10. Model Rules of Professional Conduct Preamble (1994) [hereinafter Model Rules]; see infra text accompanying note 16.
11. On the whole, occupations all too commonly invoke the word "profession" for such self-serving purposes as advancing their social status, shielding themselves from moral accountability, minimizing public scrutiny, or justifying restrictive practices. Richard Abel, Taking Professionalism Seriously, 1989 Ann. Surv. Am. L. 41, 41.
12. This is especially germane in the legal profession where ethical codes are drafted, approved, and adopted as law in a process that does not allow for public participation. See Nancy J. Moore, The Usefulness of Ethical Codes, 1989 Ann. Surv. Am. L. 7, 14-15. As Professor Rhode states: Unlike governance structures in other nations and professions, regulation of the American bar has remained under almost exclusive control of the group to be regulated. Courts in this country have asserted inherent authority to oversee the practice of law, and generally have permitted legislative initiatives only if consistent with judicial standards. The Committee that drafted the Code of Professional Responsibility included no lay members; the 13-member Model Rules Commission had only one. Nor were any lay perspectives included on the bodies adopting those codes - the American Bar Association's House of Delegates and state supreme courts. Deborah L. Rhode, Institutionalizing Ethics, 44 Case W. Res. L. Rev. 665, 687 (1994) [hereinafter Rhode, Institutionalizing Ethics] (footnotes omitted); see also Deborah L. Rhode, Why the ABA Bothers: A Functional Perspective on Professional Codes, 59 Tex. L. Rev. 689, 690 (1981) [hereinafter Rhode, Why the ABA Bothers] ("[The] imbalance between professional and public representation in the drafting phase is exacerbated by a ratification process in which only the views of professionals are systematically solicited, and in which they alone cast the decisive vote."). Thus, "the legal profession has achieved a degree of self-regulation far beyond either the reality or even the expectations of any other professional group." Moore, supra, at 15.
13. This is especially germane in the legal profession where ethical codes are drafted, approved, and adopted as law in a process that does not allow for public participation. See Nancy J. Moore, The Usefulness of Ethical Codes, 1989 Ann. Surv. Am. L. 7, 14-15. As Professor Rhode states: Unlike governance structures in other nations and professions, regulation of the American bar has remained under almost exclusive control of the group to be regulated. Courts in this country have asserted inherent authority to oversee the practice of law, and generally have permitted legislative initiatives only if consistent with judicial standards. The Committee that drafted the Code of Professional Responsibility included no lay members; the 13-member Model Rules Commission had only one. Nor were any lay perspectives included on the bodies adopting those codes - the American Bar Association's House of Delegates and state supreme courts. Deborah L. Rhode, Institutionalizing Ethics, 44 Case W. Res. L. Rev. 665, 687 (1994) [hereinafter Rhode, Institutionalizing Ethics] (footnotes omitted); see also Deborah L. Rhode, Why the ABA Bothers: A Functional Perspective on Professional Codes, 59 Tex. L. Rev. 689, 690 (1981) [hereinafter Rhode, Why the ABA Bothers] ("[The] imbalance between professional and public representation in the drafting phase is exacerbated by a ratification process in which only the views of professionals are systematically solicited, and in which they alone cast the decisive vote."). Thus, "the legal profession has achieved a degree of self-regulation far beyond either the reality or even the expectations of any other professional group." Moore, supra, at 15.
14. This is especially germane in the legal profession where ethical codes are drafted, approved, and adopted as law in a process that does not allow for public participation. See Nancy J. Moore, The Usefulness of Ethical Codes, 1989 Ann. Surv. Am. L. 7, 14-15. As Professor Rhode states: Unlike governance structures in other nations and professions, regulation of the American bar has remained under almost exclusive control of the group to be regulated. Courts in this country have asserted inherent authority to oversee the practice of law, and generally have permitted legislative initiatives only if consistent with judicial standards. The Committee that drafted the Code of Professional Responsibility included no lay members; the 13-member Model Rules Commission had only one. Nor were any lay perspectives included on the bodies adopting those codes - the American Bar Association's House of Delegates and state supreme courts. Deborah L. Rhode, Institutionalizing Ethics, 44 Case W. Res. L. Rev. 665, 687 (1994) [hereinafter Rhode, Institutionalizing Ethics] (footnotes omitted); see also Deborah L. Rhode, Why the ABA Bothers: A Functional Perspective on Professional Codes, 59 Tex. L. Rev. 689, 690 (1981) [hereinafter Rhode, Why the ABA Bothers] ("[The] imbalance between professional and public representation in the drafting phase is exacerbated by a ratification process in which only the views of professionals are systematically solicited, and in which they alone cast the decisive vote."). Thus, "the legal profession has achieved a degree of self-regulation far beyond either the reality or even the expectations of any other professional group." Moore, supra, at 15.
15. This is especially germane in the legal profession where ethical codes are drafted, approved, and adopted as law in a process that does not allow for public participation. See Nancy J. Moore, The Usefulness of Ethical Codes, 1989 Ann. Surv. Am. L. 7, 14-15. As Professor Rhode states: Unlike governance structures in other nations and professions, regulation of the American bar has remained under almost exclusive control of the group to be regulated. Courts in this country have asserted inherent authority to oversee the practice of law, and generally have permitted legislative initiatives only if consistent with judicial standards. The Committee that drafted the Code of Professional Responsibility included no lay members; the 13-member Model Rules Commission had only one. Nor were any lay perspectives included on the bodies adopting those codes - the American Bar Association's House of Delegates and state supreme courts. Deborah L. Rhode, Institutionalizing Ethics, 44 Case W. Res. L. Rev. 665, 687 (1994) [hereinafter Rhode, Institutionalizing Ethics] (footnotes omitted); see also Deborah L. Rhode, Why the ABA Bothers: A Functional Perspective on Professional Codes, 59 Tex. L. Rev. 689, 690 (1981) [hereinafter Rhode, Why the ABA Bothers] ("[The] imbalance between professional and public representation in the drafting phase is exacerbated by a ratification process in which only the views of professionals are systematically solicited, and in which they alone cast the decisive vote."). Thus, "the legal profession has achieved a degree of self-regulation far beyond either the reality or even the expectations of any other professional group." Moore, supra, at 15.
16. This is especially germane in the legal profession where ethical codes are drafted, approved, and adopted as law in a process that does not allow for public participation. See Nancy J. Moore, The Usefulness of Ethical Codes, 1989 Ann. Surv. Am. L. 7, 14-15. As Professor Rhode states: Unlike governance structures in other nations and professions, regulation of the American bar has remained under almost exclusive control of the group to be regulated. Courts in this country have asserted inherent authority to oversee the practice of law, and generally have permitted legislative initiatives only if consistent with judicial standards. The Committee that drafted the Code of Professional Responsibility included no lay members; the 13-member Model Rules Commission had only one. Nor were any lay perspectives included on the bodies adopting those codes - the American Bar Association's House of Delegates and state supreme courts. Deborah L. Rhode, Institutionalizing Ethics, 44 Case W. Res. L. Rev. 665, 687 (1994) [hereinafter Rhode, Institutionalizing Ethics] (footnotes omitted); see also Deborah L. Rhode, Why the ABA Bothers: A Functional Perspective on Professional Codes, 59 Tex. L. Rev. 689, 690 (1981) [hereinafter Rhode, Why the ABA Bothers] ("[The] imbalance between professional and public representation in the drafting phase is exacerbated by a ratification process in which only the views of professionals are systematically solicited, and in which they alone cast the decisive vote."). Thus, "the legal profession has achieved a degree of self-regulation far beyond either the reality or even the expectations of any other professional group." Moore, supra, at 15.
17. The advantages of self-regulation are manifold: "[C]odes . . . are a primary instrument for attaining . . . objective achievement and recognition . . . [and] generating] monetary and psychic benefits by enhancing occupational status and self-image; constraining competition; preserving autonomy; and reconciling client, colleague, and institutional interests." Rhode, Why the ABA Bothers, supra note 11, at 689-90; see also Richard L. Abel, American Lawyers 142 (1989) [hereinafter Abel, American Lawyers] (stating that, in the past, the legal profession has employed the privilege of self-regulation to restrict competition).
18. The advantages of self-regulation are manifold: "[C]odes . . . are a primary instrument for attaining . . . objective achievement and recognition . . . [and] generating] monetary and psychic benefits by enhancing occupational status and self-image; constraining competition; preserving autonomy; and reconciling client, colleague, and institutional interests." Rhode, Why the ABA Bothers, supra note 11, at 689-90; see also Richard L. Abel, American Lawyers 142 (1989) [hereinafter Abel, American Lawyers] (stating that, in the past, the legal profession has employed the privilege of self-regulation to restrict competition).
19. A profession differs from other occupations in that it is autonomous, a status that is singularly perpetuated by the establishment of a professional code. Rhode, Why the ABA Bothers, supra note 11, at 714. Professor Rhode observes that "[a]s both the history and content of ABA codifications make plain, the bar bothers because its interests so dictate. Like any other occupational group [with an ethics code], the ABA formulates and fulminates for its health, collectively speaking." Id. at 689. With reference to the debate in the ABA over adoption of provisions in the Model Rules dealing with disclosure of client fraud, Professor Rhode has further observed that "[n]otably absent . . . was any justification for provisions allowing disclosures to protect lawyers' own financial interests but not to preserve other individuals' health, safety, or economic security. Such provisions highlight more general problems with a regulatory process under exclusive control of the group to be regulated." Rhode, Institutionalizing Ethics, supra note 11, at 675-76 (citation omitted).
20. A profession differs from other occupations in that it is autonomous, a status that is singularly perpetuated by the establishment of a professional code. Rhode, Why the ABA Bothers, supra note 11, at 714. Professor Rhode observes that "[a]s both the history and content of ABA codifications make plain, the bar bothers because its interests so dictate. Like any other occupational group [with an ethics code], the ABA formulates and fulminates for its health, collectively speaking." Id. at 689. With reference to the debate in the ABA over adoption of provisions in the Model Rules dealing with disclosure of client fraud, Professor Rhode has further observed that "[n]otably absent . . . was any justification for provisions allowing disclosures to protect lawyers' own financial interests but not to preserve other individuals' health, safety, or economic security. Such provisions highlight more general problems with a regulatory process under exclusive control of the group to be regulated." Rhode, Institutionalizing Ethics, supra note 11, at 675-76 (citation omitted).
21. In an effort to sustain the monetary benefits of a competitive market, the codes themselves propagate a supply and price monopoly over the profession: Perhaps the clearest example of a Code standard which operates primarily for the benefit of lawyers is the prohibition of the "unauthorized practice of law" reinforced by Disciplinary Rule (DR) 3-101(A), . . . [which has] historically been used to suppress competition by lay persons seeking to perform services at less cost than those provided by members of the Bar. Thomas D. Morgan, The Evolving Concept of Professional Responsibility, 90 Harv. L. Rev. 702, 707 (1977);
22. see also Roger C. Cramton, Delivery of Legal Services to Ordinary Americans, 44 Case W. Res. L. Rev. 531, 544 (1994) ("Both conservative economists and Marxist analysts view much of the profession's regulation of itself . . . as designed to enhance the incomes and status of lawyers."). While the codes succeed in their goal of maximizing lawyers' interests, they fail, perhaps intentionally, in their goal of creating a self-sufficient profession despite the codified mechanisms for self-regulation. Indeed, the code provisions are sufficiently loose and lax to have facilitated the collapse of the system into one of non-regulation, save for the most egregious of behaviors such as theft from clients, although in recent years the bar has made attempts at improving the disciplinary process. See generally ABA Center for Professional Responsibility, Lawyer Regulations for a New Century: Report of the Committee on Evaluation of Disciplinary Enforcement (1992) (providing 21 recommendations for improving the disciplinary enforcement process). As Professor Abel has observed: [S]tudy after study has shown that the current rules of professional conduct are not enforced. Misconduct is rarely perceived. If perceived, it is not reported. If reported, it is not investigated. If investigated, violations are not found. If found, they are excused. If they are not excused, penalties are light. And if significant penalties are imposed, the lawyer soon returns to practice, in that state or another. Richard Abel, Why Does the ABA Promulgate Ethical Rules?, 59 Tex. L. Rev. 639, 648-9 (1981) [hereinafter Abel, Why Does the ABA Promulgate Ethical Rules?] (citations omitted). Professor Abel further notes that "[t]he suspicion that professional associations promulgate ethical rules more to legitimate themselves in the eyes of the public than to engage in effective regulation is strengthened by the inadequacy of enforcement mechanisms." Abel, American Lawyers, supra note 12, at 143.
23. see also Roger C. Cramton, Delivery of Legal Services to Ordinary Americans, 44 Case W. Res. L. Rev. 531, 544 (1994) ("Both conservative economists and Marxist analysts view much of the profession's regulation of itself . . . as designed to enhance the incomes and status of lawyers."). While the codes succeed in their goal of maximizing lawyers' interests, they fail, perhaps intentionally, in their goal of creating a self-sufficient profession despite the codified mechanisms for self-regulation. Indeed, the code provisions are sufficiently loose and lax to have facilitated the collapse of the system into one of non-regulation, save for the most egregious of behaviors such as theft from clients, although in recent years the bar has made attempts at improving the disciplinary process. See generally ABA Center for Professional Responsibility, Lawyer Regulations for a New Century: Report of the Committee on Evaluation of Disciplinary Enforcement (1992) (providing 21 recommendations for improving the disciplinary enforcement process). As Professor Abel has observed: [S]tudy after study has shown that the current rules of professional conduct are not enforced. Misconduct is rarely perceived. If perceived, it is not reported. If reported, it is not investigated. If investigated, violations are not found. If found, they are excused. If they are not excused, penalties are light. And if significant penalties are imposed, the lawyer soon returns to practice, in that state or another. Richard Abel, Why Does the ABA Promulgate Ethical Rules?, 59 Tex. L. Rev. 639, 648-9 (1981) [hereinafter Abel, Why Does the ABA Promulgate Ethical Rules?] (citations omitted). Professor Abel further notes that "[t]he suspicion that professional associations promulgate ethical rules more to legitimate themselves in the eyes of the public than to engage in effective regulation is strengthened by the inadequacy of enforcement mechanisms." Abel, American Lawyers, supra note 12, at 143.
24. see also Roger C. Cramton, Delivery of Legal Services to Ordinary Americans, 44 Case W. Res. L. Rev. 531, 544 (1994) ("Both conservative economists and Marxist analysts view much of the profession's regulation of itself . . . as designed to enhance the incomes and status of lawyers."). While the codes succeed in their goal of maximizing lawyers' interests, they fail, perhaps intentionally, in their goal of creating a self-sufficient profession despite the codified mechanisms for self-regulation. Indeed, the code provisions are sufficiently loose and lax to have facilitated the collapse of the system into one of non-regulation, save for the most egregious of behaviors such as theft from clients, although in recent years the bar has made attempts at improving the disciplinary process. See generally ABA Center for Professional Responsibility, Lawyer Regulations for a New Century: Report of the Committee on Evaluation of Disciplinary Enforcement (1992) (providing 21 recommendations for improving the disciplinary enforcement process). As Professor Abel has observed: [S]tudy after study has shown that the current rules of professional conduct are not enforced. Misconduct is rarely perceived. If perceived, it is not reported. If reported, it is not investigated. If investigated, violations are not found. If found, they are excused. If they are not excused, penalties are light. And if significant penalties are imposed, the lawyer soon returns to practice, in that state or another. Richard Abel, Why Does the ABA Promulgate Ethical Rules?, 59 Tex. L. Rev. 639, 648-9 (1981) [hereinafter Abel, Why Does the ABA Promulgate Ethical Rules?] (citations omitted). Professor Abel further notes that "[t]he suspicion that professional associations promulgate ethical rules more to legitimate themselves in the eyes of the public than to engage in effective regulation is strengthened by the inadequacy of enforcement mechanisms." Abel, American Lawyers, supra note 12, at 143.
25. Professor Rhode writes: Lawyers no less than grocers are animated by parochial concerns. What distinguishes professionals is their relative success in packaging occupational interests as societal imperatives. In that regard, codes of ethics have proved highly useful. Seldom, of course, are such documents baldly self-serving; it is not to a profession's long-term advantage that it appear insensitive to the common good. But neither are any profession's own encyclicals likely to incorporate public policies that might significantly compromise members' status, monopoly, working relationships, or autonomy. Rhode, Why the ABA Bothers, supra note 11, at 720.
26. Model Rules, supra note 1, Preamble; see also Model Code of Professional Responsibility Preamble (1981) [hereinafter Model Code] ("[I]n the last analysis it is the desire for the respect and confidence of the members of his profession and of the society which he serves that should provide to a lawyer the incentive for the highest possible degree of ethical conduct.").
27. Model Rules, supra note 1, Preamble; see also Model Code of Professional Responsibility Preamble (1981) [hereinafter Model Code] ("[I]n the last analysis it is the desire for the respect and confidence of the members of his profession and of the society which he serves that should provide to a lawyer the incentive for the highest possible degree of ethical conduct.").
28. Model Rules, supra note 1, Preamble; see also Model Code of Professional Responsibility Preamble (1981) [hereinafter Model Code] ("[I]n the last analysis it is the desire for the respect and confidence of the members of his profession and of the society which he serves that should provide to a lawyer the incentive for the highest possible degree of ethical conduct.").
29. "The purpose of such rules [of legal ethics] is not to describe reality or even to prescribe right behavior, but rather to create a myth about what lawyers might be in order to disguise what they are." Abel, Why Does the ABA Promulgate Ethical Rules?, supra note 14, at 668. The Model Code is not always as oblique as Professor Abel suggests as, for example, when it specifically prohibits the aiding of the unauthorized practice of law. See Morgan, supra note 14, at 707 ("Perhaps the clearest example of a Code standard which operates primarily for the benefit of lawyers is the prohibition of the 'unauthorized practice of law' reinforced by Disciplinary Rule (DR) 3-101(A) . . . by lay persons seeking to perform services a less cost than those provided by members of the Bar."). See generally Thomas R. Andrews, Nonlawyers in the Business of Law: Does the One Who Has the Gold Really Make the Rules?, 40 Hastings L.J. 577, 583-90 (1989) (reviewing history of the ABA's efforts to police unauthorized practice of law). Other examples of Model Code efforts to restrict the practice of law so as to benefit lawyers include Disciplinary Rule ("DR") 3-103(A), which states that "[a] lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law"; DR 3-102(A), which states that "[a] lawyer or law firm shall not share legal fees with a non-lawyer"; and DR 3-101(A), which states that "[a] lawyer shall not aid a non-lawyer in the unauthorized practice of law." See Model Code, supra note 1, DR 3-101(A) & 3-102(A) & 3-103(A). These provisions essentially suppress lower priced competition in the practice of law by laypersons so as to secure a price monopoly for licensed attorneys. See Morgan, supra note 14, at 707 ("[T]he unauthorized practice rules have historically been used to suppress competition by lay persons.").
30. "The purpose of such rules [of legal ethics] is not to describe reality or even to prescribe right behavior, but rather to create a myth about what lawyers might be in order to disguise what they are." Abel, Why Does the ABA Promulgate Ethical Rules?, supra note 14, at 668. The Model Code is not always as oblique as Professor Abel suggests as, for example, when it specifically prohibits the aiding of the unauthorized practice of law. See Morgan, supra note 14, at 707 ("Perhaps the clearest example of a Code standard which operates primarily for the benefit of lawyers is the prohibition of the 'unauthorized practice of law' reinforced by Disciplinary Rule (DR) 3-101(A) . . . by lay persons seeking to perform services a less cost than those provided by members of the Bar."). See generally Thomas R. Andrews, Nonlawyers in the Business of Law: Does the One Who Has the Gold Really Make the Rules?, 40 Hastings L.J. 577, 583-90 (1989) (reviewing history of the ABA's efforts to police unauthorized practice of law). Other examples of Model Code efforts to restrict the practice of law so as to benefit lawyers include Disciplinary Rule ("DR") 3-103(A), which states that "[a] lawyer shall not form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law"; DR 3-102(A), which states that "[a] lawyer or law firm shall not share legal fees with a non-lawyer"; and DR 3-101(A), which states that "[a] lawyer shall not aid a non-lawyer in the unauthorized practice of law." See Model Code, supra note 1, DR 3-101(A) & 3-102(A) & 3-103(A). These provisions essentially suppress lower priced competition in the practice of law by laypersons so as to secure a price monopoly for licensed attorneys. See Morgan, supra note 14, at 707 ("[T]he unauthorized practice rules have historically been used to suppress competition by lay persons.").
31. See Kenneth L. Penegar, The Professional Project: A Response to Terrell and Wildman, 41 Emory L.J. 473, 477 (1992) (stating that the bar's traditional anti-competitive practices included minimum fee schedules and prohibitions on advertising); see also Bates v. State Bar, 433 U.S. 350, 384 (1977) (holding that a rule prohibiting lawyers from advertising violates the First Amendment); Goldfarb v. Virginia State Bar, 421 U.S. 773, 793 (1975) (ruling that minimum fee schedules violate antitrust laws). See generally Gregory H. Bowers & Otis H. Stephens, Jr., Attorney Advertising and the First Amendment: The Development and Impact of a Constitutional Standard, 17 Mem. St. U. L. Rev. 221 (1987) (discussing the Constitutional protection afforded to attorney advertising before and after Bates). Minimum fee schedules and restrictions on advertising are classic examples of the bar's anti-competitive practices. Other examples include entry restrictions and market-division strategies designed to limit competition within the profession. Cramton, supra note 14, at 551-52 (footnotes omitted). These restrictions are a direct result of the bar's attempts to serve its own interests: "A principal force animating any occupation's efforts at self-regulation is a desire to minimize competition from both internal and outside sources." Rhode, Why the ABA Bothers, supra note 11, at 702.
32. See Kenneth L. Penegar, The Professional Project: A Response to Terrell and Wildman, 41 Emory L.J. 473, 477 (1992) (stating that the bar's traditional anti-competitive practices included minimum fee schedules and prohibitions on advertising); see also Bates v. State Bar, 433 U.S. 350, 384 (1977) (holding that a rule prohibiting lawyers from advertising violates the First Amendment); Goldfarb v. Virginia State Bar, 421 U.S. 773, 793 (1975) (ruling that minimum fee schedules violate antitrust laws). See generally Gregory H. Bowers & Otis H. Stephens, Jr., Attorney Advertising and the First Amendment: The Development and Impact of a Constitutional Standard, 17 Mem. St. U. L. Rev. 221 (1987) (discussing the Constitutional protection afforded to attorney advertising before and after Bates). Minimum fee schedules and restrictions on advertising are classic examples of the bar's anti-competitive practices. Other examples include entry restrictions and market-division strategies designed to limit competition within the profession. Cramton, supra note 14, at 551-52 (footnotes omitted). These restrictions are a direct result of the bar's attempts to serve its own interests: "A principal force animating any occupation's efforts at self-regulation is a desire to minimize competition from both internal and outside sources." Rhode, Why the ABA Bothers, supra note 11, at 702.
33. See Kenneth L. Penegar, The Professional Project: A Response to Terrell and Wildman, 41 Emory L.J. 473, 477 (1992) (stating that the bar's traditional anti-competitive practices included minimum fee schedules and prohibitions on advertising); see also Bates v. State Bar, 433 U.S. 350, 384 (1977) (holding that a rule prohibiting lawyers from advertising violates the First Amendment); Goldfarb v. Virginia State Bar, 421 U.S. 773, 793 (1975) (ruling that minimum fee schedules violate antitrust laws). See generally Gregory H. Bowers & Otis H. Stephens, Jr., Attorney Advertising and the First Amendment: The Development and Impact of a Constitutional Standard, 17 Mem. St. U. L. Rev. 221 (1987) (discussing the Constitutional protection afforded to attorney advertising before and after Bates). Minimum fee schedules and restrictions on advertising are classic examples of the bar's anti-competitive practices. Other examples include entry restrictions and market-division strategies designed to limit competition within the profession. Cramton, supra note 14, at 551-52 (footnotes omitted). These restrictions are a direct result of the bar's attempts to serve its own interests: "A principal force animating any occupation's efforts at self-regulation is a desire to minimize competition from both internal and outside sources." Rhode, Why the ABA Bothers, supra note 11, at 702.
34. See Model Code, supra note 1, DR 2-103(D)(4); Model Rules, supra note 1, Rules 5.4 & 7.2(c) & 7.3.
35. See Model Code, supra note 1, DR 2-103(D)(4); Model Rules, supra note 1, Rules 5.4 & 7.2(c) & 7.3.
36. See Model Code, supra note 1, DR 3-101; Model Rules, supra note 1, Rule 5.5(b).
37. See Model Code, supra note 1, DR 3-101; Model Rules, supra note 1, Rule 5.5(b).
38. See Model Code, supra note 1, DR 3-102; Model Rules, supra note 1, Rule 5.4(a).
39. See Model Code, supra note 1, DR 3-102; Model Rules, supra note 1, Rule 5.4(a).
40. See Rhode, Institutionalizing Ethics, supra note 11, at 688 ("[L]awyers' ethical codes have generally resolved conflicts between professional and societal objectives in favor of those doing the resolving.").
41. Attorneys' failure to disclose client fraud, and especially fraud that could only have been accomplished by use of lawyers' work product, has resulted in substantial losses to investors and to the government. See Lincoln Sav. & Loan Ass'n v. Wall, 743 F. Supp. 901 (D.D.C. 1990); Susan Schmidt, Panel: 'Where Were the Lawyers During the S&L Crisis?', Wash. Post, Mar. 23, 1991, at B1.
42. See Model Rules, supra note 1, Rule 1.6 (Proposed Final Draft 1981); id. (Final Draft 1983).
43. Prior to the enactment of Model Rule 1.6, the state of the ABA Model Code of Professional Responsibility was one of perpetual confusion over the dimension of an attorney's responsibility to blow the whistle on a client who was perpetrating a fraud in light of the attorney's conflicting obligation to preserve client confidences and secrets. Model Code DR 4-101(B)(1) prohibited a lawyer from revealing confidences or secrets, but DR 4-101(C)(3) allowed a lawyer to breach confidentiality if his client intended to commit a crime by disclosing the information necessary to prevent the crime. DR 7-102(B)(1) required a lawyer to disclose that a client had, in the course of representation, perpetrated a fraud against a person or tribunal provided that the lawyer learned of the fraud from other than confidential information - an exception that, of course, consumed the rule. The Code's ambivalence was highlighted during the course of the OPM matter when lawyers prepared documents that were used by their client in committing massive fraud - and continued to do so after learning of their client's fraudulent use - yet were found not to have violated ethical requirements. See Stuart Taylor, Jr., Of Lawyers, Ethics and Business, N.Y. Times, Feb. 6, 1983, § 3, at 4 (discussing the O.P.M. Leasing Services, Inc. case). Thus, in an attempt to clarify and reformulate the existing law, when the Model Rules were drafted, Model Rule 1.6 was proposed. The original draft of Model Rule 1.6 delineated several exceptions to the general rule that lawyers have a duty to keep client communications confidential. The language of that draft said that a lawyer "may" disclose otherwise secret information, if necessary: (1) [T]o prevent the client from committing a criminal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm, or in substantial injury to the financial interests or property of another; (2) to rectify the consequences of a client's criminal or fraudulent act in the furtherance of which the lawyer's services had been used; (3) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, or to establish a defense to a criminal charge, civil claim or disciplinary complaint against the lawyer based upon conduct in which the client was involved; or (4) to comply with other law. Model Rules of Professional Conduct Rule 1 6(b) (Revised Final Draft 1982), reprinted in Ronald D. Rotunda, The Notice of Withdrawal and the New Model Rules of Professional Conduct: Blowing the Whistle and Waving the Red Flag, 63 Or. L. Rev. 455, 471 (1984). Subsection (2) was subsequently rejected by the ABA House of Delegates, much to the consternation of the public and press, effectively barring an attorney from revealing client fraud even where the attorney's work product was an essential feature of the fraudulent scheme. See Model Rules, supra note 1, Rule 1.6 (Final Draft 1983). Some states have rejected the ABA Model Rule provision by calling on lawyers to rectify frauds perpetrated during the course of representation or to disclose life-threatening conduct. See ABA/BNA Lawyers' Manual on Professional Conduct 01:11-01:46 (1994) (listing each state's version of the clause).
44. Prior to the enactment of Model Rule 1.6, the state of the ABA Model Code of Professional Responsibility was one of perpetual confusion over the dimension of an attorney's responsibility to blow the whistle on a client who was perpetrating a fraud in light of the attorney's conflicting obligation to preserve client confidences and secrets. Model Code DR 4-101(B)(1) prohibited a lawyer from revealing confidences or secrets, but DR 4-101(C)(3) allowed a lawyer to breach confidentiality if his client intended to commit a crime by disclosing the information necessary to prevent the crime. DR 7-102(B)(1) required a lawyer to disclose that a client had, in the course of representation, perpetrated a fraud against a person or tribunal provided that the lawyer learned of the fraud from other than confidential information - an exception that, of course, consumed the rule. The Code's ambivalence was highlighted during the course of the OPM matter when lawyers prepared documents that were used by their client in committing massive fraud - and continued to do so after learning of their client's fraudulent use - yet were found not to have violated ethical requirements. See Stuart Taylor, Jr., Of Lawyers, Ethics and Business, N.Y. Times, Feb. 6, 1983, § 3, at 4 (discussing the O.P.M. Leasing Services, Inc. case). Thus, in an attempt to clarify and reformulate the existing law, when the Model Rules were drafted, Model Rule 1.6 was proposed. The original draft of Model Rule 1.6 delineated several exceptions to the general rule that lawyers have a duty to keep client communications confidential. The language of that draft said that a lawyer "may" disclose otherwise secret information, if necessary: (1) [T]o prevent the client from committing a criminal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm, or in substantial injury to the financial interests or property of another; (2) to rectify the consequences of a client's criminal or fraudulent act in the furtherance of which the lawyer's services had been used; (3) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, or to establish a defense to a criminal charge, civil claim or disciplinary complaint against the lawyer based upon conduct in which the client was involved; or (4) to comply with other law. Model Rules of Professional Conduct Rule 1 6(b) (Revised Final Draft 1982), reprinted in Ronald D. Rotunda, The Notice of Withdrawal and the New Model Rules of Professional Conduct: Blowing the Whistle and Waving the Red Flag, 63 Or. L. Rev. 455, 471 (1984). Subsection (2) was subsequently rejected by the ABA House of Delegates, much to the consternation of the public and press, effectively barring an attorney from revealing client fraud even where the attorney's work product was an essential feature of the fraudulent scheme. See Model Rules, supra note 1, Rule 1.6 (Final Draft 1983). Some states have rejected the ABA Model Rule provision by calling on lawyers to rectify frauds perpetrated during the course of representation or to disclose life-threatening conduct. See ABA/BNA Lawyers' Manual on Professional Conduct 01:11-01:46 (1994) (listing each state's version of the clause).
45. Prior to the enactment of Model Rule 1.6, the state of the ABA Model Code of Professional Responsibility was one of perpetual confusion over the dimension of an attorney's responsibility to blow the whistle on a client who was perpetrating a fraud in light of the attorney's conflicting obligation to preserve client confidences and secrets. Model Code DR 4-101(B)(1) prohibited a lawyer from revealing confidences or secrets, but DR 4-101(C)(3) allowed a lawyer to breach confidentiality if his client intended to commit a crime by disclosing the information necessary to prevent the crime. DR 7-102(B)(1) required a lawyer to disclose that a client had, in the course of representation, perpetrated a fraud against a person or tribunal provided that the lawyer learned of the fraud from other than confidential information - an exception that, of course, consumed the rule. The Code's ambivalence was highlighted during the course of the OPM matter when lawyers prepared documents that were used by their client in committing massive fraud - and continued to do so after learning of their client's fraudulent use - yet were found not to have violated ethical requirements. See Stuart Taylor, Jr., Of Lawyers, Ethics and Business, N.Y. Times, Feb. 6, 1983, § 3, at 4 (discussing the O.P.M. Leasing Services, Inc. case). Thus, in an attempt to clarify and reformulate the existing law, when the Model Rules were drafted, Model Rule 1.6 was proposed. The original draft of Model Rule 1.6 delineated several exceptions to the general rule that lawyers have a duty to keep client communications confidential. The language of that draft said that a lawyer "may" disclose otherwise secret information, if necessary: (1) [T]o prevent the client from committing a criminal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm, or in substantial injury to the financial interests or property of another; (2) to rectify the consequences of a client's criminal or fraudulent act in the furtherance of which the lawyer's services had been used; (3) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, or to establish a defense to a criminal charge, civil claim or disciplinary complaint against the lawyer based upon conduct in which the client was involved; or (4) to comply with other law. Model Rules of Professional Conduct Rule 1 6(b) (Revised Final Draft 1982), reprinted in Ronald D. Rotunda, The Notice of Withdrawal and the New Model Rules of Professional Conduct: Blowing the Whistle and Waving the Red Flag, 63 Or. L. Rev. 455, 471 (1984). Subsection (2) was subsequently rejected by the ABA House of Delegates, much to the consternation of the public and press, effectively barring an attorney from revealing client fraud even where the attorney's work product was an essential feature of the fraudulent scheme. See Model Rules, supra note 1, Rule 1.6 (Final Draft 1983). Some states have rejected the ABA Model Rule provision by calling on lawyers to rectify frauds perpetrated during the course of representation or to disclose life-threatening conduct. See ABA/BNA Lawyers' Manual on Professional Conduct 01:11-01:46 (1994) (listing each state's version of the clause).
46. Under an ethics regime where lawyers are prohibited from disclosing that their work product is being used by their clients to perpetrate fraud, lawyers' services command a higher value than under an ethics regime where lawyers must disclose the ongoing fraud. See Lester Brickman, Keeping Quiet in the Face of Fraud, L. A. Times (Wash., D.C.), Mar. 12, 1992, at All; see also Rhode, Institutionalizing Ethics, supra note 11, at 675 (commenting on the lack of dialogue during discussion of the proposed Model Rules regarding the justification for permitting disclosure of confidential client information to protect lawyers' financial interests but not to protect other persons' economic security, health, or safety); Roger C. Cramton, Proposed Legislation Concerning a Lawyer's Duty of Confidentiality, 22 Pepp. L. Rev. 1467, 1468-72 (1995) (discussing various states' ethical rules regarding disclosure of confidential client information in order to prevent bodily harm, death, fraud, or ruin of professional reputation).
47. Under an ethics regime where lawyers are prohibited from disclosing that their work product is being used by their clients to perpetrate fraud, lawyers' services command a higher value than under an ethics regime where lawyers must disclose the ongoing fraud. See Lester Brickman, Keeping Quiet in the Face of Fraud, L. A. Times (Wash., D.C.), Mar. 12, 1992, at All; see also Rhode, Institutionalizing Ethics, supra note 11, at 675 (commenting on the lack of dialogue during discussion of the proposed Model Rules regarding the justification for permitting disclosure of confidential client information to protect lawyers' financial interests but not to protect other persons' economic security, health, or safety); Roger C. Cramton, Proposed Legislation Concerning a Lawyer's Duty of Confidentiality, 22 Pepp. L. Rev. 1467, 1468-72 (1995) (discussing various states' ethical rules regarding disclosure of confidential client information in order to prevent bodily harm, death, fraud, or ruin of professional reputation).
48. Under an ethics regime where lawyers are prohibited from disclosing that their work product is being used by their clients to perpetrate fraud, lawyers' services command a higher value than under an ethics regime where lawyers must disclose the ongoing fraud. See Lester Brickman, Keeping Quiet in the Face of Fraud, L. A. Times (Wash., D.C.), Mar. 12, 1992, at All; see also Rhode, Institutionalizing Ethics, supra note 11, at 675 (commenting on the lack of dialogue during discussion of the proposed Model Rules regarding the justification for permitting disclosure of confidential client information to protect lawyers' financial interests but not to protect other persons' economic security, health, or safety); Roger C. Cramton, Proposed Legislation Concerning a Lawyer's Duty of Confidentiality, 22 Pepp. L. Rev. 1467, 1468-72 (1995) (discussing various states' ethical rules regarding disclosure of confidential client information in order to prevent bodily harm, death, fraud, or ruin of professional reputation).
49. Lawyer self-governance is furthered not only by the promulgation of a professional code, but also by judicial and administrative proceedings which enforce the code and advisory opinions of bar association ethics committees which interpret the code. See Finman & Schneyer, supra note 6, at 68-69.
50. See Rhode, Institutionalizing Ethics, supra note 11, at 687 (1994) ("Interpretation and enforcement of professional rules similarly remain under professional control."). For a brief history and description of the use of bar committees to render advice on legal ethics, see Finman & Schneyer, supra note 6, at 69 n.4 and sources cited therein. See also Whitney A. McCaslin, Empowering Ethics Committees, 9 Geo. J. Legal Ethics 959, 964-66 (1996) (discussing the history of the ABA Canons of Professional Ethics from their adoption in 1908).
51. See Rhode, Institutionalizing Ethics, supra note 11, at 687 (1994) ("Interpretation and enforcement of professional rules similarly remain under professional control."). For a brief history and description of the use of bar committees to render advice on legal ethics, see Finman & Schneyer, supra note 6, at 69 n.4 and sources cited therein. See also Whitney A. McCaslin, Empowering Ethics Committees, 9 Geo. J. Legal Ethics 959, 964-66 (1996) (discussing the history of the ABA Canons of Professional Ethics from their adoption in 1908).
52. See Rhode, Institutionalizing Ethics, supra note 11, at 687 (1994) ("Interpretation and enforcement of professional rules similarly remain under professional control."). For a brief history and description of the use of bar committees to render advice on legal ethics, see Finman & Schneyer, supra note 6, at 69 n.4 and sources cited therein. See also Whitney A. McCaslin, Empowering Ethics Committees, 9 Geo. J. Legal Ethics 959, 964-66 (1996) (discussing the history of the ABA Canons of Professional Ethics from their adoption in 1908).
53. The following provides a brief history of the Standing Committee on Ethics and Professional Responsibility. The Standing Committee on Professional Ethics of the American Bar Association was created in 1913 to: [C]ommunicate to the Association such information as it may collect respecting the activity of state and local bar associations in respect to the ethics of the legal profession, and it may from time to time make recommendations on the subject to the Association. In 1919 the name of the Committee was changed to the Committee on Professional Ethics and Grievances and "grievances against members of the Bar" were added to the category of information to be collected and communicated to the Association. In 1922 the purpose of the Committee on Professional Ethics and Grievances was amended to authorize the Committee to "express its opinion concerning professional conduct, and particularly concerning the application of the tenets of ethics thereto . . . ." The Committee was also authorized to hear charges of professional misconduct against members of the Association. In 1931 the Committee's authorization was extended to include expression of its opinion concerning proper judicial conduct and the investigation of charges of judicial misconduct against Association members. A Judges Advisory Committee of the American Bar Association was established in 1946 "to consult with the Committee on Professional Ethics and Grievances on all questions involving the Canons of Judicial Ethics." In 1958 the Committee on Professional Ethics and Grievances was separated into two committees: a Committee on Professional Ethics and a Committee on Professional Grievances. The Committee on Professional Ethics retained the authority to express its opinion concerning proper professional and judicial conduct. The 1958 by-law relating to the Committee on Professional Ethics described the jurisdiction of the Committee as follows: 1. Formulate and recommend standards of ethics and conduct in the practice of law as a profession; consider the Canons of Ethics of the legal profession and of judicial officers; and make recommendations for amendments to or clarifications of the Canons of Ethics when they may appear to be advisable. 2. Upon request, advise or assist state and local bar associations in their activities in respect to the interpretation of the Canons of Ethics; and furnish information and make recommendations thereon to the House of Delegates or the Board of Governors. 3. Be authorized, when consulted by any member of the bar or by any officer or committee of a state or local bar association, to express its opinion concerning proper professional or judicial conduct, but these opinions shall not deal with questions of judicial decision or judicial discretion, and shall not be given until submitted to the members of the Committee and approved by a majority thereof. 4. Be authorized to adopt such rules as it may deem desirable concerning the methods and procedure to be used in expressing opinions; such rules not to become effective until approved by the Board of Governors. The rules may be altered or abrogated by the House of Delegates. In 1969, the American Bar Association adopted the Model Code of Professional Responsibility to replace the Canons of Professional Ethics. In 1972 the Code of Judicial Conduct superseded the Canons of Judicial Ethics. The Committee was renamed the Standing Committee on Ethics and Professional Responsibility in 1971. Although the jurisdictional statement of the Committee [was] changed in July, 1985 to reflect the adoption of the Model Rules of Professional Conduct in August, 1983, its jurisdictional statement [prior to July, 1985] read[]: The Standing Committee on Ethics and Professional Responsibility, which consists of eight members, shall: 1. [B]y the concurrence of a majority of its members, express its opinion on proper professional or judicial conduct, either on its own initiative or when requested to do so by a member of the bar or by an officer or a committee of a state or local bar association, except that an opinion may not be issued on a question that is pending before a court; 2. periodically publish its issued opinions to the legal profession in summary or complete form and, on request, provide copies of opinions to members of the bar; 3. on request, advise or otherwise help state or local bar associations in their activities relating to the interpretation of the Model Code of Professional Responsibility and the Code of Judicial Conduct; 4. recommend appropriate amendments to or clarifications of the Model Code of Professional Conduct or the Code of Judicial Conduct, if it considers them advisable; and 5. adopt such rules as it considers appropriate relating to the procedures to be used in expressing opinions, effective when approved by the Board of Governors. ABA Comm. on Ethics and Professional Responsibility, Formal and Informal Ops. 1-3 (1985)
54. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
55. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342,
56. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
57. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
58. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
59. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
60. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
61. The ABA amended the Model Code in 1974 to explicitly state that if a lawyer in a firm was disqualified, then so was the lawyer's firm. DR 5-105(D) provided that "[i]f a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other lawyer affiliated with him or his firm may accept or continue such employment." Model Code of Professional Responsibility DR 5-105(D) (1974). This amendment created a problem for law firms that practiced before government agencies. Since DR 9-101(B) provided that "[a] lawyer shall not accept private employment in a matter in which he had substantial responsibility while he was a public employee," Model Code of Professional Responsibility DR 9-101(B) (1970), the amended provision threatened the revolving door that enabled lawyers to move temporarily from private practice to a government agency and then return to their law firms to practice law in the area which was regulated by that government agency. To accommodate the interests of lawyers in preserving the revolving door, the Committee issued Formal Opinion 75-342, effectively amending DR 5-105(D) and creating a special exception for former government lawyers. See ABA Comm. on Ethics and Professional Responsibility, Formal Op. 342 (1975) ("Formal Opinion 75-342"). "The committee noted that enforcement of DR 5-105(D) would expose firms that hire government attorneys to the risk of losing clients and revenues because of firm disqualification and ultimately might hamper government recruitment of attorneys and limit the career mobility of those in government." G. Paul Bollwerk, III, Conflicts of Interest and the Former Government Attorney, 65 Geo. L.J. 1025, 1046 (1977) (citing Formal Opinion 75-342). This justification illustrates the masking of self-interest in the garb of public interest. But cf. Note, Unchanging Rules in Changing Times: The Canons of Ethics and Intra-firm Conflicts of Interest, 73 Yale L.J. 1058 (1964) (discussing the existing disparity between the firm disqualification rule and its disregard in practice). The duty of client loyalty - the ostensible public interest so ubiquitously cited by the bar in support of its positions on keeping lawyer-assisted fraud confidential - can apparently be jettisoned when it impinges upon lawyers' self-interest. In a recent example, the Committee gave its approbation to the practice of representing a client in suing a subsidiary of another company for damages while at the same time representing the parent corporation - an obvious conflict of interest. ABA Comm. on Ethics and Professional Responsibility, Formal Op. 390 (1995). Writing in dissent, Lawrence Fox (the primary author of Opinion 94-389) noted that the ABA's authorization of this practice enables "the lawyer who is suing the subsidiary of [the] parent client . . . literally [to] put[] her hand in her client's pocketbook." Id. This opinion contorted a rule "designed to protect clients into one that can be used to permit lawyers [acting in their financial self-interest] freely, and without consultation, to take positions which destroy traditional notions of client loyalty and client concern." Id. For an example of an advisory opinion by a state bar association ethics committee that is blatantly and expressly self-interested, see N.Y. State Bar Ass'n Comm. on Professional Ethics, Op. 570 (1985) ("Opinion 570"). Opinion 570 was intended to allow lawyers to circumvent the protection afforded clients by DR 9-102(A) by allowing lawyers to deposit advance fee payments into their general accounts rather than their trust accounts. Under DR 9-102(A), if there is a fee dispute as to funds on deposit in a trust account, the lawyer may not withdraw the funds until the dispute is resolved. Under Opinion 570, the lawyer can choose to place the funds beyond the reach of DR 9-102(A). In Lester Brickman, The Advance Fee Payment Dilemma: Should Payments Be Deposited to the Client Trust Account or to the General Office Account?, 10 Cardozo L. Rev. 647 (1989), Opinion 570 is described as "indefensible . . . [because it] is inconsistent with the text of the Code of Professional Responsibility and the Rules of Professional Conduct . . . [and because] it seeks to replace fiduciary law with commercial law to govern the attorney-client relationship." Id. at 675; see also Brief of Amicus Curiae in Opposition to Respondent-Appellant's Appeal at 19 n.3, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994) (describing Opinion 570 as taking a "professionally parochial position"), reprinted in Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers: A Response to Critics of the Absolute Ban, 64 U. Cin. L. Rev. 11, 65 n.3 (1995) [hereinafter Brickman & Cunningham, A Response].
62. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
63. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
64. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
65. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
66. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
67. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
68. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
69. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
70. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
71. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
72. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
73. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
74. See Richard A. Epstein, The Political Economy of Product Liability Reform, 78 AEA Papers and Proceedings 311, 313 (1988) (stating that "[o]bviously, the plaintiffs bar has a vital interest in preserving that system of laws which maximizes its own welfare" and that "[l]ess obviously, perhaps, the defendant's bar has closely parallel interests"); Richard A. Epstein, The Unintended Revolution in Product Liability Law, 10 Cardozo L. Rev. 2193, 2219 (1989) (arguing that the defense bar's interest in not limiting liability is as strong as the plaintiff bar's interest because if whole classes of claims imposing retroactive liability were removed, the business of defending clients on the merits of individual cases would no longer be of any consequence); see also Amy Stevens, Corporate Clients, Some Lawyers Differ on Litigation Reform, Wall St. J., Mar. 17, 1995, at B6 (stating that defense lawyers oppose tort reform because "legislative change could deliver a big blow to the bottom line"). The consonance of interests of plaintiff and defendant tort lawyers is nowhere better illustrated than in a recent letter from the presidents-elect of the California and Los Angeles trial lawyers associations to California business lawyers soliciting funds for a campaign to oppose two initiatives which appeared on the March 1996 California ballot. Letter from Mary E. Alexander, President-Elect, Consumer Attorneys of California & Bruce M. Brusavich, President-Elect, Consumer Attorneys Ass'n of Los Angeles, to Fellow Attorneys [hereinafter Letter from Alexander & Brusavich] (on file with the Fordham Law Review). One of the initiatives would have created a true no-fault system for automobile injury compensation and the other would have limited contingency fees when there are early settlement offers. See, e.g., Robert Stowe England, Ambulance Chaser Alert: Next March, California Voters Hope to Kick Off a Nationwide Movement to Rein in Lawyers' Fees, Fin. World, Oct. 10, 1995, at 28 (discussing the no-fault and contingency fee initiatives); Christopher J. Farley, Fed Up with Lawyers, Time, Jan. 8, 1996, at 36, 36 (discussing both initiatives as measures to control automobile accident litigation); Tim W. Ferguspn, Tort Retort, Forbes, Feb. 12, 1996, at 47, 47 (discussing three tort reform initiatives that were to appear on California's presidential primary ballot); Margaret A. Jacobs, Business Groups, Lawyers Face Off over California Litigation Reform, Wall St. J., Jan. 15, 1996, at B3 (describing the competing interests of businesses and plaintiff lawyers); Stuart Taylor, Jr., Tort Lawyers vs. Consumers, Legal Times, Jan. 29, 1996, at 23 (arguing in support of the propositions). With regard to the no-fault initiative, the fund-raising letter stated that "[N]o one will be handling automobile cases if this passes!" Letter from Alexander & Brusavich, supra. The letter also stated that the contingency fee limitation will "drastically reduc[e] the number of [tort] filings. This will effect [sic] everyone in the tort system!" Id.; see also Dan Morain, Lawyers' Campaign for Funds Draws Fire, L.A. Times, Dec. 1, 1995, at A3 (describing the letter as a statewide fund-raising appeal to raise $10 million to fight three "anti-lawyer" initiatives on the March ballot). The letter then went on to indicate several ways in which contributions by business lawyers could be laundered to avoid both California campaign contribution disclosure laws and disclosure to their clients. Letter from Alexander & Brusavich, supra. The letter pointed out that non-"public record" contributions made directly to the trial lawyers association will also be helpful and that while the trial lawyers may not use that money "directly to fight the initiative . . . it can be used for [so-called] general expenses," and "may [also] be tax deductible." Id. In addition to being opposed by plaintiff lawyers, the California initiatives were also opposed by lawyers, for insurance companies because they "are equally concerned about . . . [taking] thousands of cases out of court." Mark Thompson, Opponents Unite over Tort Reform, L.A. Daily J., Jan. 29, 1996, at 3. The fund raising efforts among the defense bar raised at least $600,000. Dan Morain, Businesses Duel with Lawyers on Three Measures, L.A. Times, Mar. 24, 1996, at B1, B2. The consonance of interests of plaintiff and defendant tort lawyers in preserving and extending the quantum of tort litigation is further illustrated by another fund raising letter sent out by the trial lawyers in their effort to defeat the California initiatives. A similar letter from Deborah Wolfe, President of the Consumer Attorneys of San Diego, was sent to "dozens of firms that provide services to lawyers [including] court reporters, expert witnesses, and those who copy and deliver documents and summonses."
75. Formal Op. 94-389, supra note 1.
76. Id.
77. As the principal author of the Opinion elsewhere noted: "This is no time to undermine the use of contingent fees . . . ." Lawrence J. Fox, Yes: Lawyers Should Have the Benefit of the Bargain, A.B.A. J., July 1995, at 44, 44. The blatancy of the statement of self-interest at the beginning of Formal Opinion 94-389 is confirmed by a similarly explicit appeal to self-interest. As a member of the Bar Association of the City of New York Committee on Professional and Judicial Ethics, I drafted a proposed ethics opinion regarding the use of contingency fees similar to the one set forth herein as Appendix B. The opposing argument by one of the two Committee members who were contingency fee lawyers began by noting - as stated in Formal Opinion 94-389 - that contingency fees are not limited to use by personal injury plaintiff lawyers but instead are increasingly utilized by other lawyers as well. The speaker then went on to state that any (Committee) advisory opinion that adversely affected contingency fee lawyers would similarly disadvantage other lawyers, including Committee members. This appeal to self-interest did not fall on deaf ears. Not a single Committee member, other than myself as the proponent, argued that there was any need for applying ethical constraints to contingency fees.
78. See W. John Moore, Identity Crisis, Nat'l J., July 1, 1995, available in LEXIS, Nexis Library, NTLJNL File. The ABA has increasingly injected itself into political issues. At its 1995 mid-year meeting, the House of Delegates adopted positions on school prayer, welfare benefits, and securities litigation, leading some to conclude "that the ABA operates just like any other trade association on Capitol Hill, taking positions that reflect its members' financial interests. The ABA . . . opposes an overhaul of the civil justice system for purely pecuniary reasons . . . [because] 'too many lawyers are making too much money from it.'" Id. (quoting Theodore B. Olson, a lawyer in Gibson, Dunn & Crutcher's Washington office); see
79. Judge John M. Walker, The Politicization of Bar Associations, Speech Delivered to New York City Chapter of the Federalist Society (May 16, 1990), reprinted in The ABA in Law and Social Policy: What Role? 115 (1994);
80. see also William G. Ross, The Supreme Court Appointment Process: A Search for a Synthesis, 57 Alb. L. Rev. 993, 1025-26 (1994) (discussing the ABA's controversial role as a special interest group).
81. As the late Chief Justice Warren Burger noted: In recent years, the ABA has adopted formal policy positions on abortion, affirmative action, AIDS, funding for the arts, gun control, homelessness, nuclear proliferation, parental leave, sexual orientation, health care and a wide variety of other social issues. At the same time, the ABA has done little or nothing to attack the root causes of the public's loss of confidence in the legal profession and the judicial system. Warren E. Burger, The ABA Has Fallen Down on the Job, Wall St. J., Aug. 10, 1994, at A9.
82. The resolution favored requiring mandatory motor vehicle bodily injury and property damage coverage, mandatory uninsured motorist coverage, and mandatory first party medical and economic loss coverage. See Memorandum from Leo J. Jordan to Peter B. Prestley, Chair of the ABA Section of Tort and Insurance Practice 1-2 (Jan. 29, 1993) (on file with the Fordham Law Review). Prestley, the current chairman of the ABA Section of Torts and Insurance Practice ("TIPS"), had asked Jordan, a prior chairman of TIPS, to review a proposal to give motorists the choice of whether to purchase first party personal injury protection as an alternative to current insurance practice (which bundles together economic loss coverage with pain and suffering coverage).
83. Id. at 4.
84. See ABA TIPS Spring Meeting Council Minutes, April 16-17, 1994, at 14 (on file with the Fordham Law Review).
85. Trevor Armbrister, This Could Slash Your Car Insurance Bill, Reader's Dig., Feb. 1995, at 181, 183-84 (quoting the report commissioned by the Committee).
86. Jeffrey O'Connell et al., The Comparative Costs of Allowing Consumer Choice for Auto Insurance in All Fifty States, 55 Md. L. Rev. 160 (1996) [hereinafter O'Connell, Consumer Choice]. The study is based on 1987 and 1992 auto accident data collected by the Insurance Research Council. Id. at 171 n.61.
87. Jeffrey O'Connell et al., The Comparative Costs of Allowing Consumer Choice for Auto Insurance in All Fifty States, 55 Md. L. Rev. 160 (1996) [hereinafter O'Connell, Consumer Choice]. The study is based on 1987 and 1992 auto accident data collected by the Insurance Research Council. Id. at 171 n.61.
88. See supra note 31.
89. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2 (finding a 58.6% savings for drivers who switch to no-fault if 100% of drivers switch, and a 63.4% savings if 50% of drivers switch); see also Allan F. Abrahamse & Stephen J. Carroll, The Effects of a Choice Auto Insurance Plan on Insurance Costs (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at xiv (finding that adoption of a choice plan rather than a tort system would save drivers 40% of the cost of personal injury coverage). For example, California drivers who switched to no-fault would save 62.4% on their personal injury premiums if all drivers switched, or save 65.4% if half of all drivers switched. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2.
90. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2 (finding a 58.6% savings for drivers who switch to no-fault if 100% of drivers switch, and a 63.4% savings if 50% of drivers switch); see also Allan F. Abrahamse & Stephen J. Carroll, The Effects of a Choice Auto Insurance Plan on Insurance Costs (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at xiv (finding that adoption of a choice plan rather than a tort system would save drivers 40% of the cost of personal injury coverage). For example, California drivers who switched to no-fault would save 62.4% on their personal injury premiums if all drivers switched, or save 65.4% if half of all drivers switched. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2.
91. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2 (finding a 58.6% savings for drivers who switch to no-fault if 100% of drivers switch, and a 63.4% savings if 50% of drivers switch); see also Allan F. Abrahamse & Stephen J. Carroll, The Effects of a Choice Auto Insurance Plan on Insurance Costs (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at xiv (finding that adoption of a choice plan rather than a tort system would save drivers 40% of the cost of personal injury coverage). For example, California drivers who switched to no-fault would save 62.4% on their personal injury premiums if all drivers switched, or save 65.4% if half of all drivers switched. O'Connell, Consumer Choice, supra note 41, at 182 tbl.2.
92. O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 31.4% premium savings for drivers who switched to no-fault, assuming 50% of all drivers switched); see also Abrahamse & Carroll, supra note 43, at xiv (stating that because personal injury coverage accounts for nearly half of total auto insurance compensation costs, "a 60-percent reduction in the costs of personal injury coverage should translate into a roughly 30-percent reduction in a driver's total auto insurance premium"). Under a pure no-fault insurance system the average California driver's insurance premium would be reduced about 34% if the mandatory personal injury protection (PIP) coverage were $50,000, or about 25% if the mandatory PIP coverage were $1 million. See Stephen Carroll & Allan Abrahamse, The Effects of a Proposed No-Fault Plan on the Costs of Auto Insurance in California, Issue Paper (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at 3 [hereinafter Carroll & Abrahamse, Issue Paper]; see also O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 34.5% reduction, assuming 50% of all drivers switched to no-fault).
93. O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 31.4% premium savings for drivers who switched to no-fault, assuming 50% of all drivers switched); see also Abrahamse & Carroll, supra note 43, at xiv (stating that because personal injury coverage accounts for nearly half of total auto insurance compensation costs, "a 60-percent reduction in the costs of personal injury coverage should translate into a roughly 30-percent reduction in a driver's total auto insurance premium"). Under a pure no-fault insurance system the average California driver's insurance premium would be reduced about 34% if the mandatory personal injury protection (PIP) coverage were $50,000, or about 25% if the mandatory PIP coverage were $1 million. See Stephen Carroll & Allan Abrahamse, The Effects of a Proposed No-Fault Plan on the Costs of Auto Insurance in California, Issue Paper (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at 3 [hereinafter Carroll & Abrahamse, Issue Paper]; see also O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 34.5% reduction, assuming 50% of all drivers switched to no-fault).
94. O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 31.4% premium savings for drivers who switched to no-fault, assuming 50% of all drivers switched); see also Abrahamse & Carroll, supra note 43, at xiv (stating that because personal injury coverage accounts for nearly half of total auto insurance compensation costs, "a 60-percent reduction in the costs of personal injury coverage should translate into a roughly 30-percent reduction in a driver's total auto insurance premium"). Under a pure no-fault insurance system the average California driver's insurance premium would be reduced about 34% if the mandatory personal injury protection (PIP) coverage were $50,000, or about 25% if the mandatory PIP coverage were $1 million. See Stephen Carroll & Allan Abrahamse, The Effects of a Proposed No-Fault Plan on the Costs of Auto Insurance in California, Issue Paper (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at 3 [hereinafter Carroll & Abrahamse, Issue Paper]; see also O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 34.5% reduction, assuming 50% of all drivers switched to no-fault).
95. O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 31.4% premium savings for drivers who switched to no-fault, assuming 50% of all drivers switched); see also Abrahamse & Carroll, supra note 43, at xiv (stating that because personal injury coverage accounts for nearly half of total auto insurance compensation costs, "a 60-percent reduction in the costs of personal injury coverage should translate into a roughly 30-percent reduction in a driver's total auto insurance premium"). Under a pure no-fault insurance system the average California driver's insurance premium would be reduced about 34% if the mandatory personal injury protection (PIP) coverage were $50,000, or about 25% if the mandatory PIP coverage were $1 million. See Stephen Carroll & Allan Abrahamse, The Effects of a Proposed No-Fault Plan on the Costs of Auto Insurance in California, Issue Paper (RAND Inst. for Civ. Just., Santa Monica, Cal.), Mar. 1995, at 3 [hereinafter Carroll & Abrahamse, Issue Paper]; see also O'Connell, Consumer Choice, supra note 41, at 172 tbl.1 (finding a 34.5% reduction, assuming 50% of all drivers switched to no-fault).
96. O'Connell, Consumer Choice, supra note 41, at 172 tbl.1. California drivers who switched to no-fault would save about $3.6 billion if 100% of all drivers switched, id., or save about $3.8 billion if 50% of all drivers switched (based on calculations using the data provided in the Consumer Choice study). Id. at 182 tbl.2; see also Carroll & Abrahamse, Issue Paper, supra note 44, at 3 nn.6-7 (finding a savings of about $3.3 billion under a mandatory $50,000 PIP coverage option, and a savings of about $2.4 billion under a mandatory $1 million PIP coverage option).
97. As a consequence of excess medical claims, about $4 billion in health care costs were incurred in 1993 at a cost of $9 to $13 billion to insurers in compensation for noneconomic loss and other costs. If insurers passed these costs onto insurance premiums, then excess medical claims cost insurance purchasers $13 to $18 billion in 1993. Stephen Carroll et al., The Costs of Excess Medical Claims for Automobile Personal Injuries, Documented Briefing (RAND Inst. for Civ. Just., Santa Monica, Cal.), 1995, at 3, 23.
98. RAND estimates that 35% to 42% of claimed medical costs in automobile accident claims generated in 1993 were excessive. Id. Excess medical claiming includes claims "based on staged or nonexistent activities, claims for nonexistent injuries when the accidents were real, and buildup of claims for real injuries to leverage a settlement from the insurance company." Id. at 4.
99. The conclusion that attorneys are substantially and even wholly responsible for these increases in medical costs seems inescapable. Consider the following example. After Massachusetts amended its no-fault law in 1988 to raise the threshold level of economic damages for bringing a lawsuit from $500 to $2000, the median number of claims-related medical treatment visits per claimant rose immediately from 13 to 30. See Sarah S. Marter & Herbert I. Weisberg, Medical Expenses and the Massachusetts Automobile Tort Reform Law: A First Review of 1989 Bodily Injury Liability Claims, 10 J. Ins. Reg. 462, 463, 488-89 tbl.13 (1992).
100. That is why the California plaintiff bar found the defense bar a kindred spirit in opposing a no-fault auto choice plan. See supra note 31.
101. Consider, for example, that 37.11% of Los Angeles County drivers are uninsured. See California Dep't of Insurance Statistical Analysis Bureau, Commissioner's Report on Underserved Communities LA-7 (1995).
102. See Armbrister, supra note 40, at 183-84.
103. See Jeffrey O'Connell, Blending Reform of Tort Liability and Health Insurance: A Necessary Mix, 79 Cornell L. Rev. 1303, 1311 (1994) ("The plaintiffs' personal injury bar has certainly long shown great political strength and sophistication in protecting its interest, especially in developing powerful ties with the Democratic Party." (footnotes omitted)). Professor O'Connell sets forth the following anecdote: A Washington lawyer-lobbyist, formerly a power in his home state's Democratic party, went to one of his state's Democratic senators for whom he had raised substantial amounts of campaign money. The lobbyist wanted the Senator to include an amendment to a federal product liability bill favorable to a manufacturer in their home state. The Senator replied that he couldn't touch anything that curbs tort law. He explained that although he gets a lot of money from business interests, those interests would desert him in a moment, and give three or four times what they give him, to a really promising Republican challenger. On the other hand, the plaintiffs' bar, he said, is with him first, last and always. And their only price is no interference with personal injury law. So, he said, much as he'd like to help, he'd have to pass. Id. at 1312 n.33 (citation omitted). The political dimension of efforts to curb contingency fee abuses is even more manifest. One such effort that has elicited a striking political response is a proposal to require plaintiff lawyers to determine whether an alleged responsible party will offer to settle a tort claim. If such an early settlement offer is forthcoming, then under the proposal the lawyer is precluded from charging a standard contingency fee and is instead limited to a negotiated hourly rate for the time spent in compiling the facts needed to set forth the demand. The attorney may charge any contracted-for contingency fee as to any recovery obtained in excess of the early offer. This "early offer" proposal was set forth in a monograph included with the Letter sent to the Committee. See infra note 60. When the proposal, which was structured to be adopted by state supreme courts as amendments to ethics rules regulating lawyers, had garnered considerable public attention and support, see Horowitz, supra note 8, at 173 & n.3, ATLA took close notice. ATLA attempted to obtain the enactment of federal legislation banning states from adopting the proposal. This "head them off at the pass attempt" culminated in the health care bill introduced by Majority Leader George Mitchell in the waning days of the health care debate. See S. 2357, 103d Cong., 2d Sess. (1994) ("A Bill To Achieve Universal Health Insurance Coverage"). In a section dealing with medical malpractice claims, the bill, using indirect and obscure language, effectively precluded states from adopting the early offer mechanism that was the core of the contingency fee reform proposal. See id. at § 5402. This provision was inserted into the Mitchell bill by ATLA's chief lobbyist, Thomas Boggs. Conversation between Jeffrey O'Connell and Thomas Boggs (Oct. 25, 1994).
104. Formal Op. 94-389, supra note 1.
105. This assertion is further belied by the Committee's boarding-house reach to criticize and reject a proposed amendment of ethics and court rules regulating contingency fees even though the proposed amendment was not before the Committee. See infra notes 60-65 and accompanying text.
106. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
107. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
108. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
109. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs.
110. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
111. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
112. The Manhattan Institute is a New York-based public policy group, of the type popularly described today as a "think tank." The Institute describes itself as a nonpartisan, independent research and educational organization supported by tax-deductible gifts from individuals, foundations and corporations. The Institute's goal is to develop and encourage public policies at all levels of government which will allow individuals the greatest scope for achieving their potential, both as participants in a productive economy and as members of a functioning society. Manhattan Inst., Review of Programs 1 (1996) [hereinafter Review of Programs]. Though not as well known as other think tanks such as the American Enterprise Institute, Brookings Foundations, Heritage Foundation, or the RAND Institute, the Manhattan Institute has had a significant impact on public policy debate in the areas of welfare, education, and civil justice. More than 40 books have been commissioned and funded by the Institute since 1979, including: Thomas Sowell, Markets and Minorities (1981); Roberta S. Karmel, Regulation by Prosecution: The Securities and Exchange Commission vs. Corporate America (1982); Charles Murray, Losing Ground: American Social Policy 1950-1980 (1984); Charles Murray, In Pursuit of Happiness and Good Government (1988); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1988); Peter W. Huber, Galileo's Revenge: Junk Science in the Courtroom (1991); Walter K. Olson, The Litigation Explosion (1991); and Seymour Fliegel with James Macguire, Miracle in East Harlem: The Fight for Choice in Public Education (1993). See Review of Programs, supra, at 1-2. Among the innovative ideas that its fellows have spawned, some of the most notable include exposure of the dependency-producing effects of the welfare system, school vouchers and other educational choice programs that empower parents and shift authority from centralized school bureaucracies, and the concept of "junk science." See id. at 1. Though the Institute is generally associated with conservative policies, it has received favorable reviews from both conservative and liberal journals. See, e.g., James Traub, Intellectual Stock Picking, The New Yorker, Feb. 7, 1994, at 36, 39 (stating that the Institute has gained respect from a city usually thought of as liberal).
113. See supra note 2 (listing names of the twenty-six Letter signatories). In attempting to justify labeling the request as coming from the Manhattan Institute, some in the ABA have pointed out that the return address on the letterhead was the same as a Washington, D.C. branch office of the Manhattan-based Manhattan Institute. The argument is without merit. Because the Letter was to be mailed, it had to contain a return address. Michael Horowitz, the principal drafter and a signatory of the Letter, was in February 1994 a senior fellow with the Manhattan Institute in a Washington, D.C. office. Horowitz had the Letter typed on his office stationary, which listed his office address. The words "Manhattan Institute" simply did not appear. Even had the letterhead stated "Manhattan Institute," the ABA's labeling of the request for ethical guidance would still have been transparently political. See infra text accompanying note 58. Consider if the Letter with its 26 signatories had been sent on my letterhead and included my affiliation. It would not then have been properly identified, and no one would have identified it, as coming from the Cardozo Law School any more than if other letterheads had been used, it would have been identified as coming from the Virginia Law School or from Cravath, Swaine & Moore, or from any of the 22 other affiliations of the signatories.
114. See History of Standing Committee, supra note 29, at 3.
115. In addition to political considerations, the role of personal pique in the drafting of Formal Opinion 94-389 cannot be dismissed. At the time the Letter requesting ethical guidance was sent to the Committee, a story appeared on the front page of the New York Times commenting on the Letter and a separate proposed change in the ethics rules. See Peter Passell, Windfall Fees in Injury Cases Under Assault, N.Y. Times, Feb. 11, 1994, at Al, B18. That story quoted an unnamed source: '"It's no stretch to go from the current ethics code to more precise limits on contingency fees,' said one lawyer who follows the work of the ethics committee closely and knows the current members well. "There's a good chance they'll accept the idea.'" Id. In a private conversation between the author and Lawrence Fox, a principal author of Formal Opinion 94-389, Fox expressed outrage about the news article and especially the quoted statement. He indicated that it reflected badly on the Committee's image by at least implying that the Committee was a dupe of the proponents of tort reform. Conversation with Lawrence Fox, at 20th Nat'l Conf. on Professional Responsibility, Naples, Fla. (May 27, 1994).
116. In addition to political considerations, the role of personal pique in the drafting of Formal Opinion 94-389 cannot be dismissed. At the time the Letter requesting ethical guidance was sent to the Committee, a story appeared on the front page of the New York Times commenting on the Letter and a separate proposed change in the ethics rules. See Peter Passell, Windfall Fees in Injury Cases Under Assault, N.Y. Times, Feb. 11, 1994, at Al, B18. That story quoted an unnamed source: '"It's no stretch to go from the current ethics code to more precise limits on contingency fees,' said one lawyer who follows the work of the ethics committee closely and knows the current members well. "There's a good chance they'll accept the idea.'" Id. In a private conversation between the author and Lawrence Fox, a principal author of Formal Opinion 94-389, Fox expressed outrage about the news article and especially the quoted statement. He indicated that it reflected badly on the Committee's image by at least implying that the Committee was a dupe of the proponents of tort reform. Conversation with Lawrence Fox, at 20th Nat'l Conf. on Professional Responsibility, Naples, Fla. (May 27, 1994).
117. In responding to an initiative sponsored by the Alliance to Revitalize California to reform contingency fees, see supra note 31, the trial lawyer group similarly sought to divert attention from the merits of the initiative by seeking to instead focus attention on the role of the Manhattan Institute, a group it implied had some hidden nefarious political agenda. Wayne McClean, president of the California trial lawyer group, referring to the contingency fee initiative, stated: "This prime example [the initiative] . . . is the brainchild of Reagan/Bush pointman Lester Brinkman [sic] of the Manhattan Institute, a right-wing think tank based in New York." Wayne McClean, Stepping Up to the Plate, Forum, July-Aug. 1995, at 4, 4. With the exception of the location of the Manhattan Institute, each and every "factual" assertion in the quoted sentence is false. ATLA President Barry Nace attempted to discredit the Letter on the basis that a number of the signatories "received their law degrees from the University of Chicago . . . [which] has received millions of dollars from the Olin Foundation in the past few years to develop a law and economics program."
118. Barry J. Nace, President's Page: The "Legal Scholars" Speak on Contingency Fees, Trial, Apr. 1994, at 7, 7. This criticism is ludicrous. See, e.g., Horowitz, supra note 8, at 183 (describing Nace's attempt to discredit the signatories as "near-hysterical"). This is one criticism that the ABA has not joined. Another tactic of the trial bar is to couple the claim that contingency fee reform is an evil to be avoided because it is on the Manhattan Institute's agenda with the erroneous claim that the Institute is in reality a "front" organization for insurance companies. For example, during audience participation following a recent presentation I made critiquing Opinion 94-389 and advocating an ethics regime of the type set forth in the alternative ethics opinion included as Appendix B to this Article, someone from the audience, identifying herself as a member of the California Bar, asked whether or not it was true that I was simply advocating the position of the Manhattan Institute and was not the Institute merely a front for the insurance industry. 21st Nat'l Conf. on Professional Responsibility in San Diego, Cal., A.B.A. Plenary Session (June 2, 1995). Virtually all of the attendees at the conference were either bar counsel, law school teachers and lawyers representing lawyers in disciplinary proceedings. The speaker from the audience was none of these. It seemed apparent that her sole purpose in attending was to state - in leading question form - what is reported above. The strategy of claiming that insurance companies are behind all tort reform efforts permeates the political discourse of tort reform. It is instructive to note, however, that just as plaintiff and defense lawyer financial interests converge on maintaining a maximum amount of litigation, see supra note 31, liability insurance company interests are basically similar. Insurance companies earn money by investing premiums charged for assuming risk. The quantum of risk imposed under the tort system creates the demand for risk insurance. The greater the quantum of risk, the greater the premiums that may be charged. Conversely, a lowered quantum of risk results in reduction of insurance company premiums. Thus, a leading liability insurer, the Aetna Company, has come out in opposition to the "early offer" contingency fee reform proposal. See Judyth Pendell, Fees in the Marketplace, N.Y. Times, Mar. 11, 1994, at A30 (Letter to the Editor). The "early offer" proposal is described in note 52, supra, and note 60, infra. Moreover, insurance companies opposed the California tort reform initiatives described above. See Thompson, supra note 31, at 3.
119. Barry J. Nace, President's Page: The "Legal Scholars" Speak on Contingency Fees, Trial, Apr. 1994, at 7, 7. This criticism is ludicrous. See, e.g., Horowitz, supra note 8, at 183 (describing Nace's attempt to discredit the signatories as "near-hysterical"). This is one criticism that the ABA has not joined. Another tactic of the trial bar is to couple the claim that contingency fee reform is an evil to be avoided because it is on the Manhattan Institute's agenda with the erroneous claim that the Institute is in reality a "front" organization for insurance companies. For example, during audience participation following a recent presentation I made critiquing Opinion 94-389 and advocating an ethics regime of the type set forth in the alternative ethics opinion included as Appendix B to this Article, someone from the audience, identifying herself as a member of the California Bar, asked whether or not it was true that I was simply advocating the position of the Manhattan Institute and was not the Institute merely a front for the insurance industry. 21st Nat'l Conf. on Professional Responsibility in San Diego, Cal., A.B.A. Plenary Session (June 2, 1995). Virtually all of the attendees at the conference were either bar counsel, law school teachers and lawyers representing lawyers in disciplinary proceedings. The speaker from the audience was none of these. It seemed apparent that her sole purpose in attending was to state - in leading question form - what is reported above. The strategy of claiming that insurance companies are behind all tort reform efforts permeates the political discourse of tort reform. It is instructive to note, however, that just as plaintiff and defense lawyer financial interests converge on maintaining a maximum amount of litigation, see supra note 31, liability insurance company interests are basically similar. Insurance companies earn money by investing premiums charged for assuming risk. The quantum of risk imposed under the tort system creates the demand for risk insurance. The greater the quantum of risk, the greater the premiums that may be charged. Conversely, a lowered quantum of risk results in reduction of insurance company premiums. Thus, a leading liability insurer, the Aetna Company, has come out in opposition to the "early offer" contingency fee reform proposal. See Judyth Pendell, Fees in the Marketplace, N.Y. Times, Mar. 11, 1994, at A30 (Letter to the Editor). The "early offer" proposal is described in note 52, supra, and note 60, infra. Moreover, insurance companies opposed the California tort reform initiatives described above. See Thompson, supra note 31, at 3.
120. See Letter, infra app. A, at 299; Lester Brickman et al., Rethinking Contingency Fees 13-83 (1994) [hereinafter Brickman et al., Rethinking Contingency Fees]. The proposal would require tort attorneys to determine whether allegedly, responsible parties were willing to offer to settle before any significant value-adding work had been done by the attorney and prohibiting the attorney in such cases from charging a standard contingency fee against any such early settlement offer. Lester Brickman et al., Rethinking Contingency Fees, supra, at 27-28; see also supra note 52 (describing proposal which requires attorneys to charge an hourly rate instead of a contingency fee when an early settlement offer is forthcoming). The proposal discusses myriad aspects of the nature and purpose of contingency fees, such as: the regulation of contingency fees, including the ethical bases for such fees; the essentiality of the assumption of the risk; the lack of enforcement of ethical rules applicable to contingency fees and the practice of charging standard contingency fees even in cases without meaningful risk; the difficulty of assessing risk ex post to determine the degree of ex ante risk; the need for an alternative enforcement mechanism - an objective, routinely applicable test to determine the legitimacy of a contingency fee; the construction of such a test which uses a defendant's willingness to make an early settlement offer before the expenditure of any significant value-adding effort by an attorney as an indicator of the absence of risk as to that offer; a plan incorporating that test that would require plaintiff attorneys in tort cases to determine at the outset of the representation whether parties alleged to be responsible for an injury are willing to make an early settlement offer and, if so, to limit their fees in such cases to negotiated hourly rates and allow contingency fees to apply to the amount of settlement offer or award in excess of any early settlement offer; and the effects of such a proposal, including higher net payments to claimants, lower health care utilization costs, earlier settlements, faster payments, and projected savings. See Brickman et al., Rethinking Contingency Fees, supra. 61. Letter, infra app. A, at 310.
121. See Letter, infra app. A, at 299; Lester Brickman et al., Rethinking Contingency Fees 13-83 (1994) [hereinafter Brickman et al., Rethinking Contingency Fees]. The proposal would require tort attorneys to determine whether allegedly, responsible parties were willing to offer to settle before any significant value-adding work had been done by the attorney and prohibiting the attorney in such cases from charging a standard contingency fee against any such early settlement offer. Lester Brickman et al., Rethinking Contingency Fees, supra, at 27-28; see also supra note 52 (describing proposal which requires attorneys to charge an hourly rate instead of a contingency fee when an early settlement offer is forthcoming). The proposal discusses myriad aspects of the nature and purpose of contingency fees, such as: the regulation of contingency fees, including the ethical bases for such fees; the essentiality of the assumption of the risk; the lack of enforcement of ethical rules applicable to contingency fees and the practice of charging standard contingency fees even in cases without meaningful risk; the difficulty of assessing risk ex post to determine the degree of ex ante risk; the need for an alternative enforcement mechanism - an objective, routinely applicable test to determine the legitimacy of a contingency fee; the construction of such a test which uses a defendant's willingness to make an early settlement offer before the expenditure of any significant value-adding effort by an attorney as an indicator of the absence of risk as to that offer; a plan incorporating that test that would require plaintiff attorneys in tort cases to determine at the outset of the representation whether parties alleged to be responsible for an injury are willing to make an early settlement offer and, if so, to limit their fees in such cases to negotiated hourly rates and allow contingency fees to apply to the amount of settlement offer or award in excess of any early settlement offer; and the effects of such a proposal, including higher net payments to claimants, lower health care utilization costs, earlier settlements, faster payments, and projected savings. See Brickman et al., Rethinking Contingency Fees, supra. 61. Letter, infra app. A, at 310.
122. See Letter, infra app. A, at 299; Lester Brickman et al., Rethinking Contingency Fees 13-83 (1994) [hereinafter Brickman et al., Rethinking Contingency Fees]. The proposal would require tort attorneys to determine whether allegedly, responsible parties were willing to offer to settle before any significant value-adding work had been done by the attorney and prohibiting the attorney in such cases from charging a standard contingency fee against any such early settlement offer. Lester Brickman et al., Rethinking Contingency Fees, supra, at 27-28; see also supra note 52 (describing proposal which requires attorneys to charge an hourly rate instead of a contingency fee when an early settlement offer is forthcoming). The proposal discusses myriad aspects of the nature and purpose of contingency fees, such as: the regulation of contingency fees, including the ethical bases for such fees; the essentiality of the assumption of the risk; the lack of enforcement of ethical rules applicable to contingency fees and the practice of charging standard contingency fees even in cases without meaningful risk; the difficulty of assessing risk ex post to determine the degree of ex ante risk; the need for an alternative enforcement mechanism - an objective, routinely applicable test to determine the legitimacy of a contingency fee; the construction of such a test which uses a defendant's willingness to make an early settlement offer before the expenditure of any significant value-adding effort by an attorney as an indicator of the absence of risk as to that offer; a plan incorporating that test that would require plaintiff attorneys in tort cases to determine at the outset of the representation whether parties alleged to be responsible for an injury are willing to make an early settlement offer and, if so, to limit their fees in such cases to negotiated hourly rates and allow contingency fees to apply to the amount of settlement offer or award in excess of any early settlement offer; and the effects of such a proposal, including higher net payments to claimants, lower health care utilization costs, earlier settlements, faster payments, and projected savings. See Brickman et al., Rethinking Contingency Fees, supra. 61. Letter, infra app. A, at 310.
123. Formal Op. 94-389, supra note 1.
124. Id.
125. Id. (criticizing the proposal and referring to it as "any proposed rule").
126. Id.
127. Letter, infra app. A, at 305 (footnote omitted).
128. Id. at 307.
129. See Derek Bok, The Cost of Talent 140 (1993) ("[T]he contingent fee is a standard rate that seldom varies with the size of a likely settlement or the odds of prevailing in court.").
130. Letter, infra app. A, at 300-01 n.6.
131. Formal Op. 94-389, supra note 1.
132. Id.
133. See id.
134. Id.
135. Id.
136. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
137. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
138. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
139. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
140. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
141. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
142. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
143. See Lester Brickman, Contingent Fees Without Contingencies: Hamlet Without the Prince of Denmark?, 37 UCLA L. Rev. 29, 76 n.186 (1989) [hereinafter Brickman, Without Contingencies]; Lester Brickman, On the Relevance of the Admissibility of Scientific Evidence: Tort System Outcomes Are Principally Determined by Lawyers' Rates of Return, 15 Cardozo L. Rev. 1755, 1773 (1994) [hereinafter Brickman, Lawyers' Rates of Return]. Illustrative examples of ethically impermissible rates of returns abound. See, e.g., Peter Passell, Challenge to Multimillion-Dollar Settlement Threatens Top Texas Lawyers, N.Y. Times, Mar. 24, 1995, at B6 [hereinafter Passell, Challenge] (quoting Professor Brickman stating that settlements resulting from the Phillips Petroleum case yielded a law firm a "$65 million fee [which] translates into almost $20,000 an hour, a windfall in a case where tens of millions in compensation was a foregone conclusion"); James Pinkerton & Glen Golightly, The Spoils of Tragedy: Profiting on Disaster, Houston Chron., Aug. 2, 1992, at Al (stating that a Texas school bus disaster settlement yielded contingent fee lawyers a fee conservatively estimated to be $25,000 to $35,000 per hour despite the notable fact that most of the attorneys who reaped these riches did not participate in the settlement process, nor did they engage in significant preparatory work for trial, because the issue of liability was clear-cut and the likelihood of a very substantial settlement was overwhelming); Dee Ralles, $84.5 Million Offered in Tainted-Water Case, Ariz. Republic, Feb. 26, 1991, at Al (stating that settlement yielded $33.8 million in attorneys fees [most likely producing rates of return in excess of $30,000 per hour]).
144. See infra text accompanying notes 111-13.
145. See id.
146. Pennsylvania v. Delaware Valley Citizens' Council, 483 U.S. 711, 735-36 (1987) (Blackmun, J., dissenting).
147. Attorney Grievance Comm'n v. Kemp, 496 A.2d 672, 679 (Md. 1985); see also Virginia State Bar Ass'n, LEO 1461 (Apr. 13, 1992), reprinted in Nat'l Rep. on Legal : Ethics and Professional Responsibility, Va. Ops. 21 (1992) ("One purpose of a contingent fee arrangement is to encourage a lawyer to accept a case which carries inherent risks of nonpayment of legal fees. Conversely, matters which carry no such risk to the lawyer are not usually matters in which a contingent fee arrangement is appropriate.").
148. Charles W. Wolfram, Modern Legal Ethics 532 (1986).
149. Model Code, supra note 1, DR 5-103(A)(2); Model Rules, supra note 1, Rule 1.5(c).
150. Model Code, supra note 1, DR 5-103(A)(2); Model Rules, supra note 1, Rule 1.5(c).
151. See Committee on Legal Ethics v. Tatterson, 352 S.E.2d 107, 113 (W. Va. 1986) ("If an attorney's fee is grossly disproportionate to the services rendered and is charged to a client who lacks full information about all of the relevant circumstances, the fee is 'clearly excessive' . . . even though the client has consented to such fee.").
152. See Brickman, Without Contingencies, supra note 30, at 44-47.
153. Id. at 44 n.65; see also Model Code, supra note 1, DR 2-106(A) ("A lawyer shall not enter into an agreement for, charge, or collect an illegal . . . fee.") & DR 1-102(A)(1) ("A lawyer shall not: Violate a Disciplinary Rule."). It is also unethical because by charging for a service - assumption of a substantial fee risk - that was not provided, the lawyer would be "[e]ngag[ing] in conduct involving dishonesty, fraud, deceit, or misrepresentation," id. DR 1-102(A)(4), and therefore would be violating a Disciplinary Rule. Id. DR 1-102(A)(1). This violation would be accentuated if the lawyer additionally misled the client regarding the risk that the lawyer was bearing by failing to disclose - if it were true - that the case would likely be resolved by a settlement without significant effort on the lawyer's part. See Tatterson, 352 S.E.2d at 114 (holding that misrepresenting the difficulty of collection to justify an excessive fee violates Model Code DR 1-102(a)(4)). A lawyer charging for a risk that is not assumed is the functional equivalent of a lawyer charging for hours of work that were not performed. See In re Mercer, 614 P.2d 816, 819 (Ariz. 1980) (en bane) (holding that including workers compensation payment in a contingent fee bill is a charge for which no services were performed and therefore is clearly excessive in violation of DR 2-106); see also In re Weinberg, 511 N.Y.S.2d 293 (App. Div. 1987) (accepting a lawyer's resignation from the bar during investigation by the disciplinary committee into allegations that he attributed personal credit card charges to client expenses); cf. Goeldner v. Mississippi State Bar Ass'n, 525 So. 2d 403, 406-07 (Miss. 1988) (implying that charging for hours not worked violates DR 1-102(A)).
154. Model Code, supra note 1, DR 2-106(A) (1982); see In re Kennedy, 472 A.2d 1317, 1322-23 (Del.) (holding that a 50% contingency fee was "clearly excessive" in a case where client had "clear entitlement" to temporary total disability payments under Workman's Compensation statute), cert. denied, 467 U.S. 1205 (1984); Florida Bar v. Moriber, 314 So. 2d 145, 146-48 (Fla. 1975) (holding that a 33.3% contingency fee was "manifestly improper" in a case where the major asset of an estate passed to the client/beneficiary by operation of the law; "[the case] frankly could have easily been performed by a layman"); In re Gerard, 548 N.E2d 1051, 1057 (Ill. 1989) (finding that a 33.3% contingency fee was "excessive" in a case where an elderly client mistakenly believed that her certificates of deposit had been stolen, and the lawyer 'recovered' them by telephoning the client's banks); In re Teichner, 470 N.E.2d 972, 976-78 (Ill. 1984) (holding that charging a 25% contingency fee for collection of an "unquestioned, routine payment" under a group life insurance policy was "not only in excess of a reasonable fee, but was unconscionable"), cert. denied, 470 U.S. 1053 (1985); Tatterson, 352 S.E.2d at 114 ("In the absence of any real risk, an attorney's purportedly contingent fee which is grossly disproportionate to the amount of work required is a 'clearly excessive fee' within the meaning of Disciplinary Rule 2-106(A)."); 1 Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of Lawyering: A Handbook on The Model Rules of Professional Conduct 74-75 (Supp. 1987) (stating that contingent fees are unreasonable where risk of nonrecovery under given facts is negligible); 1 Stuart M. Speiser, Attorneys' Fees § 2:10, at 94 (1973), cited with approval in People v. Nutt, 696 P.2d 242, 248 (Colo. 1984) (en bane) (holding that a contingent fee should not be fixed so high that it ceases to measure due compensation for professional services and makes lawyer "a partner or proprietor in the lawsuit").
155. Model Rules, supra note 1, Rule 1.5(a).
156. Model Code, supra note 1, DR 2-106(A).
157. Id. DR 2-106(B).
158. The requirement of risk was even more explicit in the ABA Canons of Ethics Canon 13 (1908) (amended 1933), which provided that "[a] contract for a contingent fee where sanctioned by law, should be reasonable under all the circumstances of the case, including the risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness." A.B.A. Rep. 700 (1933) (emphasis added).
159. Contingent fees usually produce a higher fee than a fixed or hourly fee would for the same service. See West Va. State Bar Op. 83, Legal Ethics Case 149 (July 8, 1961), cited in Olavi Maru & Roger L. Clough, Digest of Bar Ass'n Ethics Ops., No. 4711, at 516 (1970) ("Where no agreement exists with regard to a fee, it is proper to charge only a reasonable fee, which will ordinarily be less than a fee fixed on a contingent basis.").
160. As one court noted in reasoning consistent with the text: "If . . . there is little hazard involved in the litigation, the fact that a retainer is on a contingent fee basis may be entitled to little weight." City of Moraine v. Baker, 297 N.E.2d 122, 127 (Ohio Ct. CP. 1971).
161. See In re Reisdorf, 403 A.2d 873, 878 (N.J. 1979). The reasonableness of agreeing on the higher anticipated return must be based on differences between the intrinsic nature of an hourly or fixed fee and a contingent fee. That difference is the contingency, or risk, in properly accepting contingent fee cases.
162. See State Bar of Ga., Advisory Op. 37 (Jan. 20, 1984), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Ga. Ops. 5 (1984) (stating that "[t]he basis on which attorneys are allowed to take contingency fees is that the claim . . . is itself contingent" and that "the taking of a contingency fee for the filling out of routine, undisputed [no-fault] claim forms is unreasonable and a violation of DR 2-106(B)(1) and Standard 31(b)," although "[a]n attorney may charge a reasonable fee for the attorney's time spent in processing a [no-fault] claim"); Oregon State Bar, Desk Book for Lawyers, Op. 282 (Feb. 15, 1975), cited in Olavi Maru, Digest of Bar Ass'n Ethics Ops., No. 9843, at 459 (Supp. 1977) (finding a contingency fee in a no-fault claim proper only "when the companies in fact oppose the claims for benefits and when the services of a lawyer are required to obtain payment of these benefits"); Professional Guidance Comm. of Pa., Inquiry 88-4 (Mar. 21, 1988), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Pa. Ops. 61 (1989) (finding that a "uniform or systematic practice" of charging a fee of "40% or 50% of any recovery, depending upon at what stage a recovery is made" would in many circumstances be "unreasonable" and would violate Rule 1.5 of the Model Rules of Professional Conduct); S.C. Ethics Advisory Comm., Op. 83-03 (1983), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, S.C. Ops. 17 (1983) ("Only . . . [when] there is a true question concerning the availability of [no-fault] coverage should a contingent fee be charged and then, only after the client has been fully informed of all relevant factors."); State Bar of Wis. Ethics Comm. Op. E-82-5 (Jan. 1982), reprinted in Lawyers' Manual on Professional Conduct 801:9106 (A.B.A./B.N.A. 1982). For judicial opinions establishing the above standard, see Brickman et al., Rethinking Contingency Fees, supra note 60, at 54 n.16.
163. See State Bar of Ga., Advisory Op. 37 (Jan. 20, 1984), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Ga. Ops. 5 (1984) (stating that "[t]he basis on which attorneys are allowed to take contingency fees is that the claim . . . is itself contingent" and that "the taking of a contingency fee for the filling out of routine, undisputed [no-fault] claim forms is unreasonable and a violation of DR 2-106(B)(1) and Standard 31(b)," although "[a]n attorney may charge a reasonable fee for the attorney's time spent in processing a [no-fault] claim"); Oregon State Bar, Desk Book for Lawyers, Op. 282 (Feb. 15, 1975), cited in Olavi Maru, Digest of Bar Ass'n Ethics Ops., No. 9843, at 459 (Supp. 1977) (finding a contingency fee in a no-fault claim proper only "when the companies in fact oppose the claims for benefits and when the services of a lawyer are required to obtain payment of these benefits"); Professional Guidance Comm. of Pa., Inquiry 88-4 (Mar. 21, 1988), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Pa. Ops. 61 (1989) (finding that a "uniform or systematic practice" of charging a fee of "40% or 50% of any recovery, depending upon at what stage a recovery is made" would in many circumstances be "unreasonable" and would violate Rule 1.5 of the Model Rules of Professional Conduct); S.C. Ethics Advisory Comm., Op. 83-03 (1983), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, S.C. Ops. 17 (1983) ("Only . . . [when] there is a true question concerning the availability of [no-fault] coverage should a contingent fee be charged and then, only after the client has been fully informed of all relevant factors."); State Bar of Wis. Ethics Comm. Op. E-82-5 (Jan. 1982), reprinted in Lawyers' Manual on Professional Conduct 801:9106 (A.B.A./B.N.A. 1982). For judicial opinions establishing the above standard, see Brickman et al., Rethinking Contingency Fees, supra note 60, at 54 n.16.
164. See State Bar of Ga., Advisory Op. 37 (Jan. 20, 1984), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Ga. Ops. 5 (1984) (stating that "[t]he basis on which attorneys are allowed to take contingency fees is that the claim . . . is itself contingent" and that "the taking of a contingency fee for the filling out of routine, undisputed [no-fault] claim forms is unreasonable and a violation of DR 2-106(B)(1) and Standard 31(b)," although "[a]n attorney may charge a reasonable fee for the attorney's time spent in processing a [no-fault] claim"); Oregon State Bar, Desk Book for Lawyers, Op. 282 (Feb. 15, 1975), cited in Olavi Maru, Digest of Bar Ass'n Ethics Ops., No. 9843, at 459 (Supp. 1977) (finding a contingency fee in a no-fault claim proper only "when the companies in fact oppose the claims for benefits and when the services of a lawyer are required to obtain payment of these benefits"); Professional Guidance Comm. of Pa., Inquiry 88-4 (Mar. 21, 1988), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Pa. Ops. 61 (1989) (finding that a "uniform or systematic practice" of charging a fee of "40% or 50% of any recovery, depending upon at what stage a recovery is made" would in many circumstances be "unreasonable" and would violate Rule 1.5 of the Model Rules of Professional Conduct); S.C. Ethics Advisory Comm., Op. 83-03 (1983), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, S.C. Ops. 17 (1983) ("Only . . . [when] there is a true question concerning the availability of [no-fault] coverage should a contingent fee be charged and then, only after the client has been fully informed of all relevant factors."); State Bar of Wis. Ethics Comm. Op. E-82-5 (Jan. 1982), reprinted in Lawyers' Manual on Professional Conduct 801:9106 (A.B.A./B.N.A. 1982). For judicial opinions establishing the above standard, see Brickman et al., Rethinking Contingency Fees, supra note 60, at 54 n.16.
165. Virginia State Bar Ass'n, LEO 1461 (Apr. 13, 1992), reprinted in Nat'l Rep. on Legal Ethics and Professional Responsibility, Va. Ops. 21 (1992).
166. "The contingency risk of loss that justified a one-third to 40 percent share of a plaintiffs verdict for a trial attorney in the 1950s and 1960s no longer exists. Negligence trials today focus primarily on apportionment of damages, not on whether there is liability." Grant P. DuBois, Modify the Contingent Fee System, A.B.A. J., Dec. 1985, at 38, 38; see also Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 58 (1985) ("[T]he payoff to suit has increased as a result of pro-plaintiff trends in common law doctrine, which have raised compensable damages, eroded traditional defenses and extended the scope of liability, and reduced the plaintiffs costs of proving negligence."). A federal district court judge, who was a practicing lawyer for 22 years before his appointment to the Northern District of Illinois, observed that "not all personal injury cases [routinely accepted on a contingent fee basis] are contingent." John F. Grady, Some Ethical Questions About Percentage Fees, Litig., Summer 1976, at 20, 24. The federal judge presiding over the litigation resulting from the crash of a DC-10 in Chicago on May 25,1979, stated: "[Y]ou have to get a little worried when you see some of these percentage fees in relatively early settlements in these cases in which there is no contested liability, and the amounts are substancial [sic] . . . ." Transcript of Nov. 6, 1980 Hearing, In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979 (MDL No. 391), quoted in Eric M. Rhein, Note, Judicial Regulation of Contingent Fee Contracts, 48 J. Air L. & Com. 151, 175 n.219 (1982). The risk factor has been whittled away and the "contingent fee" has become a misnomer; it would be more accurate to rename it a "percentage fee." Grady, supra, at 24. "[The] lawyer does know in most cases that there will be some payment made by the defendant or his insurance company." Id.
167. "The contingency risk of loss that justified a one-third to 40 percent share of a plaintiffs verdict for a trial attorney in the 1950s and 1960s no longer exists. Negligence trials today focus primarily on apportionment of damages, not on whether there is liability." Grant P. DuBois, Modify the Contingent Fee System, A.B.A. J., Dec. 1985, at 38, 38; see also Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 58 (1985) ("[T]he payoff to suit has increased as a result of pro-plaintiff trends in common law doctrine, which have raised compensable damages, eroded traditional defenses and extended the scope of liability, and reduced the plaintiffs costs of proving negligence."). A federal district court judge, who was a practicing lawyer for 22 years before his appointment to the Northern District of Illinois, observed that "not all personal injury cases [routinely accepted on a contingent fee basis] are contingent." John F. Grady, Some Ethical Questions About Percentage Fees, Litig., Summer 1976, at 20, 24. The federal judge presiding over the litigation resulting from the crash of a DC-10 in Chicago on May 25,1979, stated: "[Y]ou have to get a little worried when you see some of these percentage fees in relatively early settlements in these cases in which there is no contested liability, and the amounts are substancial [sic] . . . ." Transcript of Nov. 6, 1980 Hearing, In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979 (MDL No. 391), quoted in Eric M. Rhein, Note, Judicial Regulation of Contingent Fee Contracts, 48 J. Air L. & Com. 151, 175 n.219 (1982). The risk factor has been whittled away and the "contingent fee" has become a misnomer; it would be more accurate to rename it a "percentage fee." Grady, supra, at 24. "[The] lawyer does know in most cases that there will be some payment made by the defendant or his insurance company." Id.
168. "The contingency risk of loss that justified a one-third to 40 percent share of a plaintiffs verdict for a trial attorney in the 1950s and 1960s no longer exists. Negligence trials today focus primarily on apportionment of damages, not on whether there is liability." Grant P. DuBois, Modify the Contingent Fee System, A.B.A. J., Dec. 1985, at 38, 38; see also Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 58 (1985) ("[T]he payoff to suit has increased as a result of pro-plaintiff trends in common law doctrine, which have raised compensable damages, eroded traditional defenses and extended the scope of liability, and reduced the plaintiffs costs of proving negligence."). A federal district court judge, who was a practicing lawyer for 22 years before his appointment to the Northern District of Illinois, observed that "not all personal injury cases [routinely accepted on a contingent fee basis] are contingent." John F. Grady, Some Ethical Questions About Percentage Fees, Litig., Summer 1976, at 20, 24. The federal judge presiding over the litigation resulting from the crash of a DC-10 in Chicago on May 25,1979, stated: "[Y]ou have to get a little worried when you see some of these percentage fees in relatively early settlements in these cases in which there is no contested liability, and the amounts are substancial [sic] . . . ." Transcript of Nov. 6, 1980 Hearing, In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979 (MDL No. 391), quoted in Eric M. Rhein, Note, Judicial Regulation of Contingent Fee Contracts, 48 J. Air L. & Com. 151, 175 n.219 (1982). The risk factor has been whittled away and the
169. "The contingency risk of loss that justified a one-third to 40 percent share of a plaintiffs verdict for a trial attorney in the 1950s and 1960s no longer exists. Negligence trials today focus primarily on apportionment of damages, not on whether there is liability." Grant P. DuBois, Modify the Contingent Fee System, A.B.A. J., Dec. 1985, at 38, 38; see also Patricia M. Danzon, Medical Malpractice: Theory, Evidence, and Public Policy 58 (1985) ("[T]he payoff to suit has increased as a result of pro-plaintiff trends in common law doctrine, which have raised compensable damages, eroded traditional defenses and extended the scope of liability, and reduced the plaintiffs costs of proving negligence."). A federal district court judge, who was a practicing lawyer for 22 years before his appointment to the Northern District of Illinois, observed that "not all personal injury cases [routinely accepted on a contingent fee basis] are contingent." John F. Grady, Some Ethical Questions About Percentage Fees, Litig., Summer 1976, at 20, 24. The federal judge presiding over the litigation resulting from the crash of a DC-10 in Chicago on May 25,1979, stated: "[Y]ou have to get a little worried when you see some of these percentage fees in relatively early settlements in these cases in which there is no contested liability, and the amounts are substancial [sic] . . . ." Transcript of Nov. 6, 1980 Hearing, In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979 (MDL No. 391), quoted in Eric M. Rhein, Note, Judicial Regulation of Contingent Fee Contracts, 48 J. Air L. & Com. 151, 175 n.219 (1982). The risk factor has been whittled away and the "contingent fee" has become a misnomer; it would be more accurate to rename it a "percentage fee." Grady, supra, at 24. "[The] lawyer does know in most cases that there will be some payment made by the defendant or his insurance company." Id.
170. "[T]here are the good [personal injury] cases - with clear liability and high return . . . [generating] 'quick and easy money' . . . ." Andrew Blum, Big Bucks, But . . ., Nat'l L.J., Apr. 3, 1989, at 1, 47 ( hereinafter Blum, Big Bucks] .
171. "[T]here are the good [personal injury] cases - with clear liability and high return . . . [generating] 'quick and easy money' . . . ." Andrew Blum, Big Bucks, But . . ., Nat'l L.J., Apr. 3, 1989, at 1, 47 ( hereinafter Blum, Big Bucks] .
172. Presiding Justice Bernard Botein, Address at the New York State Ass'n of Plaintiffs' Trial Lawyers Annual Luncheon (Sept. 16, 1961), printed in Bernard Botein, Co-operation of Bench and Bar in the Regulation of Negligence Litigation, N.Y. L.J., Sept. 21, 1961, at 4 [hereinafter Remarks of Judge Botein]; see also Jeffrey O'Connell, The Injury Industry and the Remedy of No-Fault Insurance 49 (1971) (arguing that lawyers rarely accept cases on a contingent fee basis that do not result in recovery); Randal R. Craft, Jr., Factors Influencing Settlement of Personal Injury and Death Claims in Aircraft Accident Litigation, 46 J. Air L. & Com. 895, 918-20 (1981) (discussing the conscionability of charging high contingency fees in cases where claimants' recoveries are not truly contingent); DuBois, supra note 95, at 38 ("The fact is that the risk of loss to the personal injury plaintiff has faded away . . . .").
173. Presiding Justice Bernard Botein, Address at the New York State Ass'n of Plaintiffs' Trial Lawyers Annual Luncheon (Sept. 16, 1961), printed in Bernard Botein, Co-operation of Bench and Bar in the Regulation of Negligence Litigation, N.Y. L.J., Sept. 21, 1961, at 4 [hereinafter Remarks of Judge Botein]; see also Jeffrey O'Connell, The Injury Industry and the Remedy of No-Fault Insurance 49 (1971) (arguing that lawyers rarely accept cases on a contingent fee basis that do not result in recovery); Randal R. Craft, Jr., Factors Influencing Settlement of Personal Injury and Death Claims in Aircraft Accident Litigation, 46 J. Air L. & Com. 895, 918-20 (1981) (discussing the conscionability of charging high contingency fees in cases where claimants' recoveries are not truly contingent); DuBois, supra note 95, at 38 ("The fact is that the risk of loss to the personal injury plaintiff has faded away . . . .").
174. Presiding Justice Bernard Botein, Address at the New York State Ass'n of Plaintiffs' Trial Lawyers Annual Luncheon (Sept. 16, 1961), printed in Bernard Botein, Co-operation of Bench and Bar in the Regulation of Negligence Litigation, N.Y. L.J., Sept. 21, 1961, at 4 [hereinafter Remarks of Judge Botein]; see also Jeffrey O'Connell, The Injury Industry and the Remedy of No-Fault Insurance 49 (1971) (arguing that lawyers rarely accept cases on a contingent fee basis that do not result in recovery); Randal R. Craft, Jr., Factors Influencing Settlement of Personal Injury and Death Claims in Aircraft Accident Litigation, 46 J. Air L. & Com. 895, 918-20 (1981) (discussing the conscionability of charging high contingency fees in cases where claimants' recoveries are not truly contingent); DuBois, supra note 95, at 38 ("The fact is that the risk of loss to the personal injury plaintiff has faded away . . . .").
175. Presiding Justice Bernard Botein, Address at the New York State Ass'n of Plaintiffs' Trial Lawyers Annual Luncheon (Sept. 16, 1961), printed in Bernard Botein, Co-operation of Bench and Bar in the Regulation of Negligence Litigation, N.Y. L.J., Sept. 21, 1961, at 4 [hereinafter Remarks of Judge Botein]; see also Jeffrey O'Connell, The Injury Industry and the Remedy of No-Fault Insurance 49 (1971) (arguing that lawyers rarely accept cases on a contingent fee basis that do not result in recovery); Randal R. Craft, Jr., Factors Influencing Settlement of Personal Injury and Death Claims in Aircraft Accident Litigation, 46 J. Air L. & Com. 895, 918-20 (1981) (discussing the conscionability of charging high contingency fees in cases where claimants' recoveries are not truly contingent); DuBois, supra note 95, at 38 ("The fact is that the risk of loss to the personal injury plaintiff has faded away . . . .").
176. Bok, supra note 29, at 139-40.
177. The omission is not without precedent and was perhaps presaged in ABA Informal Opinion 86-1521, which also dealt with contingency fees. See ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1521 (1986) [hereinafter Informal Op. 86-1521]. There, an earlier Committee opined that contingency fee lawyers must extend to clients the option of paying an hourly rate. In that opinion, the Committee quoted and discussed Ethical Consideration 2-20, which deals with the need to disclose to the client all relevant factors regarding entering into a contingency fee arrangement. However, the Committee did not cite or discuss - that is, it essentially deleted from the Model Code - Ethical Consideration 5-7, which states: Although a contingent fee arrangement gives a lawyer a financial interest in the outcome of litigation, a reasonable contingent fee is permissible in civil cases because it may be the only means by which a layman can obtain the services of a lawyer of his choice. But a lawyer, because he is in a better position to evaluate a cause of action, should enter into a contingent fee arrangement only in those instances where the arrangement will be beneficial to the client. Model Code, supra note 1, EC 5-7 (emphasis added). That omission enabled the Committee in Informal Op. 86-1521 to avoid considering whether the codes had thus codified the objective fiduciary standard of fair dealing with a client. See Brickman, Without Contingencies, supra note 30, at 51 n.88.
178. The omission is not without precedent and was perhaps presaged in ABA Informal Opinion 86-1521, which also dealt with contingency fees. See ABA Comm. on Ethics and Professional Responsibility, Informal Op. 1521 (1986) [hereinafter Informal Op. 86-1521]. There, an earlier Committee opined that contingency fee lawyers must extend to clients the option of paying an hourly rate. In that opinion, the Committee quoted and discussed Ethical Consideration 2-20, which deals with the need to disclose to the client all relevant factors regarding entering into a contingency fee arrangement. However, the Committee did not cite or discuss - that is, it essentially deleted from the Model Code - Ethical Consideration 5-7, which states: Although a contingent fee arrangement gives a lawyer a financial interest in the outcome of litigation, a reasonable contingent fee is permissible in civil cases because it may be the only means by which a layman can obtain the services of a lawyer of his choice. But a lawyer, because he is in a better position to evaluate a cause of action, should enter into a contingent fee arrangement only in those instances where the arrangement will be beneficial to the client. Model Code, supra note 1, EC 5-7 (emphasis added). That omission enabled the Committee in Informal Op. 86-1521 to avoid considering whether the codes had thus codified the objective fiduciary standard of fair dealing with a client. See Brickman, Without Contingencies, supra note 30, at 51 n.88.
179. Formal Op. 94-389, supra note 1.
180. Id.
181. Id.
182. See James A. Henderson, Jr. & Theodore Eisenberg, The Quiet Revolution in Products Liability: An Empirical Study of Legal Change, 37 UCLA L. Rev. 479, 523 (1990) (reporting that an empirical study, in part, of plaintiffs' success rates in product liability cases shows that in 1979, plaintiffs prevailed 40.5% of the tune, but by 1987, plaintiffs' victories dropped to 32.5%); see also Peter Charles Choharis, A Comprehensive Market Strategy for Tort Reform, 12 Yale J. on Reg. 435 (1995) (discussing tort reform proposals based on an economic model); Edward Felsenthal, Juries Display Less Sympathy in Injury Claims, Wall St. J., Mar. 21, 1994, at B1 (stating that jurors believe jury awards are too large); Linda Himelstein & Neu Gross, Should Business Be Afraid of Juries?, Bus. Wk., Nov. 8, 1993, at 100, 100 (noting that recent studies have shown a decline in the number of plaintiffs' victories in product liability cases and in the resultant amount of awards).
183. See James A. Henderson, Jr. & Theodore Eisenberg, The Quiet Revolution in Products Liability: An Empirical Study of Legal Change, 37 UCLA L. Rev. 479, 523 (1990) (reporting that an empirical study, in part, of plaintiffs' success rates in product liability cases shows that in 1979, plaintiffs prevailed 40.5% of the tune, but by 1987, plaintiffs' victories dropped to 32.5%); see also Peter Charles Choharis, A Comprehensive Market Strategy for Tort Reform, 12 Yale J. on Reg. 435 (1995) (discussing tort reform proposals based on an economic model); Edward Felsenthal, Juries Display Less Sympathy in Injury Claims, Wall St. J., Mar. 21, 1994, at B1 (stating that jurors believe jury awards are too large); Linda Himelstein & Neu Gross, Should Business Be Afraid of Juries?, Bus. Wk., Nov. 8, 1993, at 100, 100 (noting that recent studies have shown a decline in the number of plaintiffs' victories in product liability cases and in the resultant amount of awards).
184. See James A. Henderson, Jr. & Theodore Eisenberg, The Quiet Revolution in Products Liability: An Empirical Study of Legal Change, 37 UCLA L. Rev. 479, 523 (1990) (reporting that an empirical study, in part, of plaintiffs' success rates in product liability cases shows that in 1979, plaintiffs prevailed 40.5% of the tune, but by 1987, plaintiffs' victories dropped to 32.5%); see also Peter Charles Choharis, A Comprehensive Market Strategy for Tort Reform, 12 Yale J. on Reg. 435 (1995) (discussing tort reform proposals based on an economic model); Edward Felsenthal, Juries Display Less Sympathy in Injury Claims, Wall St. J., Mar. 21, 1994, at B1 (stating that jurors believe jury awards are too large); Linda Himelstein & Neu Gross, Should Business Be Afraid of Juries?, Bus. Wk., Nov. 8, 1993, at 100, 100 (noting that recent studies have shown a decline in the number of plaintiffs' victories in product liability cases and in the resultant amount of awards).
185. See James A. Henderson, Jr. & Theodore Eisenberg, The Quiet Revolution in Products Liability: An Empirical Study of Legal Change, 37 UCLA L. Rev. 479, 523 (1990) (reporting that an empirical study, in part, of plaintiffs' success rates in product liability cases shows that in 1979, plaintiffs prevailed 40.5% of the tune, but by 1987, plaintiffs' victories dropped to 32.5%); see also Peter Charles Choharis, A Comprehensive Market Strategy for Tort Reform, 12 Yale J. on Reg. 435 (1995) (discussing tort reform proposals based on an economic model); Edward Felsenthal, Juries Display Less Sympathy in Injury Claims, Wall St. J., Mar. 21, 1994, at B1 (stating that jurors believe jury awards are too large); Linda Himelstein & Neu Gross, Should Business Be Afraid of Juries?, Bus. Wk., Nov. 8, 1993, at 100, 100 (noting that recent studies have shown a decline in the number of plaintiffs' victories in product liability cases and in the resultant amount of awards).
186. See David M. Trubek et al., The Costs of Ordinary Litigation, 31 UCLA L. Rev. 72, 89 (1983) (stating that less than eight percent of the civil cases studied eventually went to trial); P.S. Atiyah, Tort Law and the Alternatives: Some Anglo-American Comparisons, 1987 Duke L.J. 1002, 1009 (stating that most tort lawsuits never reach the trial phase).
187. See David M. Trubek et al., The Costs of Ordinary Litigation, 31 UCLA L. Rev. 72, 89 (1983) (stating that less than eight percent of the civil cases studied eventually went to trial); P.S. Atiyah, Tort Law and the Alternatives: Some Anglo-American Comparisons, 1987 Duke L.J. 1002, 1009 (stating that most tort lawsuits never reach the trial phase).
188. See Lester Brickman, Class Action Reform: Beyond Rhone-Poulenc Rorer, Research Memorandum, Manhattan Inst. for Pol'y Res. (Oct. 1995); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995); Brickman, Lawyers' Rates of Return, supra note 75, at 1780-85. Breast implant litigation and the spin-off litigation involving the contraceptive Norplant amply illustrate the ability of plaintiff lawyers to extract multi-billion dollar settlements despite overwhelming scientific evidence of lack of causation. See Gina Kolata, Will the Lawyers Kill Off Norplant?, N. Y. Times, May 28, 1995, § 3, at 1, 5 (describing the parallels between the Norplant litigation and the breast implant litigation and discussing the financial interests of lawyers and doctors; for example, when one woman was told by her attorney to remove her Norplant device in order to preserve her claim for damages even though she was very happy with Norplant, she reportedly asked: "Once I get my money, can I get a second Norplant put in?"); Gina Kolata & Barry Meier, Implant Lawsuits Create a Medical Rush to Cash In, N.Y. Times, Sept. 18, 1995, at A1 (describing how women could qualify to receive $200,000 or more from a settlement fund for complaints of non-verifiable injuries such as aches and fatigue; one doctor admitted that "one of the categories was so broad that you or I would have fit into it"); Anne E. Tergesen, Norplant Under Siege, Device Spawning a Spate of Lawsuits, The Rec., Aug. 27, 1995, at B1 (discussing reports which show that most Norplant users who have suffered at least one side effect are satisfied with Norplant and stating that some complaints filed by lawyers have been "carbon copies of one another, right down to typographical errors").
189. See Lester Brickman, Class Action Reform: Beyond Rhone-Poulenc Rorer, Research Memorandum, Manhattan Inst. for Pol'y Res. (Oct. 1995); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995); Brickman, Lawyers' Rates of Return, supra note 75, at 1780-85. Breast implant litigation and the spin-off litigation involving the contraceptive Norplant amply illustrate the ability of plaintiff lawyers to extract multi-billion dollar settlements despite overwhelming scientific evidence of lack of causation. See Gina Kolata, Will the Lawyers Kill Off Norplant?, N. Y. Times, May 28, 1995, § 3, at 1, 5 (describing the parallels between the Norplant litigation and the breast implant litigation and discussing the financial interests of lawyers and doctors; for example, when one woman was told by her attorney to remove her Norplant device in order to preserve her claim for damages even though she was very happy with Norplant, she reportedly asked: "Once I get my money, can I get a second Norplant put in?"); Gina Kolata & Barry Meier, Implant Lawsuits Create a Medical Rush to Cash In, N.Y. Times, Sept. 18, 1995, at A1 (describing how women could qualify to receive $200,000 or more from a settlement fund for complaints of non-verifiable injuries such as aches and fatigue; one doctor admitted that "one of the categories was so broad that you or I would have fit into it"); Anne E. Tergesen, Norplant Under Siege, Device Spawning a Spate of Lawsuits, The Rec., Aug. 27, 1995, at B1 (discussing reports which show that most Norplant users who have suffered at least one side effect are satisfied with Norplant and stating that some complaints filed by lawyers have been "carbon copies of one another, right down to typographical errors").
190. See Lester Brickman, Class Action Reform: Beyond Rhone-Poulenc Rorer, Research Memorandum, Manhattan Inst. for Pol'y Res. (Oct. 1995); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995); Brickman, Lawyers' Rates of Return, supra note 75, at 1780-85. Breast implant litigation and the spin-off litigation involving the contraceptive Norplant amply illustrate the ability of plaintiff lawyers to extract multi-billion dollar settlements despite overwhelming scientific evidence of lack of causation. See Gina Kolata, Will the Lawyers Kill Off Norplant?, N. Y. Times, May 28, 1995, § 3, at 1, 5 (describing the parallels between the Norplant litigation and the breast implant litigation and discussing the financial interests of lawyers and doctors; for example, when one woman was told by her attorney to remove her Norplant device in order to preserve her claim for damages even though she was very happy with Norplant, she reportedly asked: "Once I get my money, can I get a second Norplant put in?"); Gina Kolata & Barry Meier, Implant Lawsuits Create a Medical Rush to Cash In, N.Y. Times, Sept. 18, 1995, at A1 (describing how women could qualify to receive $200,000 or more from a settlement fund for complaints of non-verifiable injuries such as aches and fatigue; one doctor admitted that "one of the categories was so broad that you or I would have fit into it"); Anne E. Tergesen, Norplant Under Siege, Device Spawning a Spate of Lawsuits, The Rec., Aug. 27, 1995, at B1 (discussing reports which show that most Norplant users who have suffered at least one side effect are satisfied with Norplant and stating that some complaints filed by lawyers have been "carbon copies of one another, right down to typographical errors").
191. See Lester Brickman, Class Action Reform: Beyond Rhone-Poulenc Rorer, Research Memorandum, Manhattan Inst. for Pol'y Res. (Oct. 1995); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995); Brickman, Lawyers' Rates of Return, supra note 75, at 1780-85. Breast implant litigation and the spin-off litigation involving the contraceptive Norplant amply illustrate the ability of plaintiff lawyers to extract multi-billion dollar settlements despite overwhelming scientific evidence of lack of causation. See Gina Kolata, Will the Lawyers Kill Off Norplant?, N. Y. Times, May 28, 1995, § 3, at 1, 5 (describing the parallels between the Norplant litigation and the breast implant litigation and discussing the financial interests of lawyers and doctors; for example, when one woman was told by her attorney to remove her Norplant device in order to preserve her claim for damages even though she was very happy with Norplant, she reportedly asked: "Once I get my money, can I get a second Norplant put in?"); Gina Kolata & Barry Meier, Implant Lawsuits Create a Medical Rush to Cash In, N.Y. Times, Sept. 18, 1995, at A1 (describing how women could qualify to receive $200,000 or more from a settlement fund for complaints of non-verifiable injuries such as aches and fatigue; one doctor admitted that "one of the categories was so broad that you or I would have fit into it"); Anne E. Tergesen, Norplant Under Siege, Device Spawning a Spate of Lawsuits, The Rec., Aug. 27, 1995, at B1 (discussing reports which show that most Norplant users who have suffered at least one side effect are satisfied with Norplant and stating that some complaints filed by lawyers have been "carbon copies of one another, right down to typographical errors").
192. See Lester Brickman, Class Action Reform: Beyond Rhone-Poulenc Rorer, Research Memorandum, Manhattan Inst. for Pol'y Res. (Oct. 1995); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995); Brickman, Lawyers' Rates of Return, supra note 75, at 1780-85. Breast implant litigation and the spin-off litigation involving the contraceptive Norplant amply illustrate the ability of plaintiff lawyers to extract multi-billion dollar settlements despite overwhelming scientific evidence of lack of causation. See Gina Kolata, Will the Lawyers Kill Off Norplant?, N. Y. Times, May 28, 1995, § 3, at 1, 5 (describing the parallels between the Norplant litigation and the breast implant litigation and discussing the financial interests of lawyers and doctors; for example, when one woman was told by her attorney to remove her Norplant device in order to preserve her claim for damages even though she was very happy with Norplant, she reportedly asked: "Once I get my money, can I get a second Norplant put in?"); Gina Kolata & Barry Meier, Implant Lawsuits Create a Medical Rush to Cash In, N.Y. Times, Sept. 18, 1995, at A1 (describing how women could qualify to receive $200,000 or more from a settlement fund for complaints of non-verifiable injuries such as aches and fatigue; one doctor admitted that "one of the categories was so broad that you or I would have fit into it"); Anne E. Tergesen, Norplant Under Siege, Device Spawning a Spate of Lawsuits, The Rec., Aug. 27, 1995, at B1 (discussing reports which show that most Norplant users who have suffered at least one side effect are satisfied with Norplant and stating that some complaints filed by lawyers have been "carbon copies of one another, right down to typographical errors").
193. These fees are also often unrelated to the risk borne by the attorney or the amount of work actually performed. For example, in an order disallowing unreasonable attorneys' fees, Judge Robert Merhige, presiding over the Dalkon Shield Claimants Trust litigation, stated: It is to be borne in mind that counsel has already received, in the vast majority of instances, fees of at least one-third of the gross settlement amount, plus costs. These fees, in many instances, exceed $100,000.00 per claim, and the aggregate fees received by some counsel, especially those with hundreds of cases, runs as high as several million dollars per attorney or law firm. Generally, the sole efforts related to such compensation consist of garnering medical records and advising a client whether to accept a non-negotiable settlement offer. Memorandum to Accompany Order Disallowing Unreasonable Attorneys' Fees at 18 n.10, In re A.H. Robins Co., Inc., Ch. 11 Case No. 85-01307-R (Bankr. E.D. Va. Mar. 1, 1995).
194. For annual compilations of federal litigation filings, see the Administrative Office of the United States Courts, Federal Judicial Workload Statistics (1993) (including statistical compilation of tort actions commenced in U.S. District Courts, but not describing the methodology for counting case filings). For annual compilations of state litigation filings, see National Center for State Courts, State Court Caseload Statistics (1988) (including statistical compilations of tort filings in trial and appellate courts). Of the 36 states providing civil disposition data in 1988, 23 states counted a case as one filing if the jury or first witness were sworn, whereas 13 states required a verdict or decision. Id. at 52. Because class actions are typically counted as a single filing, the resultant undercounts of litigation activity are dramatic. Conversations between author and a Senior Management Analyst at the Administrative Office of the United States Courts (July 20, 1995 & July 26, 1995) (the views stated by the analyst are not necessarily representative of the views of the Administrative Office). The analyst stated that "[d]epending on how a federal judge certifies under Rule 23, class actions are granted as either: (1) One class action covering multiple plaintiffs (most cost-effective because of single filing fee) or (2) Plaintiffs being counted individually as part of one class action." Id. (July 20, 1995 conversation). He also stated that the number of filing fees paid determines the number of filings that are registered for statistical purposes, which is the reason why most class actions are counted as one filing. Id. For example, as many as six million homeowners may be eligible to collect from a $950 million settlement of a class-action suit against the makers of allegedly defective plastic pipes used in home plumbing systems. Bill Rumbler, Judge Gives Homeowners $950 Million for Bad Pipes, Chi. Sun-Times, Nov. 10, 1995, at 28. About 4.2 million claimants received $408 million in discount coupons from airline companies accused of price fixing. See In re Domestic Air Transp. Antitrust Litigation, 148 F.R.D. 297 (N.D. Ga. 1993). A class action suit against the manufacturer of Norplant has been certified in a state court in Cook County, Ill., which may adjudicate the claims of about one million Norplant users. Jane Doe v. Wyeth-Ayerst Labs. & Am. Home Prods. Corp., No. 93 L 11096 (Cook Cty. Or. Ct. filed Sept. 13, 1993); see also Laura Duncan, Norplant: The Next Mass Tort, A.B.A. J., Nov. 1995, at 16, 16-17 (discussing the details of the suit and the appropriateness of filing for class action status). At least 400,000 women with silicone gel breast implants registered to participate in a $4.225 billion settlement with manufacturers. See Kolata & Meier, supra note 105, at A8. As many as 700,000 homeowners may be eligible to participate in a $375 million settlement of class-action suits against a manufacturer of defective siding. See Bill Richards, Louisiana-Pacific Agrees to Settlement of Class Action Suits Linked to Product, Wall St. J., Oct. 18, 1995, at A8.
195. In addition to increased awards of punitive damages in tort cases, see Stephen M. Turner et al., Punitive Damages Explosion: Fact or Fiction?, Washington Legal Foundation, Critical Legal Issues (Nov. 1992), punitive damages are being used increasingly in contracts cases, see Olympia Hotels Corp. v. Johnson Wax Dev. Corp., 908 F.2d 1363, 1374 (7th Cir. 1990); Russell J. Weintraub, A Survey of Contract Practice and Policy, 1992 Wis. L. Rev. 1, 8, and in other contingency fee driven claims where there is no allegation of physical injury. See Janet Novack, Torture by Tort, Forbes, Nov. 6, 1995, at 138, 138.
196. In addition to increased awards of punitive damages in tort cases, see Stephen M. Turner et al., Punitive Damages Explosion: Fact or Fiction?, Washington Legal Foundation, Critical Legal Issues (Nov. 1992), punitive damages are being used increasingly in contracts cases, see Olympia Hotels Corp. v. Johnson Wax Dev. Corp., 908 F.2d 1363, 1374 (7th Cir. 1990); Russell J. Weintraub, A Survey of Contract Practice and Policy, 1992 Wis. L. Rev. 1, 8, and in other contingency fee driven claims where there is no allegation of physical injury. See Janet Novack, Torture by Tort, Forbes, Nov. 6, 1995, at 138, 138.
197. In addition to increased awards of punitive damages in tort cases, see Stephen M. Turner et al., Punitive Damages Explosion: Fact or Fiction?, Washington Legal Foundation, Critical Legal Issues (Nov. 1992), punitive damages are being used increasingly in contracts cases, see Olympia Hotels Corp. v. Johnson Wax Dev. Corp., 908 F.2d 1363, 1374 (7th Cir. 1990); Russell J. Weintraub, A Survey of Contract Practice and Policy, 1992 Wis. L. Rev. 1, 8, and in other contingency fee driven claims where there is no allegation of physical injury. See Janet Novack, Torture by Tort, Forbes, Nov. 6, 1995, at 138, 138.
198. Punitive damage claims drive up compensatory settlement costs. See Paul B. Taylor, Encouraging Product Safety Testing by Applying the Privilege of Self-Critical Analysis when Punitive Damages Are Sought, 16 Harv. J.L. & Pub. Pol'y 769, 793 n.90 (1993) ("One sample in the study . . . indicates that settlements in claims where plaintiffs sought punitive damages were nearly 150 percent higher than in those where plaintiffs did not seek punitive damages, and in another [sample] the settlements were 60 percent higher . . . ."); see also Novack, supra note 108, at 140 (quoting the general counsel of a large bank who acknowledges that the threat of punitive damages results in higher settlements). A recent survey of large American corporations confirms this effect. In February and March of 1995, approximately 70 chief executive officers of large American corporations were asked to provide the number of tort claims their companies had settled in the previous five years and the aggregate amounts of those settlements, where the settlements were driven primarily by the threat of punitive damages. The CEOs were asked to call a telephone number where their responses were anonymously recorded. Of 68 responses, 43 provided detailed settlement amounts. Insufficient data was obtained on the number of cases settled, but the aggregate dollar value of the punitive damages driven settlements was $4.4 billion. See Richard J. Mahoney, Punitive Damages - Once Is Enough, Contemporary Issues Series 72 (Center for the Study of Am. Bus., St. Louis, Mo.), May 1995, at 6, 20 n.16.
199. Punitive damage claims drive up compensatory settlement costs. See Paul B. Taylor, Encouraging Product Safety Testing by Applying the Privilege of Self-Critical Analysis when Punitive Damages Are Sought, 16 Harv. J.L. & Pub. Pol'y 769, 793 n.90 (1993) ("One sample in the study . . . indicates that settlements in claims where plaintiffs sought punitive damages were nearly 150 percent higher than in those where plaintiffs did not seek punitive damages, and in another [sample] the settlements were 60 percent higher . . . ."); see also Novack, supra note 108, at 140 (quoting the general counsel of a large bank who acknowledges that the threat of punitive damages results in higher settlements). A recent survey of large American corporations confirms this effect. In February and March of 1995, approximately 70 chief executive officers of large American corporations were asked to provide the number of tort claims their companies had settled in the previous five years and the aggregate amounts of those settlements, where the settlements were driven primarily by the threat of punitive damages. The CEOs were asked to call a telephone number where their responses were anonymously recorded. Of 68 responses, 43 provided detailed settlement amounts. Insufficient data was obtained on the number of cases settled, but the aggregate dollar value of the punitive damages driven settlements was $4.4 billion. See Richard J. Mahoney, Punitive Damages - Once Is Enough, Contemporary Issues Series 72 (Center for the Study of Am. Bus., St. Louis, Mo.), May 1995, at 6, 20 n.16.
200. Consider that in just one case, Cimino v. Raymark Indus., 751 F. Supp. 649 (E.D. Tex. 1990), appeal docketed sub nom. Cimino v. Pittsburgh Corning, No. 93-4452 (5th Cir. May 3, 1993), the number of punitive damage settlements paid and judgements awarded exceeded by a large measure the total of all punitive damage awards counted in Michael Rustad, In Defense of Punitive Damages in Products Liability: Testing Tort Anecdotes with Empirical Data, 78 Iowa L. Rev. 1, 39 & n.193 (1992), as having occurred in the 1965-1990 period. Rustad cautions his readers in a footnote that "[t]he number of cases was computed by verdict and not the number of plaintiffs. In asbestos cases, this method understates the number of punitive damage awards." Id. The use of the term "understates" vastly understates the Rustad data's unreliability.
201. One noted jurist stated more than 30 years ago - before the massive increase in the scope of liability imposed under the tort system - that lawyers receive payment in over 90% of the claims they represent. See Remarks of Judge Botein, supra note 97; see also Boccardo v. United States, 12 Cl. Ct. 184, 186 (1987) (discussing cases in which tort lawyers recovered approximately 90% of their litigation expenses), rev'd on other grounds sub nom. Boccardo v. Commissioner, 56 F.3d 1016 (9th Cir. 1995). Litigation over the tax treatment of contingency fee lawyers advances, for the expenses and the costs of litigation, is instructive. Despite the apparent contingent nature of the repayment, the Internal Revenue Service formerly treated these as nondeductible loans which the lawyer could deduct as bad debts if not repaid, rather than as ordinary and necessary business expenses which would be deductible in the year the money was advanced. The IRS position was based upon data it assembled from lawyers' records indicating that between 80% and 90% of the amount of the advances is eventually repaid through settlements and judgments. See Boccardo, 12 Cl. Ct. at 186; Burnett v. Commissioner, 42 T.C. 9, 12 (1964), remanded, 356 F.2d 755 (5th Cir.), cert. denied, 385 U.S. 832 (1966). The IRS concluded and courts concurred that although reimbursement was tied to the recovery of a client's claim, in reality, the risk of nonrecovery was very low because lawyers exercised such great care in agreeing to represent only those whose claims would in all likelihood be successfully concluded. See Boccardo, 12 Cl. Ct. at 185. It is also interesting to note that most of the data used by the IRS was from the 1950s and 1960s - before the major expansion of tort liability, and the dramatic decrease in the risk of nonrecovery. There is a strong likelihood that the correct figure today is at least 90%. At the time of the Court of Claims' decision, the law firm in which Boccardo was a partner used a retainer agreement in which advances for costs were taken out of the client's share of the recovery and the client was obligated to repay the advances if the recovery was insufficient. See id. The firm then changed to a "gross fee" retainer in which advances were no longer the obligation of the client but simply an investment by the firm in a product - the lawsuit. See Boccardo v. Commissioner, 56 F.3d 1016, 1017 (9th Cir. 1995). Under that retainer agreement, because the advanced costs were not loans and there was no contractual right to recover from the client in the event the recovery was insufficient, the advanced costs were "ordinary and necessary" business expenses deductible in the year advanced. Id. at 1019-20.
202. Kenneth R. Shaw, The Right Kind of Case, N.Y. Times, Feb. 25, 1994, at A28 (Letter to the Editor) ("[A] lawyer who takes contingent fee cases where liability is in doubt will soon go bankrupt. An astute lawyer will take only one type of case on contingency: where liability is nearly certain and the amount of damage depends on the amount of money available for trial."). This view has been echoed by another contingency fee attorney who stated that "[t]he success of a firm depends not so much on the cases taken but upon the cases turned down." Blum, Big Bucks, supra note 96, at 46. Stephen Z. Meyers, co-founder of the law firm Jacoby & Meyers - which has "all but abandoned" a practice oriented towards middle-class needs in favor of a "more lucrative" contingency fee practice - stated that their storefront offices reject more than 80% of personal injury claims and other types of contingency fee cases. Randy Kennedy, Groundbreaking Law Firm Shifts Focus to Personal-Injury Cases, N.Y. Times, May 12, 1995, at A29; see also Maurice Rosenberg et al., Elements of Civil Procedure 64-65 (4th ed. 1985) ("[Contingency fees are] likely to be acceptable to a lawyer only when there appears to be a reasonably good prospect of recovery."); Wolfram, supra note 80, at 528 n.19 ("[E]xperienced lawyers can make a prediction about the success of a representation and can refuse to accept cases that are too risky or settle them quickly at any available figure and thus avoid risking much lawyer capital.").
203. Kenneth R. Shaw, The Right Kind of Case, N.Y. Times, Feb. 25, 1994, at A28 (Letter to the Editor) ("[A] lawyer who takes contingent fee cases where liability is in doubt will soon go bankrupt. An astute lawyer will take only one type of case on contingency: where liability is nearly certain and the amount of damage depends on the amount of money available for trial."). This view has been echoed by another contingency fee attorney who stated that "[t]he success of a firm depends not so much on the cases taken but upon the cases turned down." Blum, Big Bucks, supra note 96, at 46. Stephen Z. Meyers, co-founder of the law firm Jacoby & Meyers - which has "all but abandoned" a practice oriented towards middle-class needs in favor of a "more lucrative" contingency fee practice - stated that their storefront offices reject more than 80% of personal injury claims and other types of contingency fee cases. Randy Kennedy, Groundbreaking Law Firm Shifts Focus to Personal-Injury Cases, N.Y. Times, May 12, 1995, at A29; see also Maurice Rosenberg et al., Elements of Civil Procedure 64-65 (4th ed. 1985) ("[Contingency fees are] likely to be acceptable to a lawyer only when there appears to be a reasonably good prospect of recovery."); Wolfram, supra note 80, at 528 n.19 ("[E]xperienced lawyers can make a prediction about the success of a representation and can refuse to accept cases that are too risky or settle them quickly at any available figure and thus avoid risking much lawyer capital.").
204. Kenneth R. Shaw, The Right Kind of Case, N.Y. Times, Feb. 25, 1994, at A28 (Letter to the Editor) ("[A] lawyer who takes contingent fee cases where liability is in doubt will soon go bankrupt. An astute lawyer will take only one type of case on contingency: where liability is nearly certain and the amount of damage depends on the amount of money available for trial."). This view has been echoed by another contingency fee attorney who stated that "[t]he success of a firm depends not so much on the cases taken but upon the cases turned down." Blum, Big Bucks, supra note 96, at 46. Stephen Z. Meyers, co-founder of the law firm Jacoby & Meyers - which has "all but abandoned" a practice oriented towards middle-class needs in favor of a "more lucrative" contingency fee practice - stated that their storefront offices reject more than 80% of personal injury claims and other types of contingency fee cases. Randy Kennedy, Groundbreaking Law Firm Shifts Focus to Personal-Injury Cases, N.Y. Times, May 12, 1995, at A29; see also Maurice Rosenberg et al., Elements of Civil Procedure 64-65 (4th ed. 1985) ("[Contingency fees are] likely to be acceptable to a lawyer only when there appears to be a reasonably good prospect of recovery."); Wolfram, supra note 80, at 528 n.19 ("[E]xperienced lawyers can make a prediction about the success of a representation and can refuse to accept cases that are too risky or settle them quickly at any available figure and thus avoid risking much lawyer capital.").
205. See Boccardo v. United States, 12 Cl. Ct. 184, 185 (1987), rev'd on other grounds sub nom. Boccardo v. Commissioner, 56 F.3d 1016 (9th Cir. 1995).
206. See Brickman, Lawyer's Rates of Return, supra note 75, at 1773.
207. This is so despite the recent decline in plaintiffs' success rates. See supra note 103 and accompanying text.
208. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
209. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
210. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
211. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
212. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
213. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit
214. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
215. See Brickman, Without Contingencies, supra note 30, at 89. While it is conceivable that the plaintiffs' increased trial success is due to plaintiff lawyers taking less risky cases to trial, that is implausible in light of expansion of the scope of tort liability in that time period. Moreover, since most claims are settled without litigation and most filed claims are settled without trial, the more significant issue is what has been the impact of greater success at trial on settlements. See Sean F. Mooney, 'Facts' Don't Speak for Themselves in Tort Reform Battle, Nat'l Underwriter, Feb. 27, 1995, at 47 (stating that lawsuits are filed in only one-third of liability claims, and only 2% of liability claims are resolved by verdict); Jeffrey O'Connell, The Lawsuit Lottery 84 (1979) [hereinafter O'Connell, Lawsuit Lottery] (discussing the outcome of personal injury cases at jury trials). Some indication of this impact may be gleaned from the discussion of commercial general liability insurance payments. A recent study revealed that in inflation-adjusted dollars, paid claims tripled between 1978 and 1990, at a rate well in excess of the average annual rate of inflation; between 1978 and 1985, they increased at an average annual rate of 21.1%, and between 1986 and 1990, they increased at an annual rate of 7.8%. Sean F. Mooney, Crisis and Recovery: A Review of Business Liability Insurance in the 1980's 1 (1992). The impact of greater trial success on settlements is also reflected in decisions on mass consolidation. See In re Repetitive Stress Injury Litig., Nos. 92-7732, 92-7962, 92-9006, 92-9014, 92-9016, 92-9018, 1993 U.S. App. LEXIS 32085, at *9-10 (2d Cir. 1993) ("Defendants assert that consolidation unnecessarily increases their expenses by forcing them to participate in discovery and other proceedings irrelevant to their particular actions. These costs, they say, will force them to settle what they regard as baseless claims."); Lester Brickman, The Asbestos Litigation Crisis: Is There a Need for an Administrative Alternative?, 13 Cardozo L. Rev. 1819, 1873-81 (1992) (arguing that the actual purpose of mass consolidation increasingly is to compel defendants to enter settlements on favorable terms with hundreds and thousands of unimpaired claimants as a way of clearing courts' dockets). The success rate for medical malpractice litigation is approximately 30% to 33% (versus the 50% rate that is common for most tort litigation). See Randall R. Bovbjerg et al., Juries and Justice: Are Malpractice and Other Personal Injuries Created Equal?, 54 Law & Contemp. Probs. 5, 22 (Winter/Spring 1991) (stating that the win rate for medical malpractice trials was about 33%, which is substantially lower than those for automobile cases (64%), suits against the government (48%), and products liability cases (44%)); see also Kevin M. Clermont & Theodore Eisenberg, Trial by Jury or Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1137 (1992) (noting 30% win rate for medical malpractice cases in jury trials); Frank A. Sloan & Chee Ruey Hsieh, Variability in Medical Malpractice Payments: Is Compensation Fair?, 24 Law & Soc'y Rev. 997, 1007 (1990) (stating that a Florida sample showed a success rate of 22% and a Kansas City sample showed a success rate of 34%).
216. Brickman, Without Contingencies, supra note 30, at 100 n.281.
217. See O'Connell, Lawsuit Lottery, supra note 116, at 142 (quoting and citing sources stating that 50% contingent fees are common, including a former local bar president and prominent personal injury lawyer stating that "I agree that there has been an increase in the percentage of contingent fees"); see also Mississippi State Bar v. Blackmon, 600 So. 2d 166, 176 (Miss. 1992) (Banks, J., dissenting) (judicially noting "a once prevailing standard contract of one-third, if the claim is settled without suit, forty percent where suit is filed and fifty percent where the case actually goes to trial . . . more typically stated now as forty percent through trial and fifty percent, if an appeal is taken"); Brickman et al., Rethinking Contingency Fees, supra note 60, at 50 n.5 (1994). The standard rate has also increased because lawyers increasingly apply their contingent fee percentages to the gross award thereby shifting litigation costs entirely to their clients. See id. at 50 n.4; O'Connell, Lawsuit Lottery, supra note 116, at 142 (quoting an attorney who stated that "[a] 50% fee will always net the client less than half the total recovery mainly because the lawyer takes his expenses out first," and quoting from a report of an ambulance-chasing investigation in Philadelphia that "in many cases 'the attorneys managed to get more out of the settlement than the clients'").
218. Brickman, Without Contingencies, supra note 30, at 89-90, 100-01.
219. Brickman, Lawyers' Rates of Return, supra note 75, at 1773.
220. The Committee implicitly adopted the cross-subsidy justification when it stated: "The contingent fee system essentially shifts the risk of litigation or other legal endeavor from a risk averse client to the lawyer who may be more risk neutral because of his ability to recoup his losses through his handling of other legal matters on a contingent basis." Formal Op. 94-389, supra note 1.
221. This rationale is simply the tactical idea to charge some clients excessive fees in order to "finance the claims of hypothetical, future clients whose claims bear greater risks of nonpayment." See Brickman et al., Rethinking Contingency Fees, supra note 60, at 23; see also Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers Revisited, 72 N.C. L. Rev. 1, 36 n.133 (1993) (criticizing approval of the overcompensation argument in a once widely-cited book on contingency fees); Horowitz, supra note 8, at 182 (discussing the ethical breach involved in the attorney practice of cross-subsidization).
222. This rationale is simply the tactical idea to charge some clients excessive fees in order to "finance the claims of hypothetical, future clients whose claims bear greater risks of nonpayment." See Brickman et al., Rethinking Contingency Fees, supra note 60, at 23; see also Lester Brickman & Lawrence A. Cunningham, Nonrefundable Retainers Revisited, 72 N.C. L. Rev. 1, 36 n.133 (1993) (criticizing approval of the overcompensation argument in a once widely-cited book on contingency fees); Horowitz, supra note 8, at 182 (discussing the ethical breach involved in the attorney practice of cross-subsidization).
223. Model Code, supra note 1, DR 2-106(A); Model Rule, supra note 1, Rule 1.5(a).
224. Model Code, supra note 1, DR 2-106(A); Model Rule, supra note 1, Rule 1.5(a).
225. See Thoughts on the Business of Life, Forbes, Apr. 23, 1984, at 176, 176 (quoting George Bernard Shaw).
226. See supra text accompanying notes 111-13.
227. Consider, for example, the following remark of Todd Twyman, a personal injury lawyer from Charleston: "[E]ven client-starved attorneys do not want to waste their time and money on frivolous cases they will not win. With contingency agreements, the lawyer receives a portion of the money collected for the client, so there is a built-in component which serves to protect against lawyers filing frivolous lawsuits." Todd A. Twyman, 'We All Lose' - Courtroom's Equalizer Under Attack Again, Charleston Gazette, Oct. 23, 1995, at P5A.
228. See supra text accompanying notes 111-13.
229. Formal Op. 94-389, supra note 1.
230. See Brickman, Without Contingencies, supra note 30, at 49-70.
231. Id.
232. Model Rules, supra note 1, Rule 1.2.
233. Formal Op. 94-389, supra note 1.
234. There is evidence for this in a contemporaneous work by the principal author of Formal Opinion 94-389, Lawrence Fox. See Lawrence J. Fox, Legal Tender: A Lawyer's Guide to Handling Professional Dilemmas (1995). In Legal Tender, Mr. Fox continues his war on the application of ethical constraints to contingency fees. Id. at 239-51. He gives an example of a lawyer beset by a client rejecting an early and serendipitous settlement offer and thereafter having to invest an additional $30,000 in outlays to take the case to trial, all the while watching his projected hourly rate of return plummet and his risk increase. Id. But unbeknownst to Mr. Fox, contingency fee lawyers do not obligate themselves to advance expert witness fees and other costs. When they do advance such expenses, it is because they expect to make a substantial profit on their investment - not because they are obligated to advance such expenses. Mr. Fox's hapless lawyer need only have informed his client that the client, would have to come up with the $30,000 to induce the required client consent.
235. See Frederick B. MacKinnon, Contingent Fees for Legal Services 196 (1964) ("Although theoretically the client has the control over such decisions, as a practical matter it is usually handled by the attorney.").
236. Deborah R. Hensler, Resolving Mass Toxic Torts: Myths and Realities, 1989 U. Ill. L. Rev. 89, 92-97.
237. Id. According to the RAND study, it is more often the lawyer rather than the litigant who elects to file suit rather than settle without filing: 38% of litigants reported that it was solely or mainly the litigant's decision, compared with 52% who reported that it was solely or mainly the lawyer's decision. Id. at 94.
238. Id. at 95-97; see also Herbert M. Kritzer, The Justice Broker: Lawyers and Ordinary Litigation 60-67 (1990) (analyzing empirical data from a survey of 1,382 lawyers on their perspective of the distribution of control in the lawyer-client relationship).
239. See MacKinnon, supra note 134, at 196.
240. A contingency fee lawyer arguing against California Proposition 202, which advocates contingency fee limits when early offers are made, see Bernstein, supra note 31, at A16, stated: "[M]y clients - and most clients - are ultimately going to do what I (or their own lawyers) recommend. So the client will choose perspective is a little deceiving. It's usually the lawyer choosing for the client . . . ." Richard Zitrin, LEXIS Counsel Connect (Feb. 12, 1996, at 15:45:35) (on file with the Fordham Law Review) (responding to Triple Threat Discussion; thread begun by Stephen Gillers).
241. Geoffrey P. Miller, Some Agency Problems in Settlement, 16 J. Legal Stud. 189, 213-14 (1987).
242. "The lawyer's financial interest [sometimes] lies in quick settlement. . . . The client's financial interest lies in going to trial. . . . A lawyer who literally made his client's interests his own . . . would quickly be out of business." Douglas E. Rosenthal, Lawyer and Client: Who's in Charge? 99 (1974) [hereinafter Rosenthal, Lawyer and Client]. In a similar vein, the lawyer-client relationship is sometimes viewed as a partnership, again, with the lawyer maintaining the ultimate control. "It would seem, in spite of the general protestations of courts to the contrary, that there is a joint ownership of the claim, with the lawyer acting as managing partner." MacKinnon, supra note 134, at 196. MacKinnon adds that in some cases, not only is the client not in control, but she or he is also uninformed as to the status of the case: "Occasionally, the client may not know of the exact terms of the settlement, being given a share of the recovery after the lawyer has completed the settlement and deducted his fees, hospital liens, and costs." Id.
243. "The lawyer's financial interest [sometimes] lies in quick settlement. . . . The client's financial interest lies in going to trial. . . . A lawyer who literally made his client's interests his own . . . would quickly be out of business." Douglas E. Rosenthal, Lawyer and Client: Who's in Charge? 99 (1974) [hereinafter Rosenthal, Lawyer and Client]. In a similar vein, the lawyer-client relationship is sometimes viewed as a partnership, again, with the lawyer maintaining the ultimate control. "It would seem, in spite of the general protestations of courts to the contrary, that there is a joint ownership of the claim, with the lawyer acting as managing partner." MacKinnon, supra note 134, at 196. MacKinnon adds that in some cases, not only is the client not in control, but she or he is also uninformed as to the status of the case: "Occasionally, the client may not know of the exact terms of the settlement, being given a share of the recovery after the lawyer has completed the settlement and deducted his fees, hospital liens, and costs." Id.
244. Rosenthal, Lawyer and Client, supra note 141, at 110-11. In fact, one attorney admitted that although it is unethical not to report accurately settlement negotiations to the client, no lawyer follows this. Lawyers understate the amount of the proposed settlement to the client so that when the client finally learns of the correct amount, he is satisfied. "If it is necessary to lie and cheat him to get him to accept what's good for him, you do it." Id. at 111.
245. "[A] review of the empirical literature on the lawyer-client relationship hardly suggests that lawyers and clients negotiate relationships . . . . The literature portrays professional practice as dominated by the lawyer or the client, depending on who has superior status or resources . . . ." William L.F. Felstiner & Austin Sarat, Enactments of Power: Negotiating Reality and Responsibility in Lawyer-Client Interactions, 77 Cornell L. Rev. 1447, 1449 (1992) (emphasis added).
246. Id. at 1463.
247. Id. at 1462. The prevailing view of the lawyer-client relationship is one of the lawyer, the professional, as dominant, and the client, the layman, as passive and relatively uninvolved. Id. at 1451.
248. See supra note 133.
249. In a malpractice case now before the Texas courts, there is compelling evidence that some of the leading tort firms in Texas, representing workers injured in a plant explosion, coerced their clients into accepting settlements. To present the terms of the settlement, the attorneys scheduled meetings with scores of clients, at 15 and 20 minute intervals, at which they presented the amount that they had allocated to that client and demanded immediate acceptance. In many instances, this was the first and only time that the client had met with the lawyer. In other instances, a paralegal was the only contact with the client and apparently did most of the computations. Clients who did not wish to accept the settlement amounts allotted to them were told that their lawyers had agreed with the defendant that as part of the settlement, the lawyers would not represent anyone who rejected the settlement and wished to proceed to suit. Furthermore, clients were told that if they did reject the settlement and retain other counsel, they would have to pay their original lawyers one third of any recovery plus whatever amount they agreed to pay to new counsel. Reluctant clients were further "convinced" by the presiding judge who had formerly been a partner of the lead plaintiffs' lawyer, was receiving payments from that lawyer while she was presiding in this matter, and was thereafter elevated to a higher court due primarily to the efforts of one of the plaintiffs' lawyers. Despite the clear violation of numerous ethics rules, neither the Texas disciplinary system nor the judicial system has found fault with the practices used. While the author ascertained a large part of the foregoing information in the course of personal investigation, see also Passell, Challenge, supra note 75, at B6 (describing the lawsuit and the various ethical violations).
250. For an example of a case where the client refused to accept a settlement offer despite being urged to do so by the lawyer, see Augustson v. Linea Aerea Nacional-Chile S.A., 76 F.3d 658 (5th Cir. 1996).
251. The Committee does permit charging higher contingency fee percentages as stages in the claims process advance. Formal Op. 94-389, supra note 1. It never perceives, however, that charging higher risk premiums also compensates the lawyer for the risk that the client will refuse a settlement offer and force the attorney to proceed to a more advanced stage such as initiating discovery or going to trial. In some cases, the graduated fee structure is intended to dissuade the client from refusing to accept a settlement offer which the lawyer believes ought to be accepted. See Letter from Thomas M. Gibson to Steven Krane, Ethics Comm., Ass'n of the Bar of New York City 1 (Dec. 1, 1995) (seeking ethical guidance regarding a proposed contingency fee in a patent infringement case) (on file with the Fordham Law Review). In one situation, the proposed fee structure was "25% of the recovery resulting from a settlement before the pre-trial stipulation is filed" with "50% of the recovery" taken "[a]fter the pre-trial stipulation is filed." Id. The attorney stated: "The reason for the conditions is that I do not want my client to demand that I try the case if settlement is more sensible." Id. 150. Mississippi State Bar v. Blackmon, 600 So. 2d 166, 176 (Miss. 1992) (Banks, J., dissenting).
252. At first blush, it appears that the Committee distinguished - for ethical purposes - the charging of standard contingency fees in cases where early settlement offers were made and accepted from those where the offer was rejected. Thus, Opinion 94-389 provides that "to pass ethical muster a contingent fee agreement [need not] . . . limit the percentage recovery on the amount originally offered . . . if the client rejects the early offer." Formal Op. 94-389, supra note 1. This suggests that if the early offer is accepted, then a standard contingency fee would not pass ethical muster. In a turn of phrase that may properly be deemed "slippery," however, the Committee then went on to reject any limitation on the use of standard contingency fees where the early offer was accepted. Thus, Opinion 94-389 adds that there is no basis in the ethics codes for "limiting contingent fees on the amount of an early offer." Id. 152. See Model Rules, supra note 1, Rule 1.16(a)(3); Model Code, supra note 1, DR 2-110(B)(4).
253. Formal Op. 94-389, supra note 1.
254. See Kaushiva v. Hutter, 454 A.2d 1373 (D.C.), cert. denied, 464 U.S. 820 (1983).
255. See Lester Brickman, Setting the Fee when the Client Discharges a Contingent Fee Attorney, 41 Emory L.J. 367, 380 (1992).
256. Id. at 386. Thus, in jurisdictions such as Illinois, Minnesota, New York, Washington, Hawaii, and Massachusetts, a lawyer who discovers - after agreeing to represent the client - that the case is a loser can nonetheless obtain a fee by inducing the client to terminate the lawyer. Id. at 382-83. To be sure, if the termination is for cause, then the lawyer is not entitled to a fee. Id. at 393. What constitutes "cause," however, is an elusive concept. Lawyers can induce discharge by being unavailable to their clients and by otherwise causing the client to lose confidence in the lawyer. It is very difficult in such circumstances for clients to prove that the discharge was "for cause." Clients generally are unaware of the need for and the means of creating a paper trail to document grounds for discharge. Id. at 395-97. In such circumstances, lawyers can shift the risk of loss, which they initially share, entirely to the client.
257. Counting the risk of termination as a basis for justifying a standard contingency fee also runs afoul of a recent New York Court of Appeals decision, In re Cooperman, 633 N.E.2d 1069 (N.Y. 1994). Cooperman reinvigorated the client discharge rule, first articulated in Martin v. Camp, 114 N.B. 46 (N.Y.), reh'g denied, 114 N.E. 1072 (N.Y. 1916), modified, 115 N.E. 1044 (N.Y. 1917), that declares it a first principle of fiduciary law that a client can terminate a lawyer for any reason without suffering any penalty. Lawyers have circumvented the client 'discharge rule by collecting fees in advance for services to be performed and denominating them as nonrefundable. If a client terminated the lawyer prior to completion of the task, then the unearned part of the fee would be forfeited. That would, however, effectively penalize the client for exercising his right to terminate the lawyer or at least chill the discharge right. Accordingly, the Cooperman court declared that nonrefundable retainers were unethical and illegal because they penalized a client's right to discharge an attorney. See Cooperman, 633 N.E.2d at 1073; Brickman & Cunningham, A Response, supra note 30, at 14. When the Committee stated that contingency fees are permissible in all instances because "[t]he lawyer is also being compensated for the risk she assumes that the client will fire the lawyer," Formal Op. 94-389, supra note 1, it adopted a position in opposition to the policy basis for Cooperman. The Committee's position is that a component of the contingent fee, that is, some part of the 33% to 40% standard contingency fee, reflects the risk of termination and is therefore justified by that risk. To compensate for the risk of termination, the lawyer adds a component to the fee. But that is precisely what Cooperman forbids. A lawyer charging a standard contingency fee which includes a fee component to compensate the lawyer for the loss of expectancy upon termination is penalizing a client for exercising the right to discharge the lawyer. Moreover, the penalty being exacted is one which is applied to all clients, not just those exercising the right to discharge the attorney. This practice, which the Committee acknowledges and approves of, massively increases the penalty exacted against tort claimants for possessing a right of discharge. Note that it is the ABA's analysis - not lawyer practice - that creates the Cooperman problem. It is the Committee in its desperate quest for risks to justify charging standard contingency fees that asserts that lawyers effectively add a charge to their contingency fees to compensate themselves for the risk of termination. There is no evidence for this assertion and it is inconsistent with the historical record regarding contingency fee charges.
258. I have described the Committee's position on contingency fees as effectively a declaration that contingency fee clients are sheep to be shorn. See Hearings on Contingency Fee Abuses Before the Senate Judiciary Comm., 104th Cong., 1st Sess. (1995) (answers of Lester Brickman to written questions posed by Senators Orrin G. Hatch and Strom Thurmond) (on file with the Fordham Law Review). 159. Formal Op. 94-389, supra note 1.
259. As noted earlier, see supra text accompanying notes 73-74, the best the Committee could muster was to acknowledge that "there may . . . be special situations" where charging a standard and substantial contingency fee in a case without risk and where the "lawyer was reasonably confident that as soon as the case was filed the defendant would offer an amount that the client would accept," Formal Op. 94-389, supra note 1, might not be appropriate.
260. Thus, the plaintiff bar is in total agreement with the ABA that the appropriately sufficient ethical response to contingency fee abuses is to prosecute those who charge unreasonable and excessive fees. In an initiative sponsored by California trial lawyers titled "Frivolous Lawsuit Limitation Act" and certified to appear on the November 1996 California ballot, the trial lawyers decry the charging of excessive fees and provide for "Relief From Excessive Attorneys' Fees" in § 5 of the Act. After reading the initiative, few can doubt the assertion that "limiting fees" to "reasonable" and "not excessive fees" is simply a subterfuge to confuse the public into thinking that meaningful ethical constraints are being called for when in fact it is the status quo that is being maintained. See illustration, supra page 247.
261. Formal Op. 94-389, supra note 1.
262. Id. (citation omitted).
263. Bok, supra note 29, at 140.
264. See infra note 170.
265. See Lester Brickman, A Massachusetts Debacle: Gagnon v. Shoblum, 12 Cardozo L. Rev. 1417, 1429-30 nn.72-73 (1991).
266. See Brickman, Without Contingencies, supra note 30, at 70-74 (developing the fiduciary concept of informed consent as it relates to the fee bargain).
267. Model Code, supra note 1, EC 5-7.
268. Model Rules, supra note 1, Rule 1.4(b).
269. See Burger Urges Limits on Lawyer Fees in Personal Injury Cases, Boston Globe, May 14, 1986, at 17 (noting that "[i]t is becoming more and more clear that in multiple disaster cases . . ., the transaction between an experienced lawyer and inexperienced lay survivors in negotiating a contract for professional services is not an arms-length transaction" and that "[m]any adults, injured persons or survivors of deceased persons, are no more capable of making a valid judgment on the appropriate-ness of the valid fee contract of 33 or 40 or 50 percent than a 12-year-old child" (quoting Warren E. Burger)).
270. See Rhode, Institutionalizing Ethics, supra note 11, at 714 ("Most bar disciplinary systems decline jurisdiction over fee-related disputes.").
271. See Lester Brickman, Attorney-Client Fee Arbitration: A Dissenting View, 1990 Utah L. Rev. 277, 277-78; see also Margaret Jacobs, Often, Fee Arbitration Isn't Such a Panacea, Especially for Clients, Wall St. J., Nov. 20, 1995, at B11 (stating that arbitration panels are likely to overlook ethical breaches).
272. See Lester Brickman, Attorney-Client Fee Arbitration: A Dissenting View, 1990 Utah L. Rev. 277, 277-78; see also Margaret Jacobs, Often, Fee Arbitration Isn't Such a Panacea, Especially for Clients, Wall St. J., Nov. 20, 1995, at B11 (stating that arbitration panels are likely to overlook ethical breaches).
273. See Lester Brickman, Contingency Fee Abuses, Ethical Mandates and the Disciplinary System: The Case Against Case-by-Case Enforcement, 53 Wash. & Lee L. Rev. (forthcoming Dec. 1996). This conclusion is drawn from the empirical data set forth in the article and from analysis of both reported and unreported disciplinary cases. To elicit this data, bar counsel were surveyed and asked to respond to a hypothetical "aggrieved client" letter sent to a disciplinary board, setting forth at least a prima facie case that a contingency fee lawyer charging a standard contingency fee had grossly overcharged the client because the lawyer almost certainly knew at the outset that the case was devoid of risk, that insurance policy limits or amounts close thereto would almost certainly be tendered with little or no effort on the lawyer's part and that the effective hourly rate of return to the lawyer would be at least $1000 an hour and possibly as much as $2500 per hour. Less than 10% of the bar counsel surveyed even recognized that such an ethical violation may have occurred. Id. An alternative to filing a disciplinary action would be suing the lawyer for breach of fiduciary obligation. This option is rarely resorted to because of the expense of hiring a second lawyer and the unlikelihood of finding a second lawyer who would accept the matter on contingency. In one such instance where suit was brought, the client prevailed. In Richfield v. Heuser & Carr, No. 92 CV 1797 (Colo. Dist. Ct. Jan. 13, 1994) (Order dated Jan. 13, 1994) (on file with the Fordham Law Review), a Colorado law firm was barred from recovering its contingent fee or the reasonable value of its services after a jury found that the attorney "did not disclose to the Plaintiff all of the facts of which . . . [they] knew or should have known would influence the Plaintiff . . . to sign the [contingent fee] agreement." Id. at 2. The plaintiff was injured in an automobile accident and while in the hospital entered into a contingent fee agreement with the defendant which provided that the law firm would receive one-third of any recovery obtained. Plaintiff remained hospitalized for two weeks and incurred nearly $12,000 in medical expenses. Shortly thereafter it was discovered that the responsible party's insurance policy coverage was limited to $25,000. Before a lawsuit was filed against the insured and within four months of the accident, the insurance company agreed to pay plaintiff $25,000. The attorney retained $8333.33 as his one-third contingent fee. Id. at 1. Plaintiff contended that this fee was excessive because the attorney had failed to disclose the following information to her prior to signing the contingent fee agreement: (1) settlement without trial was a probability and would require little effort or legal skill; (2) processing the claim and obtaining a recovery would be accomplished essentially by clerical staff; (3) the attorney would not know at the time of contacting whether a standard one-third contingency fee was fair or excessive, or whether some other fee arrangement would be preferable. See Complaint at 3, id. (on file with the Fordham Law Review) The jury found that the attorney had an obligation to make such disclosures before entering the fee arrangement and because he breached that obligation, was not entitled to the fee for which he contracted. Based upon the attorney's testimony that he personally worked on the case "in the ballpark of 15 hours," the jury found that the reasonable value of the attorney's services was $2250 (15 hours at $150 per hour). Id. at 3 (Order dated Jan. 13, 1994). The judge found this testimony "incredible," stating, "[i]t is difficult to imagine how a lawyer could spend 15 hours on a case such as this." Id. Rather than adjust the quantum meruit award, the judge held that the attorney's breach of fiduciary duty was "serious" and "egregious," and therefore ordered the attorney to forfeit "all fees in connection with the case." Id. at 5. The attorney for the client-plaintiff, Robert Dunlap of Colorado Springs, Colorado recently won a similar case on behalf of a contingency fee client by establishing that a one-third fee, amounting to $33,333.33, was excessive and unreasonable. See Complaint at 3, Eich v. Maceau, P.C., 94 CV 2242 (Colo. Dist. Ct., Apr. 15,1996) (detailing the amount of the fee) (on file with the Fordham Law Review). The client, injured in an automobile accident by an uninsured motorist, recovered the $100,000 maximum allowed by her insured motorist policy three months after retaining the attorney. Id. at 2. The complaint alleged that the attorney failed to disclose to the client prior to agreeing on a fee that proof of the insurance company's liability "would probably require minimal, if any, legal skill and minimal effort."
274. The Committee's fidelity to the status quo may further be gleaned from an exchange between the author and Lawrence Fox, principal author of Formal Opinion 94-389, which took place during a debate over contingency fees at the 21st National Conference on Professional Responsibility, Plenary Session, 1995. In the course of his presentation, Mr. Fox contended that he saw no problem in current contingency practice and that any violations of ethics rules should be dealt with by resort to the disciplinary system. He then went on to acknowledge that the disciplinary system simply does not work to police fee abuses. There is some reflection of this position at page 3 of Opinion 94-389. See Formal Op. 94-389, supra note 1 (addressing "the possibility that . . . the profession's obligation to assure . . . [the] reasonableness [of contingency fees] is sometimes honored in its breach"). By rejecting any interpretation of the ethics rules that would create a self-enforcing mechanism for protecting clients against fee abuses, the Committee gave its imprimatur to preservation of the status quo.
275. Formal Op. 94-389, supra note 1.
276. Id. (citing Lee S. Kreindler, The Letter Should Not Be Sent, The Brief, Nov. 1982, at 4, 38).
277. This three-page, single-spaced letter is referred to as the "Alpert Letter" after its drafter and signatory, Robert L. Alpert, of United States Aviation Underwriters, Inc., an airline insurer. See Randal R. Craft, Jr., The Letter Should Be Sent, The Brief, Nov. 1982, at 4, 4; Kreindler, supra note 176, at 4. For further analysis of the relationship between the Alpert Letter and value-added contingency fees, see Brickman, Without Contingencies, supra note 30, at 109-10, and Horowitz, supra note 8, at 189-90.
278. This three-page, single-spaced letter is referred to as the "Alpert Letter" after its drafter and signatory, Robert L. Alpert, of United States Aviation Underwriters, Inc., an airline insurer. See Randal R. Craft, Jr., The Letter Should Be Sent, The Brief, Nov. 1982, at 4, 4; Kreindler, supra note 176, at 4. For further analysis of the relationship between the Alpert Letter and value-added contingency fees, see Brickman, Without Contingencies, supra note 30, at 109-10, and Horowitz, supra note 8, at 189-90.
279. This three-page, single-spaced letter is referred to as the "Alpert Letter" after its drafter and signatory, Robert L. Alpert, of United States Aviation Underwriters, Inc., an airline insurer. See Randal R. Craft, Jr., The Letter Should Be Sent, The Brief, Nov. 1982, at 4, 4; Kreindler, supra note 176, at 4. For further analysis of the relationship between the Alpert Letter and value-added contingency fees, see Brickman, Without Contingencies, supra note 30, at 109-10, and Horowitz, supra note 8, at 189-90.
280. In addition to airline litigation, value-added contingency fees are common in condemnation proceedings, tax certiorari, and some workers compensation cases. See DeKalb Cty. v. Trustees, Decauter Lodge, 243 S.E.2d 284 (Ga. Ct. App.), rev'd on other grounds, 251 S.E.2d 243 (Ga. 1978); State Dep't of Transp. & Dev. v. Frabbiele, 391 So. 2d 1364 (La. Ct. App. 1980); Mulhern v. Roach, 494 N.E.2d 1327 (Mass. 1986); Milwaukee Rescue Mission, Inc. v. Redevelopment Auth., 468 N.W.2d 663 (Wis. 1991); see also Comparing Attorney Fee Arrangements, 5 Workers Compensation Research Inst., Research Brief 2 (Apr. 1989) (indicating that, in workers compensation proceedings, the value-added method has been adopted by statute in the following eight of the 25 states surveyed: Alabama, Florida, Illinois, Minnesota, New Jersey, Pennsylvania, Washington, and Wisconsin, and also indicating that most states that use the value-added method exclude from attorneys' fees any amounts that have been voluntarily paid or formally offered by the defendant before an attorney entered the case).
281. Kreindler, supra note 176, at 10 ("The effect of the . . . Alpert Letter . . . is to deter claimants from seeking the advice of lawyers experienced in aircrash cases and to poison their minds against the contingent fee."). 180. Id. at 38 (emphasis added). Airline litigation fees today range from 10% to 20%, with many in the 10% to 12% range. For each crash, leading plaintiff lawyers establish a specific percentage which they offer to all claimants who retain them. If a claimant is referred to one of these attorneys, then the claimant will have an additional 10% to 20% tacked on to the bill by the referring lawyer.
282. Formal Op. 94-389, supra note 1.
283. As noted in note 178, supra, value-added contingency fees are also used in condemnation, tax certiorari, and some workers compensation matters. In these instances, lawyers charge contingency fees that apply to the excess over extant offers.
284. See Stephen Gillers, Regulation of Lawyers: Problems of Law and Ethics 148-151 (4th ed. 1995); see also Brickman et al., Rethinking Contingency Fees, supra note 60, at 26 (discussing the co-authors' contingency fee proposal which would "establish[] a procedure designed to induce early, substantial offers by defendants").
285. See Stephen Gillers, Regulation of Lawyers: Problems of Law and Ethics 148-151 (4th ed. 1995); see also Brickman et al., Rethinking Contingency Fees, supra note 60, at 26 (discussing the co-authors' contingency fee proposal which would "establish[] a procedure designed to induce early, substantial offers by defendants").
286. See Brickman et al., Rethinking Contingency Fees, supra note 60, at 26 (stating that making early settlement offers would enable defendants "to divert to injured claimants large sums of money which would otherwise be paid to both plaintiffs' and defendants' attorneys").
287. See Armbrister, supra note 40 and accompanying text.
288. See American Trial Lawyers Association, supra note 8, at 4.