Illinois Law
Illinois Selecting & Managing Counsel - Business Orientation
- Selecting & Managing Counsel - Business Orientation
Selecting & Managing Counsel - Business Orientation
No one should fall into the trap of believing the tired old saying that, "lawyers are all alike." Lawyers are not all alike. Every lawyer must have a four-year college degree before being admitted to law school. However, the degree can be in any area, so a particular lawyer might have a degree in English, accounting, biology, or any other academic subject. In law school, students study many required subjects but they also have the opportunity to study areas of special interest, such as environmental law, family law, or tax law. After law school, law students must pass a state bar exam to practice law in that state. The United States is broken down into many different systems of courts, known as bars. Each bar sets its own requirements for lawyers who practice there. A lawyer who is not a member of the Illinois bar cannot practice law in Illinois absent special permission. Bars may also have special categories of lawyers who are certified to practice in particular areas.
The businessperson who exercises care in choosing a lawyer intelligently can be satisfied because there is a right way to choose legal services and it does make a difference. The following three-step process can help a business find the right attorney for its legal needs.
Step 1: Preparing a List
Advertising
Ever since the U.S. Supreme Court lifted the ban on attorney advertising, there has been an explosion in the amount of print and broadcast advertising done by the thousands of Illinois lawyers eager to reach new clients. However, not all forms of lawyer advertising are permitted. For example, a lawyer is never allowed to solicit business from an accident victim in the hospital unless specifically invited there by the victim. But while some forms of advertising are banned, the range of permissible forms of advertising is quite broad and can include some fairly outlandish forms of self-promotion.
Given the amount of advertising that some lawyers do, the average person could easily rattle off the names of at least a few lawyers who practice in his or her community. The trouble, of course, is that the best known attorneys are not necessarily the best practitioners of their profession. While it may be easiest to look up the section on attorneys in the phone book or call a telephone number broadcast on radio or television, it often pays to use other sources of information. A local bar association can be a source of names. Some industrial trade organizations have attorney referral networks. This book can also help businesspersons find competent, peer-referred attorneys to handle their legal affairs. Consulting one or more of the lawyers listed at the end of the chapters is an excellent way to start the search for a good lawyer.
Personal Referrals
Another good source of attorney names is personal referrals. Friends and relatives are often able to recommend a lawyer. Business associates may also be a good source of names. A trusted accountant or insurance agent might also be able to recommend a competent lawyer. The benefit of a recommendation from a business associate is that an accountant or insurance agent regularly consults with attorneys on a broad variety of issues and may be in a better position than a friend or relative to steer a novice toward the best lawyer for his or her needs.
Regardless of who recommends a name, ask specific questions about the lawyer. How does the person know the lawyer? Has the person ever consulted the lawyer? If so, for what reason? What are the lawyer's strengths and weaknesses? Does he or she return phone calls promptly and keep the client informed of the process of the case? What outcome was the lawyer able to get? Is the lawyer a member of the Illinois bar? A referral that seems promising at first may not help much if it turns out that the lawyer practices a different area of law or is not a member of the Illinois bar, or if the person recommending the lawyer knows very little about him or her.
Referral Services
Anyone who would be more comfortable talking with someone who shares a similar background should not hesitate to seek out such an attorney. Some women may turn to other women to handle their legal affairs because they believe that other women can empathize with the unique legal problems women face. A person of color might prefer to give business to another person of color, or someone in the gay and lesbian community might believe that a person from that community can best represent his or her interests. Law schools have made tremendous strides in recruiting more diverse student bodies in the past two decades and consequently, the ranks of lawyers today have swelled with competent practitioners of every race, gender, ethnicity, and lifestyle. In order to make the legal community more responsive to our changing society, several organizations have sprung up in Illinois that refer callers to lawyers sensitive to the needs of a specific race, gender, ethnicity or lifestyle. A person who would feel more comfortable hiring a lawyer from a particular background should not hesitate to seek out names from one of these special referral organizations. Most of these organizations have no fee associated with their services or their fees are paid by the lawyer, not the businessperson.
Once the businessperson has a list of a few potential lawyers it is time to think about the next step-researching the attorneys on the list.
Step 2: Researching the Attorneys on the List
Reputation
An attorney's reputation for technical skill is important, but only the individual can determine its relevance to a particular legal matter. Consider that a lawyer who has built a sterling reputation for his or her competent handling of complex litigated probate disputes may be overqualified to draft a simple will. Similarly, a lawyer whose head is full of knowledge gained from representing large corporations may need to start researching from scratch if asked to represent a small start-up company. Savvy individuals with a variety of legal concerns often employ different lawyers to work on different matters because they realize no lawyer can be all things to all people for every type of legal question. Certainly if the case involves a lot of money or the company's reputation is at stake, as is the case when a company is accused of white collar crime, then the business wants to find the very best attorney available to handle the matter. For more routine matters, in which smaller dollar amounts are at stake, a less experienced lawyer may actually be a better fit, as well as more affordable.
As important as a lawyer's technical reputation is, his or her ethical reputation may be even more important. It pays to ask around about a lawyer's ethical reputation, for a lawyer's reputation is well known among other professionals. To find out about an attorney's reputation, the individual should ask others with similar needs or problems for references-perhaps someone who has gone through a similar situation. A lawyer should be willing to provide references or a list of past clients, and the potential client can then check with those past clients. Beware of lawyers with poor ethical reputations. The State of Illinois maintains the Attorney Registration and Disciplinary Commission, with locations in both Chicago and Springfield. The Commission investigates charges of unethical conduct against attorneys and may seek disciplinary action against attorneys. Potential clients may contact the Commission to inquire into an attorney's disciplinary history. A lawyer who does not follow the rules of his or her own profession may not handle the case properly either. To contact the Attorney Registration and Disciplinary Commission in Chicago, call (312) 565-2600 or 1-800-826-8625. In Springfield, call (217) 522-6838 or 1-800-252-8048.
Despite the considerable criticism they get in the media, lawyers are held to very high ethical standards. For every example of misconduct reported in the media, there are literally thousands of honest and reputable attorneys that will do the right and ethical thing. Putting effort into choosing a lawyer can go a long way towards eliminating the risks of retaining an unethical attorney.
Specialization
Following trends in other professions, many lawyers today devote themselves to one area of law and present themselves as "experts" in that area. Because it is wise to get an attorney whose experience matches a company's particular need, many decision makers will be tempted to hire a lawyer described as an expert in his or her area of law. This may not always be the best course of action. Illinois does not certify legal specialists, and a lawyer should not claim to be a specialist, specialized, or certified in any area of law. Some lawyers may nevertheless use similar terminology. One attorney may call herself a tax expert because she has handled tax matters for over twenty years, while another attorney may call himself a tax expert because, although he only passed the bar last month and is still quite inexperienced, he plans to devote himself exclusively to tax matters. Clearly one expert is not equal to another. Buyer beware!
Another important point to keep in mind is that not all legal matters require the attention of a specialist. Just as one would not automatically turn to a medical specialist for a common cold, one need not turn to a legal specialist for every routine legal matter. Chances are good that if a local attorney engaged in the general practice of law has done a fine job on a variety of legal matters in the past, he or she can be counted on to handle routine legal matters in the future. Also, because most specialists will be clustered in larger cities, a business in a small community may choose to hire a generalist practicing locally for the ease and convenience of being able to work with a member of the community.
Firm Size
Another important issue to consider is whether to go with a solo practitioner, a lawyer in a small firm, or a lawyer in a large firm. Recognize that in most cases it is an individual attorney who will work on a particular file and with whom the client will have the most interaction. An individual may not immediately notice a difference between a solo practitioner, a lawyer at a small firm, and a lawyer at a large firm. A solo practitioner or a lawyer practicing in a small group may be able to provide more personalized attention to a file but a larger firm can bring a depth of resources that most small firms cannot. Lawyers at large firms typically charge more for their services, however, so an individual may not want or need to pay extra for a relatively straightforward legal problem. Again, it all depends on the needs of the particular individual.
Location
A lawyer's location is another obvious consideration. A lawyer in the client's hometown may not always be the best choice. If many meetings will take place in a city other than where the client lives, it may be advantageous to hire an attorney who lives in the other city. Most larger firms in Illinois are centrally located in downtown office buildings in major cities. While these locations may provide the most convenient access to courthouses, banks, and corporate headquarters, they may not be the most convenient for the individual client. Most lawyers charge for transportation time and the time necessary for them to get to and from meetings and court appearances, so it may be wise to choose someone located near the courthouse or any other location where meetings will take place. If a particular matter will not require many meetings or trips to the courthouse, the convenience of a downtown office may be unnecessary. Of course, because nice office space downtown is usually more expensive than office space in a suburb or small town, downtown lawyers may have higher overhead expenses that they pass along to their clients.
Step 3: Interviewing the Attorneys
Initial Consultation
It is not reasonable for a business to expect free advice from a lawyer, but good attorneys will welcome opportunities to spend time with potential clients answering questions and being compared with their peers because they know their knowledge and experience will show through. The initial consultation is no time to be shy. Years ago, many lawyers liked to think that they were above the need to market their practice or to pursue clients. Some law firms reflexively recoiled from the suggestion that a potential client would ask them to show why their firm was the best to handle a matter. Times have changed and lawyers today are accustomed to sitting down with potential clients to discuss representation.
An initial consultation can be more productive if the individual takes contracts, photographs, other relevant documents, and a list of questions to the meeting. At the initial interview the individual should be open and honest with the attorney. It is best not to embellish or hide facts because doing so may dilute the strength of a case. Some facts, such as the events in dispute occurring some time ago, may make a case impossible to win because of the statute of limitations, and the lawyer can explain that any money spent pursuing the claim would be money wasted. Some facts are less damaging than the individual assumes, and the lawyer can minimize their effect by acting quickly. The attorney may feel that a conflict of interest prevents him or her from representing the client. For example, the lawyer may already represent the opposite party in a dispute. Most of what an individual tells a lawyer in an interview is confidential and protected by the attorney-client privilege.
Consulting a lawyer does not obligate the business to employ or to retain that lawyer. Most initial consultations are either free of charge or available for a nominal fee, especially if the businessperson decides not to employ the attorney consulted. Some attorneys will charge for the initial consultation if they are subsequently hired.
It is important to note an important distinction between consulting an attorney and retaining that attorney. Only retaining an attorney obligates him or her to act on behalf of the client. Many Illinois residents have learned this lesson the hard way. A businessperson may have consulted a lawyer about his or her legal problem and thought that the case was being handled so stopped taking steps to pursue a claim. Meanwhile the lawyer allowed the statute of limitations to run out on the claim because the lawyer believed that he or she had not been retained to act on the client's behalf. Many legal malpractice suits have centered on whether an original office visit with a lawyer constituted a consultation or a hiring. The lesson to learn is that before leaving a lawyer's office, the individual and the lawyer should be absolutely clear whether the lawyer has or has not been hired.
Personal Chemistry
Much of being a good attorney has to do with responsiveness, understanding of a client's particular situation, and the ability to communicate. The lawyer who has bad rapport with a client may not be an effective representative of the client's interests. Because each person is different, the chemistry between a client and an attorney is one of the most important elements of their relationship. Smart shoppers should ask many questions. Is the lawyer listening to the client's story or does he or she interrupt in the middle of sentences? Does she present a variety of options to pursue or does she insist there is only one right way to do everything? Does the lawyer try to dominate the conversation? Are the attorney's business philosophy and approach to risk-taking compatible with the client's attitude? Is the attorney open to working with in-house counsel to lower bills? Is this someone the client wants to spend time with? Gut feelings at this stage of the process can tell someone much about what it would be like to hire this person. After the decision is made to hire an attorney, the client has a right to expect that the attorney will spend time explaining the progress of matters he or she is working on and to involve the client at appropriate times. If the attorney is difficult to work with early on, it is a good bet the relationship will be tense later.
Malpractice Insurance
It may be an uncomfortable subject to raise with an attorney whom one has just met for the first time, but it is important to determine whether he or she carries malpractice insurance. The financial losses stemming from a poorly handled case can be quite large. If the lawyer does not carry malpractice insurance, it may be impossible for the client to recover any losses if the lawyer commits legal malpractice.
Experience
Many individuals naïvely assume that the longer a lawyer has been in practice the more experience he or she has. This assumption is frequently unfounded. Relevant experience in a particular area of law is far more important than the total number of years that a person has practiced law. A young attorney whose practice has been narrowly focused on one area of law may have far more insight into how a problem should be handled than an attorney with more years of practice in a broad variety of legal matters. In addition, because laws change so quickly, in some cases a recent graduate may have greater knowledge of a particular area of law than a more senior attorney. The potential client should ask pointed questions about a lawyer's specific experience handling similar cases.
In some large firms, a senior partner may agree to handle a matter, then assign most of the work to less experienced associates. It pays to ask who is going to work on a file, and discuss that person's experience and his or her success in representing cases or doing similar work. Still other lawyers may be eager to take on a case in an area of law in which they have little experience, reasoning that they can simply learn the relevant law as they go along. Not having experience in the relevant area of law need not rule out a lawyer. A lawyer inexperienced in one area of law may still be a terrific choice to handle a case, but it is appropriate to ask how long it will take the lawyer to learn the relevant laws and whether the client is expected to pay for the educational time.
Estimate of Time
The lawyer ought to be able to estimate a timetable for completing the case. This will depend on many variables, including the complexity of the matter, whether the lawyer expects to go to trial, how cooperative all parties are, and the lawyer's workload. Asking for a timetable is likely to bring a number of these issues out into the open. A relatively simple matter may take a long time to complete if a particular lawyer is too busy to devote his or her full attention to it. A lawyer with very little experience may reveal that inexperience if he or she cannot describe the steps necessary to complete a task and estimate how long each will take.
Cost
Money should be discussed at the initial meeting with an attorney. It is important to know what will and what will not be charged and at what rates. Although a lawyer may not be able to give an exact cost, a lawyer with experience should be able to provide a ballpark estimate of his or her fees.
An individual should not feel uncomfortable comparison shopping for a lawyer. Hiring an attorney can be a major outlay of resources so, like any other expenditure, a businessperson should find out such details as how and how often bills are sent out, whether the firm requires a retainer, and whether the firm has minimum billing increments. Find out how often the lawyer sends out status reports about a case or matter. Finally, as with any business arrangement, get your agreement in writing. Lawyers have several different ways that clients may pay the fees for their services:
Flat Fees
The simplest fee payment option is the flat fee. A lawyer charging a flat fee simply quotes a fee for which he or she will do the work. Flat rates were traditionally quite rare. A lawyer often has no way of knowing for certain how complex a matter is until investigating it and can be understandably adverse to committing to a flat fee in advance. Recently the flat fee has been growing in popularity. Much of this growth is client-driven and stems from clients' desire to better predict and control the rising cost of legal representation. Today, lawyers are increasingly willing to discuss the possibility of flat fees for relatively simple legal matters such as regulatory compliance filings or friendly acquisitions. The client should bear in mind, however, that some lawyers who advertise low flat fees for simple matters rarely ever find that a client has a simple matter. Sometimes the low advertised flat fees are merely a ploy to get a potential client in the door in hopes that, once in the office, the client can be convinced that his or her needs are actually far more complex and therefore justify much higher fees.
Hourly Rates
For many matters a lawyer will charge an hourly rate for time spent on a file. The hourly rate is usually a reflection of the lawyer's competence, experience, and overhead expenses. The lowest hourly rate is not necessarily the best deal for the business. An experienced lawyer with higher rates will usually be able to complete a matter more quickly than a less experienced lawyer with lower rates. A common complaint about hourly rates is that they give the lawyer no incentive to handle a matter in a timely fashion. After all, who wants to work quickly and efficiently if it means making less money? Paying for legal services at hourly rates is a time-honored tradition at American law firms that is unlikely to disappear soon, and can unfortunately open the door to much disagreement over how long it should have taken a lawyer to complete a task. Because law firms are under increasing pressure from clients to hold down their bills, today many attorneys are willing to discuss "blended rates," an arrangement whereby a partner's billing rate is blended with an associate's lower billing rate. Before agreeing to hire a lawyer to work for an hourly rate, it is appropriate to request a written estimate of the hours that will probably be needed, as well as an estimate of how much money will be necessary for miscellaneous expenses.
Retainer Fees
There are actually two kinds of retainer fees used in the legal community. The first is a variation of the flat fee. Rather than paying a lawyer a flat fee to handle a specific matter, some wealthy individuals or large corporations will simply pay an attorney a lump sum each year to retain that attorney for the year. In return for this kind of retainer fee, the lawyer agrees to be on call for any legal problems that arise or to manage routine day-to-day legal affairs. The average business does not have a sufficient volume of legal questions to require this type of set-up.The more common retainer fee is actually just an advance on the hourly rate, described above. If it is the first time that a lawyer has represented a particular client or if there is any question about the client's ability to pay, the lawyer may insist upon the payment of a large retainer up front. This money is then placed in a special account and the costs of legal services provided are then deducted from that account. A client who agrees to pay this type of retainer is still entitled to periodic written statements detailing how much has been deducted from the account for legal services and, of course, the client is entitled to any money remaining in the account when legal representation has been concluded.
Contingent Fees
Another common legal fee arrangement is the contingent fee. Years ago, contingent fees were unheard of in the business context, but today more businesses are seeking these agreements from their legal counsel. The contingent fee is most common among personal injury attorneys who charge for their services by taking a percentage (the going rate is one-third) of whatever damages are recovered or the amount of money saved for the client, whether through an out-of-court settlement or a jury award. The percentage that a lawyer asks for depends on the difficulty of the issues, the amount of money at stake, and the skill and experience of the attorney. Essentially, when an individual asks a lawyer to take a case on a contingency basis, the lawyer is being asked to gamble on the outcome of the case. A case with only a very slight chance of success can consume a great deal of the lawyer's time and energy and yield no fee if the case is lost. In that case, an individual may need to offer a lawyer a larger percentage of the award in order to convince him or her to take that risk. Conversely, an individual with a case that is very likely to result in a large award and that presents few procedural difficulties may be able to bargain down the contingent fee to a smaller percentage of the award.A person may be better off with a more experienced attorney because, although the fee will be higher, so will the award. If a less experienced attorney handles a lawsuit, and wins a $300,000 award, the client keeps $200,000 and the lawyer gets $100,000. But if an attorney with superior legal talents wins an award of $600,000, the client keeps $400,000 and the attorney gets $200,000. Hiring the less experienced attorney would therefore cost the business the extra $200,000 it would have received if the more experienced lawyer had handled the case.
There are several reasons to be especially careful when hiring a lawyer to work on a contingent fee basis. Many law firms specializing in these kinds of cases make their money by handling a large number of cases and settling them quickly. Given the typical contingent fee arrangement, some lawyers are motivated to accept early settlement offers.
By settling early, these firms make a lot of money very quickly. This tactic is popular with some lawyers as they take a cut of the settlement at a time when they have few expenses and because they have not spent the time and money to fully prepare a case. Be wary of such firms. The client has the right to refuse any settlement offer made and should consider doing so, especially if the case is a strong one that may cause a jury to award a large sum of money. Remember that the law gives an individual only one chance to make a case before a jury. Only under very special circumstances can someone go back to court to ask a jury for more money just because the original award money ran out after a period of several years.
Although contingent fee agreements are quite popular with some attorneys, they are inappropriate in some types of cases, and ethics rules forbid lawyers from accepting contingent fee arrangements in criminal cases.
Variable Contingent Fees
A third payment option becoming fairly popular among some lawyers is the variable contingent fee arrangement. In this situation, the attorney's fees vary depending upon when the case is settled. Typical arrangements specify that the attorney collects 20 percent if the case settles before initiating a formal lawsuit, 25 percent if the case settles within a year after a lawsuit is filed, and 33 percent of any damage award received any time after a year. With this type of arrangement, the lawyer has an incentive not to settle too early because the fee will be greater if a larger settlement can be won by going to trial.It is wise to clarify the exact terms of a variable contingent fee arrangement before signing it. Almost all contingent fee agreements stipulate that the attorney's expenses are first deducted from any award won, and the remainder of the money is then split on the one-third/two-thirds basis. Thus the statement common in the advertisements of many lawyers, "no fee unless we win your case," does not mean that a client pays nothing for legal representation. A lawyer's fee will be a percentage of any award and therefore may be nothing, but win or lose, a client is almost always responsible for the attorney's costs. A client must make sure, therefore, that he or she fully understands what kinds of costs he or she is expected to pay before signing a contingent fee agreement.
Miscellaneous Expenses
Many disputes that clients have with lawyers over money stem from a misunderstanding of the difference between "fees" and "expenses." Regardless of which of the types of fee plans discussed above a client chooses, most lawyers will charge for their expenses in addition to their fees and regardless of the outcome of the case. Many a contingent fee client, lured by an attorney claiming, "no fees unless we recover for you," has been shocked to find out, after failing to recover any money on their claim, that they owe money to their lawyer. The client may indeed pay no fees unless the case is successful but may still be responsible for sizable expenses incurred handling the case, regardless of its outcome. For example, an attorney might charge for travel time, secretarial overtime, delivery services, court costs, filing fees, deposition fees, expert witness fees, investigation expenses, and the initial consultation. Many law firms bill incidentals such as photocopying and postage at rates far higher than what those services would cost at an independent copy center or post office, so it is important to discuss specific details. The businessperson should also ask about referral fees. Some lawyers refer clients only to other lawyers who will split the fees with them. Thus the individual who employs a lawyer referred by another lawyer may be inadvertently paying for two attorneys but getting the services of only one.
Benefits of the Process
Unless the business is under extreme pressure to resolve a legal matter immediately, it is far better to spend time choosing a good lawyer than trying to undo a poor decision later. If a businessperson chooses well, the job of working with counsel should be far easier. It is always the prerogative of the client to change lawyers before a legal matter has been concluded, but doing so can be costly and time consuming. If a client fires his or her attorney before a matter is settled, the attorney is owed for the reasonable value of the time that has been spent on the matter, even if a contingent fee agreement stated that the attorney would be paid only if the case were won. All of the files on the matter belong to the client and must be turned over to the client on termination of the lawyer's services.
Resources
Illinois State Bar Association, Illinois Bar Center, 424 South Second Street, Springfield, IL 62701, phone: (217) 525-1760, fax: (217) 525-0712.
The Chicago Bar Association, 321 South Plymouth Court, Chicago, IL 60604, phone: (312) 554-2000.
The Chicago Council of Lawyers, Room 800, 220 South State Street, Chicago, IL 60604, phone: (312) 427-0710.