Roundtable
Discussion - Part I
Case Evaluation
Jan.
28, 2004
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(Front)
Kelly Centofanti, Stadler & Centofanti, LLC; Mark Silverman,
Legal Action of Wisconsin, Inc.; Charles Barr, Croen &
Barr, LLP; (Back) Jeffrey Hynes, Jeffrey S. Hynes & Associates,
S.C.; Jay Urban, Urban Taylor & Stawski, Ltd.; Merrick
Domnitz, Domnitz, Mawicke & Goisman, S.C.
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One
of the most important aspects of practicing law is the effective
evaluation of cases. Taking on the wrong cases or clients can
be disasterous to a firm’s finances and its reputation. Wisconsin
Law Journal editor Tony Anderson sat down with a panel of veteran
lawyers to learn how they approach case evaluation and to find
out some of the pitfalls they face.
Wisconsin
Law Journal: Let’s go around the room quickly
and talk a little bit about your different practice areas and
how that impacts the way that you approach case evaluation.
Mark
Silverman: I am the staff attorney with Legal Action of Wisconsin.
We receive a mix of funding. Our biggest funder is the Legal Services
Corporation in D.C. We also have some grants, so our clients are
all low-income people. With grants come grant restrictions. So
one of the things that we have to look at for evaluation is whether
the client is eligible and whether it’s a kind of case that
we’re allowed to take. That’s a little bit of an extra
level of evaluation that we have to go through compared to the
private attorneys.
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“For
a plaintiff’s personal injury practice, there may not
be a more important aspect or component of the practice
than to be able to evaluate which cases you ought to be
spending your time and money on.”
Merrick
Domnitz,
Domnitz, Mawicke & Goisman, S.C.
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Jeffrey
Hynes: I come from the unique perspective of an employment
lawyer who has worked on both sides and also worked in government
practice. I was with a large defense firm in the 1980s and left
that firm to start a plaintiff’s-side practice which we built
from the ground up. My general comment based on that experience
is that, while screening is important for corporate lawyers, I
think it’s absolutely imperative to the survival of a plaintiff’s-side
practice. Plaintiff’s-side law practices that fail to effectively
screen and evaluate cases eventually wither on the vine.
Merrick
Domnitz: I’m a plaintiff’s personal injury attorney
emphasizing, I guess, mostly insurance, bad faith, and general
liability cases. I dabble in medical malpractice from time to
time when life requires me to do so. I would echo what Jeff said.
I think that, for a plaintiff’s personal injury practice,
there may not be a more important aspect or component of the practice
than to be able to evaluate which cases you ought to be spending
your time and money on.
The
minute you evaluate a case as something you’re going to be
involved in, you start spending money. It doesn’t take long
to dissipate as much money as you can make on the good cases.
You can bring it in the front door as fast as you want. If you’re
not evaluating your cases right, it will go out the back door
just as fast.
Charles
Barr: We have a small firm. It’s two attorneys. We do
civil litigation, usually commercial disputes and consumer matters,
but a lot of other things kind of along the fringes of that that
make our practice harder to categorize than the practices of many
of the other attorneys sitting around the table here.
But
case evaluation is important for us too, particularly if we’re
on the plaintiff’s side. Just as often we’re on the
defense side, and then it’s somebody already being sued and
it’s less of an issue… Because our practice is kind
of unstructured, we probably take a somewhat unstructured approach
to case evaluation, sometimes to our detriment. We’ve learned
some hard lessons.
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“If
we were to take a lot of cases and lose, I think the judge
would wonder about us knowing what we’re talking about
in the next case that comes.”
Mark
Silverman,
Legal Action of Wisconsin, Inc.
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Kelly
Centofanti: I am a plaintiff’s personal injury lawyer,
with Stadler & Centofanti. I come from a little bit different
perspective, and that is that all my cases are referred. So I
spend a lot of time talking to lawyers, who’ve already taken
the case and sometimes spent considerable money on the case, explaining
why not only do I not want to spend my money on the case but they
shouldn’t have either. So I talk about this topic a lot with
them to try to explain some of the knock-out factors that instantly
tell you it’s not a case to take.
Case
evaluation to me means analyzing it to determine whether or not
money should be spent on it. When the plaintiff’s personal
injury client comes to us or to one of my referring lawyers, they’re
asking us to spend our money on their case and to gamble that
there will be a fee at the end. Although plaintiffs in this state
are lucky that there are lawyers who do contingent-fee work, they
do have to find someone who will be willing to gamble on the case.
That means that the clients have to agree to do certain things,
be cooperative, meet with you to prepare, and be interested in
the case. They also have to have the facts to support it.
Jay
Urban: I think all the folks that are doing plaintiff law
do it a little bit differently even though there are some overriding
concerns that we all have, especially on a contingency fee.
Our
practice is about 80 percent plaintiff’s personal injury
and about 20 percent employment law, which Jeff does. We have
a karma approach to case selection, which means if we do good
to others, good will come back to us. As a result, I have a fair
amount of referring lawyers...
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“There
are times when you may win and you may get paid. … But
if you’re not going to do something good for the client,
I don’t think you should take it.”
Kelly
Centofanti,
Stadler & Centofanti, LLC
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Sometimes
we’ll take a case that isn’t a very good case. In fact,
lots of times we’ll take cases that aren’t very good
cases. But we’ll be honest with the clients up front that
this isn’t a very good case; we’re not going to invest
very much time or very much money. Maybe you do a little good
will. We’ll take cases pro bono.
My
mom said when we were growing up, you can pick your friends but
you can’t pick your enemies. So I just try to pick good friends
and then hopefully get better cases that way. But I do agree with
Ric. When it comes to dabbling in medical negligence cases, those
concerns go out the window. You’ve got to be looking at,
can I make money on this case.
WLJ:
As you begin evaluating cases, what do you see as the most important
factors that you consider?
Silverman:
I should mention that at Legal Action I primarily do eviction
defense. So after evaluating in terms of our funding source and
whether the client is eligible and whether it’s the proper
kind of case, then I evaluate in terms of whether there is a defense
to the eviction; and then, if there is no defense, is there room
for negotiation.
The
ultimate goal of mine is always to be sure that the person or
family remains living in their rental unit so that they don’t
become homeless. Most of our clients in the eviction area are
facing homelessness if they’re evicted.
When
someone was mentioning evaluating their cases in terms of whether
it’s a good case or a bad case, I thought of some of the
harm that would result if I were to take a case and lose, not
only harm to the client. But because eviction cases in Milwaukee
County are pretty much in front of the same judge, if we were
to take a lot of cases and lose, I think the judge would wonder
about us knowing what we’re talking about in the next case
that comes.
So
we don’t want to hurt our client, but we wouldn’t want
to be perceived as someone who doesn’t understand the law.
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“Client
baggage is the number one reason that I will turn down
a case. I think a case with good facts and a bad client
spins worse than a case with bad facts and a good client.”
Jeffrey
Hynes,
Jeffrey S. Hynes & Associates, S.C.
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Urban:
I don’t know that we’ve ever put pen to paper, but we
have sort of a three-pronged approach. First, we probably look
at the caliber of the plaintiff or the caliber of the client.
I’m not so concerned about the size of the case. I’ll
take a soft tissue case if the client is of very, very high caliber.
I’m
not talking about education and things like that, but somebody
who’s able to explain what happened and is likeable. I think
that a lot of times people forget about the likeability factor
in litigation. We’re all judged by human beings in the system.
Second
would probably be the quality of the case, whether there is good
liability, good damages, good causation. Sometimes you get two
out of three. Well, as Meatloaf said, that ain’t bad.
The
third factor we look at is sort of the energy or the inertia that
the firm has to put into the case and try to match that up with
the first two factors. If it’s a relatively straightforward
case on the law and we’re not going to have to break any
new legal ground, maybe we don’t have to put a lot of energy
in it and we can go with a smaller damages case. All three factors
kind of flow together.
Hynes:
We try to stick to the tenet “Don’t take the case unless
you’re willing to try it.” I think that has all sorts
of connotations.
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“We
have a karma approach to case selection, which means if
we do good to others, good will come back to us.”
Jay
Urban,
Urban Taylor & Stawski, Ltd.
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Client
baggage is the number one reason that I will turn down a case.
I think a case with good facts and a bad client spins worse than
a case with bad facts and a good client. I think that’s true
with respect to settlement negotiations, as well as the way administrative
agencies view cases and the way courts and juries view cases.
I
think particularly for young lawyers the objective should be to
overcome that tendency to want to take on anything that walks
in the door just so you have something to do and in the hopes
of obtaining recoveries and paying the bills. I would advise young
lawyers in particular to avoid that temptation. I think that it’s
better to starve earlier in your career and build a good reputation
than to take anything that comes through the door.
Domnitz:
I look for balance in cases that I’m evaluating. I would
separate here for purposes of this conversation medical malpractice
cases from all other types of civil cases. With regard to all
other types of civil cases, I’m looking for a balance between
liability and damages.
I
think it’s a common error for plaintiff’s lawyers to
be lured by either rock-solid liability with very difficult or
nonexistent damages or, more often, to be lured by a case that
has enormous damage potential but really difficult or tenuous
liability situation. What you really need to look for is a sense
of balance between those two things in what I call general liability
cases.
That
having been said, I will bend my criteria somewhat for a case
with large damages, but difficult liability if I feel that there’s
a viable theory that’s available. ... But I don’t ever
want to be in a court of law where I’m trying a case and
I’m trying to make up what the damages are. The damages have
to be there in order for me to be willing to take a case.
With
regard to medical malpractice cases, what I’m looking for
very simply from the beginning is a reason not to handle the case.
The first time a reason comes up not to handle a case for medical
malpractice, I drop it. Under the best of circumstances, they
are so expensive and so time consuming and plaintiffs prevail
in such a small percentage of the cases. …
Barr:
It may sound a bit idealistic, I suppose. But I guess for me …..
it always boils down to, whether I can help this client. Do I
have a reasonable prospect of getting anything accomplished here?
That’s not the same question as, is it a great case? And
it’s not the same question as, if I take the case to trial,
will I win? The question is can we come out the other side for
this client better than the position that the client is in now?
The rule is not based on certainty, but is there a reasonable
prospect of that.
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“For
me ... it always boils down to, whether I can help this
client. Do I have a reasonable prospect of getting anything
accomplished here?”
Charles
Barr,
Croen & Barr, LLP.
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A
big part of that … would be is this a client we can work
with; is it somebody that’s coming in here with an agenda
and who’s going to start telling us what the case is and
how to handle it and not be flexible to our ideas or our advice
or receptive to our advice, or is it somebody who’s really
come to us for advice and guidance on how to deal with a legal
problem?
Centofanti:
Of course, you look at a file or potential case and ask if you
can win. Then you look at it and ask if it is worth enough money
to justify what you’ll be spending. I agree with everything
Ric said about medical malpractice cases. I do them. I often regret
it.
In
normal personal injury cases, another consideration after can
we win and is it worth enough to justify the work and the cash
outlay is — will we help the client?
There
are times when you may win and you may get paid — contingent-fee
lawyer’s fee comes off the top. But if you’re not going
to do something good for the client, I don’t think you should
take it.
An
obvious example is in some of the really small cases that come
in. Sometimes the adjusters made an offer to the client already.
When we look at the facts and talk to the client, we realize that,
although we could get them some more money, it isn’t all
that much more. Maybe we can give them a couple of negotiating
tips and they can go settle it themselves. ….
Another
area where it comes up a lot in my practice is in nursing home
cases. Many of the victims are on Medicaid or other types of state
or county aid, which means that there’s a very large state
lien, not your typical subrogation lien that’s linked to
the medical bills, but the fact that the people have no money
and have been essentially on assistance in order to survive.
Those
liens are there and have to be paid back if the client gets money.
So sometimes you may win, you may collect a very nice fee, and
all the money might go to the state.
I
think the families need to know that they may not recover any
money. Some of them, frankly, don’t care. They want the nursing
home to pay. They want to put nursing homes on their toes so that
what happened to mom or grandma doesn’t happen to someone
else. …
Domnitz:
The most difficult part of being a plaintiff’s med mal lawyer
is to talk to people on the phone who have a story to tell you
that you can tell, without even reviewing records, is one where
there’s likely to be liability on the part of a physician
or a nurse or somebody like that. But you can also tell from talking
that there just is no way that you’re going to be able to
do work that’s going to benefit this client.
There
may be a horrendous error made in a surgery that results in a
person staying in the hospital for a few months and then having
to have another surgery, and some enormous medical bills may pile
up. But in the end, the person’s really back where they would
have been had the first surgery been done correctly.
Well,
you have three months’ worth of pain and suffering, which
isn’t going to be worth a tremendous amount of money. If
the person’s bills have been paid by an ERISA carrier, where
they’re going to demand on being paid first dollar after
cost of collection … you have to make up your mind as a plaintiff’s
lawyer, am I going to do this work so an ERISA carrier is going
to recover their money but I’m not going to do any good for
the client.
In
terms of case evaluation, it’s often the plight of the plaintiff’s
lawyer that you listen to somebody tell you their story and you
realize halfway through the story that this is a situation where
there probably is liability, there probably is causation, but
this is just not a case where you’re ever going to be able
to put any money into somebody’s pocket.
Hynes:
This same sort of cost/benefit analysis certainly is a thread
that runs through the decision of a plaintiff’s employment
lawyer. Our tug is a little bit less on remedy because some of
our statutes will allow us to obtain attorney’s fees.
I
think it’s so important ... to screen and screen quickly
even if it means making the wrong decision and even if it means
sometimes turning away someone with a terrible story to tell.
… You’ll get egregious facts that can’t be proved.
I think it’s a matter of weighing trying to make a difference
and trying to help a client against economics, your own reputation
and what I call the misery factor.
If
you take on a bad case, it sticks to you like a bad tattoo. I
think it reflects on your reputation if you’re not careful,
so I try to avoid them.
What
I try to do is draw a distinction between consciously taking on
pro bono work or work that makes a difference and being forced
to as a matter of poor case selection.
Centofanti:
There’s a real interplay between all the factors. Leave
med mal out of it — if it’s a case that you’re
certainly going to win and the damages are fairly small, you might
still be willing to take it. But if the case is difficult to win,
then you have to balance the likelihood of winning and what the
fee may be in comparison to what you’ll be spending to pursue
it.
If
your chances of winning are only 30 percent and you’re going
to spend at least half of what you might possibly recover, that’s
probably not a good investment of the money. But if it’s
a certain winner, you may be willing to spend more. If you’re
going to take a great percentage of the recovery for costs because
of the expense of the case, the client has to know that in advance.
I’m
a huge proponent of putting things like that in writing. We’ve
discussed your case; you’re interested in pursuing it on
principle; unfortunately, you don’t have the money to hire
a lawyer on an hourly basis to pursue the case for principle;
so we’re going to be partners in this endeavor; but you are
aware that by the time you pay me and what we’re going to
spend to pursue the case, your likely return is rather low. That
way you don’t have somebody disgruntled at the end.
WLJ:
Kelly, you had mentioned it might be a bad idea to take a case
that you’re only 30 percent likely to win, and where you’ll
spend half of the money that you’re going to make on that
case. Is there some kind of a financial formula that you work
through in your head?
Centofanti:
I think a starting point — and it’s affected by many
factors — is that you probably don’t want to spend more
than 10 percent of the likely fee. So if you think the case is
worth $90,000 and the fee will be $30,000, you shouldn’t
spend $6,000 on the case. Now, that’s very loose. It can
vary a lot. But how much you should spend on the case given the
likely recovery goes down the less likely you are to recover at
all. If it’s a certain recovery, then you could spend a little
bit more.
But,
again, I think the client has to be involved in that process.
WLJ:
Any other thoughts looking at the financial aspects and whether
or not you use some type of formula?
Urban:
I think formulas are dangerous. If you’re going to make that
kind of commitment of your time and effort, it’s got to be
case by case. Sometimes there are ways you can get rid of a lien,
or a subrogation interest. That might factor into what you can
spend on a case. Costs are a big concern in the plaintiff practice.
But
anybody who’s ever told me a formula, if you ask them what
case they are handling next week, they’ll tell you they broke
all the rules. Sometimes the client wants you to break all the
rules. Like Kelly said, sometimes it’s not about the money
at all.
In
employment, more often than not, people are not after the money.
They want their job back, which is never going to happen. Then
they want the company to pay — not necessarily them.
There’s
a case now that I’m handling where I’ll be lucky to
get my costs back on it. But I changed a young man’s life
so that he’s going to be able to go through school. …
So I think it’s really tough when you start putting formulas
on money, because all of us would be better off just taking a
FunJet to Vegas where we’d probably do much better.
Domnitz:
I think costs are a trap. ... Plaintiff’s lawyers have to
understand that when the costs start to get away from you, what
you’re doing is you’re playing fast and loose with your
fee. I’ve had a rule for years that I don’t let a client
walk out of my office with less money than I take on a case. If
the fee and the costs exceed what the client’s net recovery
is on the file because of subrogated carriers who had to be paid
or whatever the reason is, I cut my fee to make sure that the
client walks out of there with at least as much money as we take.
I just think it’s unseemly for a lawyer to end up with more
money in his or her pocket than the client ends up with.
Centofanti:
That raises one other thing. Sometimes clients will come to me
and they have been seeing a different lawyer. And the lawyer has
said, well, if you will cover costs, if you’ll give me a
check for $15,000, then I’ll do the case. That’s something
that I think is a little — little dangerous.
As
a contingent-fee lawyer whose practice is to invest costs in cases
that they think are likely to win, if you don’t think the
case is worth you gambling your money, it’s probably not
worth that client’s money either. So they have to be given
very good informed consent and not think that they’re definitely
going to get that money back.
Domnitz:
I think what happens to people is that … from time to time
you find yourself in the situation where you’ve made a determination
during discovery, something’s come up that was unanticipated
or a defense witness has brought to light a view of the case that
quite frankly hadn’t occurred to you before. Or something
is unearthed in discovery about something in your client’s
past. And all of a sudden the lawyer realizes that it’s probably
not in the client’s best interest to move ahead with this
case.
You
can take a look at the rules of professional responsibility. They
say that, if a lawyer believes that it’s no longer in the
client’s best interest to move ahead with the case, the lawyer
has the right, to go to the court and ask for permission to withdraw
from the case.
One
option to that is that you can call the client and you can say,
here’s the fact that’s been developed; I don’t
think you’re going to make it over the hump on this case
anymore; and I want you to understand that I can’t go on
spending my firm’s money and my time because there’s
been a material change from the day that I signed up your case.
Then
I show them the rule and I say, if you and I can’t agree,
I want you to understand that I have the right to go to the court
and ask to be relieved of responsibility.
But
I’ll offer you an alternative. If the client has the financial
wherewithal to put up costs for the rest of the case, I’ll
say, I’ve gone this far with the case; if you want to finance
the rest of the case, I’ll keep moving forward. But I’m
done investing my money in this case because of this material
change in circumstances that’s occurred. I don’t think
that you can do that if you just kind of sour on a case.
Centofanti:
You could lay the groundwork for that in your retainer agreement
too.
Hynes:
That’s the way to deal with it when the unanticipated issue
comes up. Getting back to the focus of this discussion, the question
would be how do we not get to that point. How do we screen cases
out early?
I
know with my law firm that’s one area where we really do
put some money into good staff. ... We have actual intake sheets
with specific criteria, a checklist. There are boxes that staff
check off with respect to different bases for discrimination,
where has the case been before it’s arrived at our office.
For about every 25 of those I get, I will only consider maybe
three out of the pile and call them back. Then I’m lucky
if I get one case out of those three.
But
what I do know is at that point it’s been through a process
that makes sure that good cases are what lawyer time is used on,
not bad cases.
Silverman:
One thing that separates a nonprofit, a legal-services-funded
attorney firm from a personal injury firm is, as you mentioned,
resources. Our resources are coming from the grants and the Legal
Services Corporation, not from contingent fees. We’re looking
not for damages as our primary goal. That would be secondary to
obtaining a benefit or keeping the client in a program that provides
a benefit — for example, W-2 benefits, rent assistance, unemployment
compensation, keeping someone from being evicted.
But
our problem is that we are always facing a lack of resources.
So we have to look at how we can do the most with what we have.
An ongoing debate within a firm as well as between offices around
the country is what kind of case you should take given the lack
of resources. It was mentioned the problem in taking a case that
doesn’t have merit. Spending a lot of time on it means that
you are not helping someone else who you could help, but you’ve
run out of time in that day. You’ve been on the phone for
a couple of hours with someone whose case has no merit and there’s
no advice that you can think of even to help them on their way.
Click
here for Part II.
Tony
Anderson can be reached by email.
