4 ms·

As a former lawyer, one thing that really gets me worked up is how absurdly expensive it is to hire a lawyer (and for litigation in particular). A company shou

As a former lawyer, one thing that really gets me worked up is how absurdly expensive it is to hire a lawyer (and for litigation in particular). A company should never need to shut down because it can’t afford to defend itself. If this happens, it means our governing framework has seriously failed somewhere, and we should focus on fixing it. Not really a vote-winner, but that’s no excuse.

DarthGhandi 6y ago
> Not really a vote-winner, but that’s no excuse. Completely agree and the most preposterous part is that across the Western world elected officials are by far comprised of former legal professionals and those with law degrees. Feigning ignorance is not an option.
deleted 6y ago
[deleted]
vlovich123 6y ago
Is the situation unique to America or generally true across societies and legal frameworks?
- nmfisher 6y ago
  I have zero familiarity with practice in the USA, so someone else is probably better placed to comment. That being said, I suspect the absence of "loser-pays-costs" does make things worse in the USA. This mitigates most of the potential downside to litigation, capping your exposure to a known (controllable) quantity. But even then, it's still a huge problem in Commonwealth countries. I'm more interested to know if it's less of an issue in civil law jurisdictions like Germany.
  - pc86 6y ago
    The US is something like 65 separate legal jurisdictions - many of them do have "loser-pays-costs" for certain types of litigation, however this suit is likely in a federal court where no such law exists.
    - vlovich123 6y ago
      The thing is that the company has litigation insurance. So actually the lawsuit will still be fought and the company will stay alive doing so. The problem is that they can’t raise another round to fund operations because they can’t find investors while the lawsuit is ongoing. As others have noted loser-pays doesn’t provide any protection. The problem is that lawyers write the rules for the system they operate in (either directly as legislators or indirectly through fundraising, influence, and lobbyists). Regardless of the outcome of a case the lawyers arguing it are fine. I wonder what would happen if you suddenly made the lawyers somehow financially vested in civil suits too and strengthen scenarios where lawyers become financially liable (ie bad faith arguments, shenanigans by lawyers that might be de facto legal but are judged to be bad faith, etc).
- deleted 6y ago
  [deleted]
nradov 6y ago
And yet there are more lawyers than ever, to the extent that average incomes have declined (at least outside the top tier law firms).
molyss 6y ago
As a non lawyer, what really gets me annoyed is the fact that lawyers never seemed to be punished for bringing totally frivolous claims. Rarely do the plaintiffs, but I don't think the lawyers ever do. I think that would push said lawyers to make sure they have the full info before they actually take a case to court, and in tern reduce the number of frivolous litigation and the cost on the public system. I have personally been sued frivolously. After 6 months of stress during which the plaintiff decided to fire a lawyer and started to harass my attorney and expect them to spend time explaining the law (time for which I eventually was billed), we decided to settle. The plaintiff was supposed to pay me $6000, but decided to reduce that amount to roughly half. I just didn't have any energy to go to small claims court arguing that she still owed me the rest of it. Had their initial lawyer been on the hook for a frivolous lawsuit, the whole thing would probably have never happened. Rather than getting all of the info, they were more than happy to only get one side of the story (truncated email threads, not preparing them to answer to a discovery packet and so on) and to get their money, only to find a way to bailed once they realized it was not going to be worth it. Another thing that I found absurd is the fact that "reasonable attorney fee" doesn't seem to cover more than half the reasonable fees. My lawyer suggested filing motions to compel and/or motions for sanctions, but also warned me that it would cost me more than what the judge would award me for the fees. And of course, nothing for my time...
- prepend 6y ago
  Not a lawyer, but is there a way to try to institute more stringent legal ethics at the bar level? It seems unethical for an individual lawyer to bring spurious lawsuits as a matter of practice. If my elderly grandfather goes to a doctor and says “here’s $100k please chop of my leg because I want to” the doctor won’t do that. If they did they may lose their license. Seems like similar issues would exist for a company saying “here’s $1M please file lawsuits to block a company’s funding rounds.” While it’s legally allowed, it seems like professional ethics should prevent it. Of course it’s really hard to show what’s spurious.
  - cobbzilla 6y ago
    > Not a lawyer, but is there a way to try to institute more stringent legal ethics at the bar level? Sure, the same way you get the teachers union to help fire bad teachers or the police union to punish bad apple officers. Which is to say: not gonna happen.
lucozade 6y ago
I agree with you but that wasn't the issue here. According to the blog post they are insured to cover the litigation cost and will continue to pursue it. The problem is that they need more funding t operate and no-one will touch them with the litigation hanging over them. So the issue isn't so much the cost of litigating. It's the potential cost of losing.
i_haz_rabies 6y ago
I have a half-baked idea where if you want to spend over a certain, very low threshhold on lawyers, you have to also give the amount over the threshhold to your opponent. This way, there is no imbalance when a huge entity sues or otherwise entangles a small entity.
- alasdair_ 6y ago
  It's not a bad idea but it would be hard to prove. For example, if a lawyer works on contingency, how much should be paid? Additionally, the firm will likely farm out more of the work on to paralegals, private investigators, forensic accountants etc. to get around the cap wherever possible.
  - i_haz_rabies 6y ago
    Yeah, probably the worst type of profession to attempt to regulate in this way. It's just ridiculous to me that the justice system is pay to play. Seems to contradict the stated purpose of the system by definition.

DarthGhandi 6y ago

> Not really a vote-winner, but that’s no excuse. Completely agree and the most preposterous part is that across the Western world elected officials are by far comprised of former legal professionals and those with law degrees. Feigning ignorance is not an option.

deleted 6y ago

[deleted]

vlovich123 6y ago

Is the situation unique to America or generally true across societies and legal frameworks?

nmfisher 6y ago
I have zero familiarity with practice in the USA, so someone else is probably better placed to comment. That being said, I suspect the absence of "loser-pays-costs" does make things worse in the USA. This mitigates most of the potential downside to litigation, capping your exposure to a known (controllable) quantity. But even then, it's still a huge problem in Commonwealth countries. I'm more interested to know if it's less of an issue in civil law jurisdictions like Germany.
- pc86 6y ago
  The US is something like 65 separate legal jurisdictions - many of them do have "loser-pays-costs" for certain types of litigation, however this suit is likely in a federal court where no such law exists.
  - vlovich123 6y ago
    The thing is that the company has litigation insurance. So actually the lawsuit will still be fought and the company will stay alive doing so. The problem is that they can’t raise another round to fund operations because they can’t find investors while the lawsuit is ongoing. As others have noted loser-pays doesn’t provide any protection. The problem is that lawyers write the rules for the system they operate in (either directly as legislators or indirectly through fundraising, influence, and lobbyists). Regardless of the outcome of a case the lawyers arguing it are fine. I wonder what would happen if you suddenly made the lawyers somehow financially vested in civil suits too and strengthen scenarios where lawyers become financially liable (ie bad faith arguments, shenanigans by lawyers that might be de facto legal but are judged to be bad faith, etc).
deleted 6y ago
[deleted]

nradov 6y ago

And yet there are more lawyers than ever, to the extent that average incomes have declined (at least outside the top tier law firms).

molyss 6y ago

As a non lawyer, what really gets me annoyed is the fact that lawyers never seemed to be punished for bringing totally frivolous claims. Rarely do the plaintiffs, but I don't think the lawyers ever do. I think that would push said lawyers to make sure they have the full info before they actually take a case to court, and in tern reduce the number of frivolous litigation and the cost on the public system. I have personally been sued frivolously. After 6 months of stress during which the plaintiff decided to fire a lawyer and started to harass my attorney and expect them to spend time explaining the law (time for which I eventually was billed), we decided to settle. The plaintiff was supposed to pay me $6000, but decided to reduce that amount to roughly half. I just didn't have any energy to go to small claims court arguing that she still owed me the rest of it. Had their initial lawyer been on the hook for a frivolous lawsuit, the whole thing would probably have never happened. Rather than getting all of the info, they were more than happy to only get one side of the story (truncated email threads, not preparing them to answer to a discovery packet and so on) and to get their money, only to find a way to bailed once they realized it was not going to be worth it. Another thing that I found absurd is the fact that "reasonable attorney fee" doesn't seem to cover more than half the reasonable fees. My lawyer suggested filing motions to compel and/or motions for sanctions, but also warned me that it would cost me more than what the judge would award me for the fees. And of course, nothing for my time...

prepend 6y ago
Not a lawyer, but is there a way to try to institute more stringent legal ethics at the bar level? It seems unethical for an individual lawyer to bring spurious lawsuits as a matter of practice. If my elderly grandfather goes to a doctor and says “here’s $100k please chop of my leg because I want to” the doctor won’t do that. If they did they may lose their license. Seems like similar issues would exist for a company saying “here’s $1M please file lawsuits to block a company’s funding rounds.” While it’s legally allowed, it seems like professional ethics should prevent it. Of course it’s really hard to show what’s spurious.
- cobbzilla 6y ago
  > Not a lawyer, but is there a way to try to institute more stringent legal ethics at the bar level? Sure, the same way you get the teachers union to help fire bad teachers or the police union to punish bad apple officers. Which is to say: not gonna happen.

lucozade 6y ago

I agree with you but that wasn't the issue here. According to the blog post they are insured to cover the litigation cost and will continue to pursue it. The problem is that they need more funding t operate and no-one will touch them with the litigation hanging over them. So the issue isn't so much the cost of litigating. It's the potential cost of losing.

i_haz_rabies 6y ago

I have a half-baked idea where if you want to spend over a certain, very low threshhold on lawyers, you have to also give the amount over the threshhold to your opponent. This way, there is no imbalance when a huge entity sues or otherwise entangles a small entity.

alasdair_ 6y ago
It's not a bad idea but it would be hard to prove. For example, if a lawyer works on contingency, how much should be paid? Additionally, the firm will likely farm out more of the work on to paralegals, private investigators, forensic accountants etc. to get around the cap wherever possible.
- i_haz_rabies 6y ago
  Yeah, probably the worst type of profession to attempt to regulate in this way. It's just ridiculous to me that the justice system is pay to play. Seems to contradict the stated purpose of the system by definition.