More on Trial Lawyers, Inc.

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Let me preface my remarks with the classic innocence by association trope, “some of my best friends are,” applied in this instance, to trial lawyers.

My previous post discussed a recent op-ed by Todd Zywicki on the impact of litigation on company willingness to go public:

That post prompted me to go back into the archives to reminisce about what I’ve said about trial lawyers in the past. These posts appear as they did on my old blog.

May 23, 2020: Are trial lawyers the reason we can't have anything nice?

My friend Jim Copland has a great op-ed in today’s WSJ on how the trial lawyers killed off Johnson & Johnson baby powder using a combination of junk science and litigation hotspots with gullible anti-business jurors.

In other developed countries, regulators would apply the best science and essentially end the matter. But not in the U.S., where claims that a product causes an injury are typically matters of state law. An FDA determination that a product is safe doesn’t usually preclude litigation alleging otherwise. ...

Asbestos lawyers have Johnson & Johnson as their latest deep-pocketed corporate defendant. And a necessary one too, as other lawsuits bankrupted all the actual asbestos manufacturers long ago.

October 18, 2014: Is being a trial lawyer the measure of a law professor's competence?

You will perhaps recall Judge Richard Kopf. If not, start here. The Judge recently got crosswise (again) with friend of the blog Rick Hasen who is a good guy and a major scholarly figure despite starting out with two strikes (he’s a liberal and he teaches at Irvine).¹ That spat presumably motivated Judge Kopf to post the following request:

I am interested in collecting a list of law professors who litigate in the trial courts of this country while also teaching law. I don’t care whether such litigation is civil or criminal in nature. I don’t care whether the litigation takes place in state or federal court. I understand and appreciate that busy law professors only have so much time. As a result, I don’t expect the list to contain law professors who are constantly in our trial courtrooms. But, I do want to know about law professors who try enough cases on a fairly regular basis that one might conclude that they are presently competent to sit at the first chair representing a client before a jury or a trial judge. ...

Please, please, please, no snark. I honestly have no interest in picking a fight. On the contrary, I am sincerely hoping to recognize and praise law professors who litigate in the many trial courtrooms of our nation while also regularly teaching law.

Without intending to be snarky in any way, I wonder why Judge Kopf is singling out trial lawyer law professors. Are law professors who regularly take the lead in writing briefs and conducting oral arguments in appellate cases not equally worthy of recognition and praise?

More important, are trial lawyers (law professors or not) worthy of recognition and praise? I’m quite serious about that question. Consider the Manhattan Institute’s path breaking report Trial Lawyers Inc., which exposed the considerable damage being done to our economy by excessive and abusive litigation:

Trial Lawyers, Inc., while not an annual report per se, presents a snapshot of the lawsuit industry as it exists today. The picture is not pretty. Total tort costs today exceed $200 billion annually, or more than 2% of America’s gross domestic product‚Äîa significantly higher percentage than in any other developed nation. Moreover, even as the economy has stagnated and the stock market has plunged, the lawsuit industry’s revenues have continued to skyrocket: in 2001, the last year for which data are available, U.S. tort costs grew by 14.3%. Over the last 30 years, tort costs grew at a compound annual rate of 9.1%; by comparison, the U.S. population grew 1.1% annually, the consumer price index grew 5.0% annually, and the gross domestic product grew 7.6% annually during the same period.

In my home field of corporate law and securities regulation, runaway shareholder litigation has become an enormous impediment to capital formation, as I argued in my article, Corporate Governance and U.S. Capital Market Competitiveness.

Whether or not you agree with me that runaway litigation has reached crisis proportions and therefore calls into serious question any effort to praise trial lawyers, moreover, surely you can agree with me that law schools already devote too much attention to litigation. As I argued in my essay, Reflections on Twenty Years of Law Teaching:

[Law school as taught by] the Socratic method doesn’t really teach you to “think like a lawyer.” At best, it teaches you to think like a litigator.

Consider a typical law student who accepts a [transactional] job at a large firm. She has spent perhaps ninety-five percent of her time in law school reading and discussing cases and law review articles. Once in practice, she will go days or weeks at a time without picking up a case or a law review article. Instead, her days will be filled with drafting, reviewing, and marking up transactional documents, negotiating language with opposing counsel, participating in conference calls, and composing memos, emails, and letters to colleagues and clients.

“Thinking like a lawyer,” as Kingsfield and his ilk would have our graduate do is not very conducive to success in that environment.

In his book, The Terrible Truth About Lawyers, Mark McCormack, founder of the International Management Group, a major sports and entertainment agency, wrote that “it’s the lawyers who: (1) gum up the works; (2) get people mad at each other; (3) make business procedures more expensive than they need to be; and now and then deep-six what had seemed like a perfectly workable arrangement.” McCormack further observed that, “when lawyers try to horn in on the business aspects of a deal, the practical result is usually confusion and wasted time.” He concluded: “the best way to deal with lawyers is not to deal with them at all.”

All of which is why I emphasize not only doctrine but also economics and business. Transactional lawyers must understand the business, financial, and economic aspects of deals so as to draft workable contracts and disclosure documents, conduct due diligence, or counsel clients on issues that require business savvy as well as knowing the law.

I want my students to understand that successful transactional lawyers build their practice by adding value to their clients’ transactions. Instead of thinking like Kingsfield, I want them to learn where the value in a given transaction comes from and how they might add even more value to the deal.

The problem with most law schools is that we have too many litigators and ex-litigators and not enough deal lawyers. So why would Judge Kopf want to contribute to that problem by giving trial lawyer law professors yet more recognition and praise? Why this bias against deal lawyers?

Finally, I suspect Judge Kopf’s many fans in the “law school is a scam” crowd will take issue with his list if they stop to think about its implications. Judge Kopf is “only interested in law professors who litigate while they also teach law. Exclude professors who were once trial lawyers but who no longer spend time in the trial courtroom.”

Of course, one of the main complaints by the law school scam crowd is that too many law professors spend too much time doing things other than teaching. Given how intensive trial work is, a law professor who is spending much time first chairing cases is a law professor who likely is not spending all that much time preparing for class, mentoring students, and so on.

In sum, without wanting to start a fight—just a discussion, I think Judge Kopf’s latest project doesn’t make much sense to me.

January 26, 2013: Theodore Dalrymple on the anti-smoking zealots and their trial lawyers

At Liberty Law Blog:

I am no friend to smoking, therefore; but even I feel a certain unease about the zealotry of the anti-smokers. The problem is that, in the modern world (though perhaps it was always so), a good cause is turned into rent-seeking, and generally into rent-finding as well.

Examination of the legal proceedings in the United States against the tobacco companies persuaded me that the real tort in the case was, in effect, the transfer of the profits of the tobacco companies from the shareholders to the trial lawyers. The last thing that anyone wanted to do was drive the milch-cow, the tobacco companies, into bankruptcy, or simply to close them down so that they could be sued no more. Governments, which had been deriving large revenues from the tobacco companies’ products for many years in spite of knowledge of the effects of smoking, were at least as responsible for any harm done by tobacco as the companies. No doubt the tobacco companies lied in a disgraceful fashion about the harmfulness of their products, but I have never met anyone who believed their lies; and although no longer young, I grew up knowing that smoking was bad for you in the same way that I knew that the world was round and the Battle of Hastings was in 1066. As to the supposed impossibility of giving up smoking once started because of the addictiveness of nicotine, this was clearly nonsense; what millions of people (including my mother) have done cannot be impossible.

And where there are rents to be found, lawyers will be there to take our cut.

February 20, 2012: Go buy the latest issue of The Economist

The most recent issue of The Economist has extensive treatment of the way regulation is strangling the American economy. A briefing paper gives extended treatment of how Dodd-Frank continues to grow through regulatory actions fleshing out vague Congressional mandates, for example.

My major quibble is that the various articles lay the blame at the feet of Congress and regulators. The role courts play in gumming up the works gets only brief mention in an article on nuclear power. Any realistic assessment of how the US is over regulated would have to take into account the role of activist judges and so-called “public interest” litigants using environmental and other statutes to throttle growth.

The role of the trial lawyers as so-called private attorneys general also needs to be considered when assessing the impact of law and regulation on the economy. As the Trial Lawyers Inc. project demonstrated, tort suits (and lawsuits in related fields like securities regulation) devour at least 2% of GDP per year. It found that “Over the last 30 years, tort costs grew at a compound annual rate of 9.1%; by comparison, the U.S. population grew 1.1% annually, the consumer price index grew 5.0% annually, and the gross domestic product grew 7.6% annually during the same period.”

Anyway, you need to read this compelling critique.

July 1, 2010: Trial Lawyers and the BP Oil Spill

The WSJ reported today that:

Plaintiffs’ attorneys are scrambling to avoid being frozen out by a $20 billion fund aimed at compensating Gulf of Mexico oil-spill victims outside of court.

The attorneys had hoped litigation against BP PLC and other companies involved in the spill would net them tens or even hundreds of millions of dollars in fees. Many quickly turned their attention to the spill in April from what was then the mass tort of the moment, suits against Toyota Motor Corp. tied to unintended acceleration.

But the legal landscape shifted dramatically earlier this month when BP agreed to create a $20 billion escrow fund to pay individuals and businesses suffering losses from the spill.

Administrator Kenneth Feinberg has said the fund would pay claims far more quickly than lawsuits, which could take years in court. He also pointed out that claimants could avoid costly attorneys’ fees by filing claims without a lawyer’s help. Claimants who receive payouts from the fund would have to waive their right to sue BP.

Predictably, this has annoyed the plaintiffs’ lawyers who were counting on making zillions off this calamity. In the plaintiffs’ bar’s world, at least 40% of that $20 billion should have been diverted into lawyer’s bank accounts instead of paying claims to people who were injured. After all, they’ve got yacht and Gulfstream payments to make. Plus, they’ve got to funnel zillions of campaign contributions to Democrats who will pass new laws creating new liabilities for lawyers to use to bring ever more lawsuits.

Think I'm exaggerating? The Journal article concludes:

As prospects of an oil-spill jackpot for the plaintiffs bar became less clear, some attorneys ... were already looking elsewhere for potential targets. Several clustered around a newspaper article describing how two new studies had shown a diabetes pill was tied to heart attacks.

I rest my case.

1. Rick is now my valued colleague at UCLA, which eliminates one strike.