Monday, December 16, 2013

Should You Hire a Personal Injury Attorney?

Just about anything advertised on a billboard is a raw deal - and that includes lawyers.

If you drive down the Interstate, particularly through a city, you'll see billboards, sometimes dozens of them, advertising the services of personal injury attorneys.  In Florida, these are so commonplace as to be unnoticeable.

Many offer services, including towing your car, finding a repair place, lining you up with a doctor, and of course, suing the other fellow's insurance company.

Other billboards are almost "how to" instruction manuals on how to fake a slip-and-fall accident.   A large Billboard near Miami shows a prostrate victim on a linoleum floor in a grocery store, with a spilled quart of orange juice nearby.  The tag line is, "It's Not Your Fault!  Sue!  Call the Offices of...." 

Are personal injury attorneys a good deal?  How can they afford to advertise on a billboard - and on television and the radio?

The answer to the second question is easy.   Attorneys can make a lot of money on personal injury claims - enough to pay for billboard advertising and television advertising - as well as big ads in the yellow pages and of course, online.

Now, note that I said the attorneys make a lot of money.   The plaintiffs (that's you) might not make out very well.

Why is this?  Should you hire a personal injury attorney?   That depends on a number of factors.   But it is worthwhile to understand ahead of time, how this "industry" works, and what is really going on.

First off, even though the lawyers on the billboards have rolled up their sleeves to show their scrawny lawyer-muscles and claim to "fight for you!",  lawyers are really only fighting for themselves.  If they can get a lot of money from the insurance company or some defendant, they make a lot of money for themselves - often the majority of what is recovered.

Lawyers are not running a charity - no matter whether it says they "fight for the little guy" or whatever on their billboard.  If you are dumb enough to think that a personal injury attorney is like Captain America, standing up for the downtrodden, with no expectation of making money in the deal, you are pretty darn stupid - and deserve to have some lawyer take away all your cash.

Can you make a lot of money as a personal injury plaintiff?   Well, that is the deal, ain't it?   You see these billboards, and you get into a fender-bender, and you think, "Gee, maybe I'll win the litigation lottery!  After all, that lady who spilled a cup of coffee in her lap got $5 million from McDonald's!  A real car accident should be worth more than that!  Right?"

Well, not exactly. 

First of all, yes, there are situations where maybe a personal injury attorney is necessary.  If you are really injured - and by that, I don't mean you have a sore neck for a few days - and the insurance company is being a real dick about it, then maybe you need to see a real lawyer.   The best, however, are the least likely to advertise on a billboard.  If you are in a car wreck and in a Coma and burned with broken legs, yea, you might need a lawyer.

But for the rest of us?   The P.I. Attorneys who advertise on the billboards are playing into the greed that most people have.   And most people think, "Gee, why hasn't my ship come in?  Why can't I get something-for-nothing like everyone else in this world!  My bruised knee is worth a million bucks, easily!"

And of course, this is classic weak thinking, which is very prevalent in America.   Too many today want wealth without work, and are more than willing to game the system, if not resort to outright theft, to get a few dollars.

And exaggerating an injury from a car accident or a slip-and-fall in the grocery store is what?  Stealing?  You betcha.

So, yea, if you think this is a good way to "get ahead" in life, then go for it.  Just remember that the Wheel of Karma catches up with people, rather quickly.    Ever seen someone who files on of these P.I. suits who ends up happy?  Hell, no.  They never feel they got enough, and in most cases, they don't get much.  They do bitch and moan about it, all the time, and become the friend with the perpetual problem.

I have never, in my lifetime, met someone who "got rich" from a personal injury lawsuit.  I have never, in my lifetime, met anyone who was happy with the way their personal injury lawsuit turned out.  I have never, in my lifetime, met anyone who files these sorts of suits who was really a happy person.  Have you?

There are actually people who intentionally "take a fall" in  retail store or other venue - or intentionally get into car wrecks - for the sole purpose of creating a personal injury case.   In some cases, these folks actually work in cahoots with seedy attorneys.  But again, you never see folks like this make a lot of money at this game.   At most, they get a few thousand here and there - enough to keep their head above water.

No one gets rich at this game.   Well, no one except the lawyers.

How does the game work?   Well, most of these attorneys work on a contingency-fee basis.  If you don't win, they don't collect.   But these contingency-fees can vary from 30% of amount recovered, to 60% and more.   And most attorneys also deduct "expenses" from the judgment award or settlement.

What sort of expenses?  Doctors fees, for one.  That friendly doctor he sent you to, that is not covered under your insurance plan, costs a lot of dough.  And since he is testifying at a deposition and possibly at trial, he gets paid for that as well.

Expert witnesses are also hired, and charge $300 an hour or more to review the accident files or medical files, testify at depositions, and testify at trial.  These may be medical experts, traffic control experts, accident reconstruction experts, automotive experts (if a part is alleged to have failed or was defective), and so on.  They may hire an animator to reconstruct the accident in a computer animation.   None of this is cheap.

And by the way, when I say $300 an hour, that includes travel time, meals, sitting around, waiting, whatever.  It adds up very quickly, into the tens of thousands of dollars - per expert witness. 

And then there are copying fees, court fees, courier fees, Federal Express charges, and so on, and so on, and so on.   "Expenses" can add up, fairly fast, and sometimes be as much as the attorney's contingency fee.

So, say for example, you get into an accident and damage your car.   You are only mildly injured, and like in most car wrecks, you are sore all over.   The other fellow was clearly at fault, and admits as much.   You could just call his insurance company and talk to them.   Granted, they may try to deny fault.  They may try to encourage you to get the car repaired at a place of their choosing.  They may try to get you to settle for less than you'd like to.

But on the other hand, if you are firm with them, they likely will try to settle the case quickly - and pay for your car repairs, medical bills, and the like - and even offer compensation for "soft tissue damage" if you are bruised or the like.  You might even recover "depreciated value" if your car is worth less, as a result of the accident.   And this payment is immediate, so you can move on with your life.   And since an attorney isn't taking 1/3 to 2/3 of the money, well, you are fully compensated.  You are "made whole" as we say in the law.

Now, on the other hand, suppose your wreck was right under a billboard for "Howe, Dewey, Screwem, Personal Injury Attorneys" who promise to "Fight for you!".   So you call their 800-number and they send out a tow-truck and hustle you off to the hospital in an ambulance, even though you are little more than shook up and bruised a bit.

The other fellow's insurance company, once they are aware you have hired a lawyer, will refuse to talk to you.   And likely, they won't have much to say to your lawyer, either.   You'd better be prepared to wait - and wait a good long time - to be made whole in this situation, if ever.

Why is this?   Well, in order to recover sufficient damages just to pay for your car repairs and hospital bills (generated in part, thanks to an unnecessary ambulance ride), the P.I. Attorney has to allege "pain and suffering" in addition to actual damages (car repairs, medical bills, etc.).   They might also go after "lost wages" and even "loss of consortium" - meaning the loss to your wife because you can't have sex with you (which she may actually perceive as a benefit, but let's not go there).

Now, in most States, the insurance company is only liable for damages up to the limit of the policy.  So if the guy who hit you only has $25,000 in insurance, that's all you're going to collect, unless you or a family member has uninsured motorists coverage which P.I. Attorneys just love, as it sweetens the pot.

But even then, that might add only another $25,000 to the pile.    In the greater scheme of things, we are not talking about a lot of money.   If the insurance company agrees to pay out a "claims limit" amount, that might be all that is collected.   And after the attorney's fees and expenses, it is possible you may end up collecting less than you would have, just negotiating with the insurance company.   It is possible you may end up collecting less than the damages you incurred.

Of course, in some situations, it is possible to collect more.  For example, if your attorney sends a demand letter for the limits of the policy - and the insurance company refuses - then the attorney can sue for any amount - at least here in Georgia.   So if you are hit by a schmuck with a $25,000 policy, and the insurance company refuses a demand letter for the claims limit of $25,000, your attorney could sue for a million bucks.  But of course, that does not mean he might necessarily win.

Another scenario is where a big corporation or other "deep pocket" is the defendant in the suit.  Slip-and-fall cases are very popular, as the grocery store or other establishment where the slip allegedly occurred, has a lot of insurance, as well as lot of assets, bank accounts, and other easily attachable stuff.  Similarly, if you are hit by a truck belonging to a big nationwide trucking company, the sky is the limit!

The only thing you don't want to do, is be hit by some poor person with little or no insurance.   That's not how the game is played!

I am being facetious, of course.

So why do people hire P.I. Attorneys?  Well, there are cases where people are burned horribly or paralyzed or whatever.   And in those cases, the amount of damages can be huge.   And if the defendant is a "deep pocket" the person injured may recover millions of dollars.

Of course, getting a million dollars isn't better than being paralyzed or burned.   Ask anyone in a wheelchair what they would pay to get their legs back.  Ask anyone in a burn ward what they would pay to avoid the agonizing pain of the daily wound scrubbing.

No one comes out ahead in these deals.   Except the attorneys, of course!

And those big jury awards are advertised all over the place.  I get a newsletter from a P.I. Firm in Florida, trumpeting their big wins (but never mentioning their losses or smaller wins).  A million-dollar jury award makes the news - and is free advertising for P.I. Attorneys everywhere.

Advertising - and for what?   What they are selling is the idea that you can make a lot of money in a personal injury suit.   And it is just an idea and most times, a myth.

You see, the coffee lady at McDonald's didn't win $5 million dollars.  The jury awarded about $3 million dollars.  But the judge reduced that to less than a Million.  They ended up settling the case for less than $600,000.  And can you guess who got the lion's share of that?   Well, with trial expenses as well as the attorney's contingency fee, I doubt the lady got even half.  (Some sources claim the law firm waived their fee in that case, I have no source on that, however).
"A twelve-person jury reached its verdict on August 18, 1994. Applying the principles of comparative negligence, the jury found that McDonald's was 80% responsible for the incident and Liebeck was 20% at fault. Though there was a warning on the coffee cup, the jury decided that the warning was neither large enough nor sufficient. They awarded Liebeck US$200,000 in compensatory damages, which was then reduced by 20% to $160,000. In addition, they awarded her $2.7 million in punitive damages. The jurors apparently arrived at this figure from Morgan's suggestion to penalize McDonald's for one or two days' worth of coffee revenues, which were about $1.35 million per day. The judge reduced punitive damages to $480,000, three times the compensatory amount, for a total of $640,000. The decision was appealed by both McDonald's and Liebeck in December 1994, but the parties settled out of court for an undisclosed amount less than $600,000."
And her experience is not atypical.  Gigantic jury awards generate sensational headlines.  Amounts reduced by a judge or reduced on appeal (or reduced in confidential settlements) are not mentioned in the press.   So the P.I. Attorney has a friend in the media, in that they report the sensational verdicts, but play down the reduced amounts actually awarded.   And of course, no one talks about how much the attorney got out of the deal.  And no one talks about whether the amount awarded really compensated the victim for all their pain and suffering (how much is having your vagina douched with boiling water worth to you?  A million bucks really isn't enough, I suspect).

So those "Whale" cases serve a very useful purpose - they convince the plebes that they too, can win at litigation lottery - even when they really don't have much of a case.  But there are an army of lawyers out there who are willing to take their cases on contingency, even if they are pretty basic car accident cases with a limited amount of damages at stake.

If you Google "Unhappy with Personal Injury Suit" or "Unhappy with Personal Injury Settlement" and you will see pages and pages of complaints from plaintiffs who are unhappy with their attorneys - sometimes even before the case goes to trial!  After settlement, well, you are pretty much stuck.   Consider this plea on the Internet:
"My mother had a slip and fall accident at Wal-Mart a few years back and she hired an attorney. After 2 years they finally settled the case. She at that time wrote a letter to this attorney and also to the head of his office about how disappointed she had been with his work ethics. She only settled because she simply got tired and frustrated with his lack of skills. My question to you now, is it possible to reopen a case like this after it has once been settled."
First, you can see there is a real brain-trust at work here.   For some reason, this Cletus doesn't quite understand what the word "settlement" means.   Can I go back and sue again and again?  Why not?   You see the mentality at work here.  He was hoping to win "Litigation Lottery" and had his new bass boat all picked out.   When the case finally settled, he doesn't have enough to pay the cable bill.

And you can see here, who the P.I. Attorneys are targeting as clients - the lower classes.   The very poor believe in Litigation Lottery - even if it really isn't real.   They believe in real lotteries as well - and that you can "get rich quick" if you know the "secrets" to investing.   In short, you can sell the poor anything at all.   They will buy shit-on-a-stick if you pitch it right.   And the P.I. Attorney is an excellent example of that.

But the question is telling.  After two years of waiting, they got tired of waiting around and settled the case.  And I am sure the question of  "work ethics" has more to do with the utter lack of work the attorney did on the case, the pitiful amount they settled for, and the huge chunk of fees and expenses the attorney took from that pie, than any real "ethical" violation.

It is a complaint I hear often from plaintiffs.  "My Attorney isn't doing anything to move the case forward!" they cry, not understanding that due to court backlogs, cases like this (which take back seat to criminal cases and more important things!) often take years to get to trial.   In the meantime, there is discovery, depositions, motion practice, and a whole host of activities.   And since the contingency-fee attorney is paid on the amount won and not on the hours he puts into the case, it often means it is in his best interest to do as little as possible, throw together a half-assed case (which it likely was, from the get-go, anyway) and then settle on the eve of trial for a token amount.

From the attorney point of view, that makes the most economic sense.   If you can get ten cases going at once, and do little or no work on any of them, and settle for $50,000 before trial on each of them, it is more profitable than one case that you actually have to take to trial and win $500,000.  Far less effort for just as much money.  The economic incentive is there.

So you see how the game is played.  Advertise on billboards, get a lot of cases, shake down the insurance company for a token amount, keep half of that, give a pittance to the client.   If the case was bogus to begin with, the client is happy - better to collect something than nothing.   But, if you are actually injured, well, it may be a less than desirable outcome.

And that is a predictable outcome for most P.I. cases where the actual injuries are not that severe.  Unless you can show some debilitating injury requiring lifetime care (paralysis, etc.) you are not going to win a million bucks at trial.   And if you have such a case, for God's sake, don't use some sleazy attorney who advertises on billboards!

But if you are not really injured - or not seriously injured - consider whether you need a Personal Injury Attorney at all.   Is what the insurance company is offering adequate?  Or were you hoping to win Litigation Lottery?  If the latter, I have no sympathy.

UPDATE December 18, 2013:   I attended a law conference in Savannah, and the litigating attorneys who spoke there were quite illuminating.   One mentioned that some firms here spend over a million dollars a year on television and billboard advertising.  There are a million people in the greater Chatham County area - that works out to a buck per person.

I mentioned to the speaker, during the break, that was a lot of money to spend, and he said, "Yea, and they make their money all on these shitty $3000 cases!"

Right there, you see how much "Litigation Lottery" pays - little to nothing, half the time.

What was interesting is that they described how the system worked before Lawyer advertising went into effect.   Back then, a referring attorney would get as much as 50% of the litigating attorney's fees.  If you were a litigating attorney, most of your business was by referral - and as a result, you paid out a lot, in terms of fee-splitting with other Attorneys.

So a Billboard or TV ad is a great way for a law firm to cut out the middle-man and avoid paying referral fees.

For all those shitty little $3000 cases.......