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Most days, I am proud to be a lawyer (which is a good thing, since I’ve devoted my professional life to teaching law students — hopefully preparing them to be decent, capable, ethical practitioners). Sometimes, however, the legal profession can be downright embarrassing. No, I’m not talking about the ubiquitous lawyer jokes, or the so-called malpractice crisis, or even the constant questions about defending “the guilty.” I can handle all of that with good humor, and I can usually explain why most of the criticisms are either misguided or just plain wrong. But there are no good answers to widespread complaints about pocket-stuffing lawyers who seemingly try to wring every possible dollar out of their own clients. Being lawyers, of course, they know exactly how to do it legally — and that makes it all the more troubling. With that generality in mind, today’s story is about a woman named Mary Corcoran and her encounter with the legal system. It begins in tragedy and ends in frustration. SHE CALLED A LAWYER On Oct. 11, 1998, Mary’s husband, Michael, was struck and killed by a railroad train while working on the Union Pacific track bed in Chicago. Shortly after the accident, Mary was contacted by a representative of the railroad, who wanted her to settle out of court. Negotiating on her own behalf, Mary eventually obtained an offer of slightly more than $1.4 million, at which point she decided to see if an attorney could do better for her. That surely seemed like a sensible decision at the time, although it would end up backfiring badly. A friend of Corcoran’s introduced her to a lawyer named Joseph Dowd, a solo practitioner in suburban Des Plaines, Ill., who lists his practice areas as bankruptcy, divorce, and real estate. Dowd spoke to Corcoran about the accident and told her that she needed a personal injury lawyer. She replied that she was interested in retaining Corboy & Demetrio (one of the top personal injury firms in Chicago) because her father knew Philip Corboy from high school. So Dowd arranged a meeting with Thomas Demetrio, and Corcoran eventually signed a contingent fee contract. She agreed to pay the firm “25 percent of any sum recovered from settlement or judgment,” and also consented to a referral fee for Dowd in the amount of “40 percent of the attorneys’ fees.” Referral fees are permissible in Illinois, under certain circumstances, because they encourage attorneys who may lack certain expertise to send complex cases to specialists, rather than attempt to handle them alone. This referral, however, did not work out as planned. After nearly two years of litigation, the Corboy & Demetrio lawyers came to the conclusion that they could not improve on Union Pacific’s offer — so they recommended that Mary accept the $1.4 million, which had been held open by the railroad. Because they hadn’t increased the offer, Corboy & Demetrio voluntarily waived any fee. Not so Joe Dowd. He demanded payment of the referral fee — $140,000 — even though the litigation firm had waived its fee. By his own admission, Dowd was not an experienced personal injury lawyer, and he had not actively participated in the litigation on Mary Corcoran’s behalf. Nonetheless, he insisted that a contract is a contract. Corboy & Demetrio was free to waive its fee, but he was (as he testified at his deposition) a “small-town, small-time lawyer just trying to make a living,” and he wanted his 140 grand. Like most states, Illinois has adopted a version of the Model Rules of Professional Conduct, including provisions that cover attorney fees. Referral fee agreements have to be in writing, signed by the client, and all attorney fees must be “reasonable.” Among the factors listed for determining reasonableness are “the time and labor required” of the lawyer and “the amount involved and the results obtained.” Most people, including most lawyers, might suppose that $140,000 is an unreasonable amount for attending several meetings, reading a file, and making some phone calls — which pretty much describes Joe Dowd’s work. Incredibly, however, the judge agreed with Dowd. The fee agreement would be enforced as written, end of discussion. Mary Corcoran appealed, represented by a Chicago lawyer named Christopher Hurley. Once again, the judicial system disappointed her. The appellate court ruled that Dowd had a contractual right to payment, even though neither he nor Corboy & Demetrio had obtained an increase in the railroad’s offer. If Mary wanted an “improvement” clause, the court held, she should have asked for one. Never mind that she was depending on the lawyers to draft the contract and protect her interests. Still, the Illinois Supreme Court refused to hear the case this year, so Dowd got his money. HOW MUCH IS TOO MUCH? This whole sad affair might be dismissed as an aberrant decision by misguided courts, but it is actually more serious than that. With only a few exceptions, no court system has done a good job at policing attorney fees, especially on behalf of unsophisticated clients. In fact, Mary Corcoran was lucky that she found a lawyer to defend her against Dowd’s fee petition. Most clients in her position would probably have simply acquiesced, out of either ignorance or powerlessness. Even more fundamentally, the courts and the bar ought to take a closer look at the concept of contingent fees. Although they are prohibited in most other countries, contingent fees are permitted in the United States on the rationale that they provide for broad access to the courts. The lawyers involved stand to make huge profits, but that is justified on the theory that they run the risk of nonrecovery. In other words, you would think that a proper contingent fee would have to be, well, contingent on accomplishing something. Alas, you would be wrong — not just in Illinois, but everywhere. According to professor Lester Brickman of the Benjamin N. Cardozo School of Law, no state prohibits lawyers from attaching contingent fees to a client’s pre-existing offer. A client can actually lose money, therefore, if she consults a lawyer to determine whether she has a reasonable offer in hand — which is more or less what happened to Mary Corcoran. A simple adjustment in the Rules of Professional Conduct could solve that problem by providing that lawyers may only collect contingent fees on the basis of some tangible benefit achieved for the client — let’s call it the “earned recovery.” A few states are currently considering rules along these lines, but the organized bar opposes the change, so don’t hold your breath. States should also consider capping referral fees at, say, 5 percent of the “earned recovery,” with perhaps an absolute limit of $100,000 as well. That would provide plenty of compensation for the referring lawyer. A standardized fee would also eliminate the possibility of bidding wars for lucrative cases. Florida already imposes a percentage restriction on referral fees that would have saved Mary Corcoran more than $60,000. THE DECENT THING TO DO Most of the lawyers in her case acted admirably. Corboy & Demetrio did not even ask for a fee, once the lawyers realized that they could not improve on the original offer. (Disclosure: I know Tom Demetrio. He has lectured to my law school class a few times, though not in the last decade or so.) Chris Hurley, the appellate lawyer, covered all of Mary’s litigation expenses, although he ended up not getting paid. Even the railroad’s lawyer decently kept the $1.4 million offer open for more than two years. Only Joseph P. Dowd pursued self-enrichment, providing plenty of ammunition for lawyer-bashers, too many of whom already think that we’re all parasites. Dowd did not return my phone calls, so I cannot tell you his side of the story. But I do know that he recently renewed contact with Mary Corcoran — he sued her for additional interest on his fee. In an earlier day, churlish practitioners were shunned by their colleagues, excluded from professional gatherings even as they continued to practice law. Maybe guys like that are incapable of embarrassment, but a little peer pressure might go a long way. I know that I would cross the street to avoid a lawyer who selfishly exploited a vulnerable client. Shake hands? Not a chance. Sure, it’s impossible to say whether that would make any difference. But as an attorney, I know that the effort alone would make me feel better. Steven Lubet is a professor of law at Northwestern University. His forthcoming book, Murder in Tombstone: The Forgotten Trial of Wyatt Earp , will be published this fall by Yale University Press. Lubet can be reached at [email protected]. This article originally appeared in the August issue of The American Lawyer magazine.

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