All Clients Will Shop On Price if That is the Only Distinguishing Factor

I’m not here to spread doom and gloom about the legal job market, but these articles keep catching my eye. The latest if from the , where Paul Caron reported on a service he described as the eBay for lawyers, with the terrible name Shpoonkle. The Shpoonkle service allows clients to post their legal problems, and member attorneys bid on the work.

The site was started by a law student concerned about his $140,000 in student loans and the poor job market. Apparently his concerns are well founded. Caron cites the Association for Legal Career Professionals, which reports that only 64% of law graduates in 2010 had full-time jobs that required a J.D.

What I found interesting was the very negative response to the service from another blogger, Scott Greenfield.  He suggests that “[a]ny lawyer who signs up for this service should be immediately disbarred, then tarred and feathered, then publicly humiliated.”

Why so?  Although Shpoonkle might make the process a little more structured, this bidding war among attorneys has been going on since advertising was legalized. Mill practices like simple Chapter 7 bankruptcies, uncontested divorces and traffic ticket defenses have competed on price for decades, and that is as it should be. Any system that discourages competition and forces an artificially inflated price should be rejected. Providing affordable legal services is something we should all strive for.

Even more sophisticated matters are being shopped around by clients. Recently a prospective client called to say he was retaining me after consulting with seven other attorneys. He confided that I was on the high end of prices he had been quoted, but that he had been impressed by my even-tempered approach, while all the other attorneys had wanted to go to war. But that’s really just another way of saying that he thought I’d be less expensive in the long run.

The takeaway here is to know that clients will always shop on price if that is the only distinction among attorneys, and it is your job to make it about something else. When a client balks at my proposed fee agreement because two other attorneys quoted lower hourly rates and deposits, I explain that is a false savings if those attorneys take twice as many hours to perform the work. If I know they are going to continue shopping or are considering another attorney, I provide them with a verbal shopping list.

“I’d be happy to represent you, but please go with the attorney who gives you the greatest comfort level. Let me give you a couple of things to look for. Most attorneys will probably tell you that you can’t recover your attorney fees in this type of case. I have found two techniques that make it possible, although certainly do not guarantee, that you will recover your attorney fees. Be sure to ask whichever attorney you choose if they have a means to try to recover your fees, and if they don’t, have him or her give me a call so I can walk them through the process. Also, it’s always the hope that a case can be resolved without the time and expense of going to trial, but you want someone who is comfortable in a courtroom in case that becomes necessary. I’ve taken more than a dozen of these cases to trial. There is a real trick to getting the proper jury instruction on the elements, so be sure your attorney has gone thorough the process a few times.”

This speech is completely honest and provides a great service. I have successfully obtained attorney fees for my clients using a method that is so cutting edge that it is not in any reported decision. The second technique simply involves the use of Requests for Admissions, which many attorneys don’t understand provides for the award of attorney fees or simply never use them properly to set up such an award at the conclusion of the case. It does concern me that the client may be penny wise and pound foolish and go with another attorney who won’t know or apply these techniques to get the client their attorney fees. A client could nonetheless hire  the less expensive attorney and take me up on my offer to educate him, but that has never happened. Understandably this generous offer to educate their attorney leaves the client thinking, “why would I hire an attorney who has to call another attorney to figure out how to handle my case?”

Back to Shpoonkle. It should not be assumed that an attorney who competes on price and bids for work is anything other than a fine attorney.  (Don’t most attorneys representing insurers bid for the work, agreeing to take a greatly reduced hourly fee?)  He or she may just be new and looking for some experience, and/or feel good about providing services to those who fall between the cracks; too much money for Legal Aid and too little money for most attorneys. I don’t know any attorney who does not provide pro bono service, voluntarily or otherwise, but it is unreasonable to assume that it is enough to cover all people in need.

[Update:] Sadly, the world apparently wasn’t ready for Shpoonkle, and it closed its (virtual(?)) doors.

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