The Deadman Night Rider

A forum for evening students of the SMU Dedman School of Law and other outlaws..

Wednesday, August 24, 2005

Interesting post on the economics of trial law...

I came across a post this morning written by a Tennessee trial lawyer giving advice on weighing the economic risks in taking on cases. Maybe it's the bean-counter in me, but I've been noticing alot about this in the story of a case we're reading for civil procedure. I guess trial attorneys function as 'gatekeepers' in a way, since they naturally screen for cases with a high likelihood of success and high enough potential damages to generate a return - and as this blawger points out, even if one of the factors is very high, it doesn't compensate for the other being too low. In theory, you would think this would lead to the 'best' cases getting heard: clear, convincing evidence of enough harm to be worth resolving in court. It'll be interesting to see if this bears out in practice or not.

Another thing I hadn't thought of was leverage. A good bit of the story we're using as background in class has to do with how the PI attorneys financed their preparations for trial. If they hadn't had access to capital, they couldn't have tried the case - so it really came down to a bank betting money against the resources of the guys being sued. The trial lawyer writing this post suggests calculating an hourly overhead figure (which is great advice for any business) - but one interesting thing he doesn't mention is that as a case moves toward trial and more and more money goes into it, that hourly cost will keep going up and up as a result of financing costs. It seems like that would mean a trial attorney has an increasing incentive to settle over time.


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