The MacNeil/Lehrer Report; Legal Profession

ROBERT MacNEIL: Good evening. For years foreigners have been amazed at how many lawyers this country has and how much Americans sue each other. Recently a lot of prominent American judges, lawyers and educators, have been saying the same thing, and warning that it's getting out of hand. They say the country is suffering from too many laws, too many lawsuits, too costly and complex a legal system that is draining too much talent away from more productive industry. Chief Justice Warren Burger complained last month that the nation was plagued with what he called virtually a mania on litigation as a way to solve all problems. In April, Derek Bok, the president of Harvard and former dean of its law school, said the American legal system was among the most expensive and least efficient in the world, and that one of its chief problems was lack of access for the poor and the middle class. As more authorities speak out we ask tonight, what is wrong with the American legal system? Jim?

JIM LEHRER: Robin, with the possible exception of rabbits, no group in America multiplies in number faster than lawyers. In 1960, according to the census bureau, there were 200,000 lawyers in the country. Now, a scant 23 years later, there are 612,000. That's a threefold growth and is fed by a steady input of some 35,000 new law school graduates a year. It makes the United States the most lawyered of nations on a per capita basis. There's a lawyer for every 390 of us Americans. That's three times the ratio in Great Britain, 20 times that in Japan. Harvard President Bok and others say we have way too many lawyers and that's a principal cause of our having too many lawsuits. The growth figures there do coincide. Just in civil suits filed in federal court the increase has been 3 1/2 times since 1960, double since 1974 alone. The increase in the caseload of the federal appeals courts has been sevenfold since 1960, and statistics for most other kinds of courts at all levels bear out the same kind of staggering growth. Derek bok is not alone in his concern about the growth of both lawyers and lawsuits. One of those who shares it is A.E. Dick Howard, professor of law at the University of Virginia law school. He's at work on a book on this very subject. Professor Howard, do you agree there are too many lawyers?

A.E. DICK HOWARD: Jim, I think there are pros and cons to the problem of America being over-lawyered. One is certainly struck by the increase in numbers and the diversion into the law of people who might be otherwise employed in more profitable areas such as engineering. The Japanese have a saying, for example, that engineers increase the size of the pie, and lawyers simply redivide the pie.

LEHRER: And I think you would agree with the Japanese?

Prof. HOWARD: And I think I would be on the side of the Japanese. But the reason I say there are pros and cons is that in worrying about the problem of too many lawyers, too much law, too much litigation, one should not escape the good things that have come about in the last 20 or 25 years -- the time we're talking about -- because of litigation. I think the civil rights movement of the 1950s and '60s was the catalyst for this use of law to solve social problems, and I think it is fair to say that in many ways American society is probably juster and fairer and a more equitable society in good part because of judicial intervention. So I think in examining the problem that we're looking at tonight of too many lawyers, I think one has to be concerned about not cutting back in such a way that one throws out the progress that we've made socially in the last two decades.

LEHRER: All right, that said, do you think there are too many lawyers?

Prof. HOWARD: I think there are. It seems to me --

LEHRER: Now, what caused this?

Prof. HOWARD: Well, I think the factors that have given rise to the number of lawyers are both institutional and social. The institutional factors, I think, lie above all in the increase in the 1960s in government regulation and the growth of the social apparatus generally -- creation of agencies such as EPA and OSHA, the spawning of countless pages of federal regulations. Also, the increasing willingness of courts -- as opposed to legislatures -- courts to intervene in the solution of social problems. We've seen a generation of judges who are increasingly able and willing to jump in and solve a problem at the default of one of the political branches. So I think partly we've seen a malaise or a sort of malfunction in the political system in which the states and Congress respectively, having failed to address problems, people have more and more turned to the courts for the solution of those problems. That obviously spawns lawyers to take those cases to court.

LEHRER: Now, you mentioned a moment ago the good that has come out of this. In a general way, what is the bad? What's the evil of this?

Prof. HOWARD: Well, one of the evils is simply diversion of resources. About 2% of GNP now goes to the law, and it's hard to think that that's much more than money changing hands. It doesn't increase productive capacity. It does make the law our great growth industry, but I'm not sure that's something we're in fact proud of. there's a problem also in the skewing of talent. The brightest of each generaltion that used to go to graduate studies in the sciences and the humanities is now winding up in law school. And i'm not sure that that's not a maldistribution.

LEHRER: Isn't that partly because it pays well?

Prof. HOWARD: Well, that's where the money is. Consider the hourly fees that lawyers charge in law firms, it seems to me that that's a kind of maldistribution.

LEHRER: Well, of course, you're from within the group, meaning law schools. Robin laid out at the beginning what Derek Bok and others have said, that the law schools are teaching these young lawyers that are coming out to be confrontational rather than to go the mediation route. Is that a legitimate complaint?

Prof. HOWARD: I think it's a fair indictment. I assume that I'm on the program tonight as part of the problem, one who teaches all these lawyers who are being spawned by the law faculties. There are several endemic problems to the way legal education is conducted in this country. One is a classroom concentration on the adversarial system. One studies appellate decisions of courts largely to the neglect of arbitration, mediation or other non-litigious ways of handling problems. That, it seems to me, is an issue. Secondly, law students are taught almost to be without value judgments. They're taught to sort of take any side of any case, and the result is you produce a breed of people who will simply hire themselves out where the money is.

LEHRER: Well, why don't you do it differently, Professor Howard?

Prof. HOWARD: Well, I would move in several directions if I were czar of legal education. I would, first, have much more emphasis in the first year of law school on alternatives to litigation; e.g., arbitration and mediation. I would also have more teaching of courses like jurisprudence and the social sciences so that law wasn't seen an somehow disembodied from the rest of humankind's undertakings.

LEHRER: Would you also ration the number of lawyers, of law students you accepted and graduated?

Prof. HOWARD: I think that's probably a misconceived solution to the problem. It'd be a lovely thing to do, but I'm afraid all that would do is simply result in a rather medieval kind of guild system.

LEHRER: Thank you. Robin?

MacNEIL: Now we have an educator who thinks law schools turn out the right kind of lawyers. He is Professor John Langbein of the University of Chicago law school and he joins us in Chicago. Professor Langbein, are law schools, first of all, to pick up on Professor Howard's point, teaching confrontation at the expensive of arbitration or mediation?

JOHN LANGBEIN: I would be reluctant to say that. I think that the curriculum that exists largely patterns -- follows the pattern of the real world of the law, and I think we have a responsibility to train lawyers who are familiar with what's out there in order that they can serve the needs of their clients when they get there. I'd be the first person to say that law schools ought to be doing a good deal more in addition to that, and indeed I think they do. I think they teach a good deal of comparative law, legal history and jurisprudence and things which are designed to give perspective and enrich curricula. But I think that the most important mission is to train lawyers to be able to serve the needs of the people who need them.

MacNEIL: Now, if they're training them for the real world that's out there, what is your opinion of the real world that's out there? Of the way the law is practiced out there?

Prof. LANGBEIN: Well, that is, as they say, a very large question. I think a good deal of the discontent with the litigation system is quite justified. I think that anybody who gets off the boat in this country from Western Europe or, to a lesser extent from, indeed, anywhere else in the world, is simply astounded at the inefficiency of it. I think there are a number of explanations for that having to do essentially with the excesses of the adversary system, and I think there are some solutions that one could begin to employ. I think to some extent there's a considerable consensus among academics at least about some of those solutions. For example, the most important is that ours is the only legal system in the civilized world that does not have a practice of charging the loser of a lawsuit with the litigation expenses of the winner, with the result that we make -- in effect we subsidize frivolous and long-shot type litigation. That is a rule which astonishes European lawyers. Well, I could run down and give you a list of 20 of those things -- of interstitial changes which collectively would make a real difference in the reform of the procedural system and, to a lesser extent, in the reform of the institutions that administer it. And if one were to go down that route, I think one could make a real dent in the problem.

MacNEIL: What are a couple of the things you would change, other than the procedure you just outlined?

Prof. LANGBEIN: Well, I think the other commonly understood flaw in modern American civil procedure is the lack of restraint in what is known as "discovery," the pre-trial investigatory stage of the procedure. And there are a number of ways of dealing with that, but I think the most important is to try to get earlier judicial involvement and a more active judicial involvement in order to shape issues to prevent a sort of aimless factfinding and discovery, and also to try to attach cost sanctions to parties who discover and who put the other side to litigation expenses that are really almost foreseeably unjustified.

MacNEIL: What is your opinion of the contingency fee system?

Prof. LANGBEIN: Well, I think it's a very bad substitute for a bunch of other institutions, the most important of which would be a cost-shifting rule. It's no accident that our contingent fee system is essentially unique to the United States. There are faint analogues here and there, but basically it's unique to the United Ststes.

MacNEIL: Would you just explain briefly the contingency fee system?

Prof. LANGBEIN: Yes, that's where the lawyer has a stake in the litigation and he becomes a co-venturer with his litigant, with his client, in seeking to obtain a successful outcome.

MacNEIL: Finally, do you agree with Professor Howard that the law is diverting too much talent into nonproductive activity?

Prof. LANGBEIN: I don't really think that's answerable. I think that it is sad to see so many of the very ablest students going into the law, but that's really a commentary not only on the law, which after all can be a kind of exciting career, but it's also a commentary on the decline in the prospects in so many other fields. Particularly in the leading law schools, there's been a strong tendency for people who are at heart really frustrated philosophers and social theorists and so forth to come in not only onto student bodies but also onto faculties really in response to the collapse of the academic market. We've had a depression of unprecedented proportions in the university world in many of our humanities and social science fields over the last decade. And I think that some of this is absolutely inevitable and is simply a response, once again, to these larger factors that are quite outside the legal system.

MacNEIL: Well, thank you. Jim?

LEHRER: There are pioneers at work in the area of keeping disputes out of courtrooms, and one of them is Jonathan Marks, a Washington lawyer who is the co-founder of a year-old firm known as Endispute. He is an honor graduate of Derek Bok's Harvard law school, a former assistant U.S. attorney here in Washington, and a member of a large Los Angeles law firm. The purpose of your firm, of Endispute, is what?

JONATHAN MARKS: Endispute is in the business of helping people cut the costs of handling and resolving disputes. We provide a private forum, a private alternative where a variety of parties -- an individual claimant and a plaintiff's attorney disputing with an insurance company; two major corporations in a dispute involving tens of millions of dollars -- can get assistance in choosing from among a wide variety of dispute-resolution alternatives which will help then reach a faster, less expensive, more appropriate resolution of that dispute than they would be likely to get if they followed the traditional process, which involves either lawyer-dominated negotiated efforts at settlement or all-out litigation.

LEHRER: All right, give me an example of how it works.

Mr. MARKS: A plaintiff's attorney in an insurance claims case arising out of an accident in Southern California may try to negotiate a settlement with an insurance company claims representative. The parties may not think that either one is totally unreasonable, but the demand of $100,000 in settlement may seem too high to the insurance company, and the offer of $20,000 by the insurance company may seem substantially too low. The option that the parties might have in the traditional system is to begin discovery, to begin exspending money, get in line -- as in Los Angeles County -- to wait five years to get that case to trial, and perhaps at the courthouse door or sometime earlier finally come to some kind of settlement. Instead of that, many plaintiffs' lawyers and insurance claims representatives and defense firms in Southern California come to Endispute and ask for a conference with one of the former judges who work with us. The former judge would sit with them for an afternoon, for three hours, listen to the --

LEHRER: This is all private, right?

Mr. MARKS: Absolutely private. Listen to both sides, presentation of their cases, in much the same way, in fact, that the parties might do it in an in-court settlement conference, which might be available two or three years down the line, after the delay, after the expense of discovery has been taken. The judge might help the parties to be more honest with each other about what their true settlement bottom line is. The judge might add his own or her own input about what the likely outcome in court is. And that kind of new information might help to break the deadlock of negotiation, which is at the heart of many of our problems. It may add a kind of solvent to the process to move it forward.

LEHRER: In some cases you even stage little unofficial mini-trials, correct?

Mr. MARKS: That's correct. In a large corporate dispute, for example, the problem that the parties may have is that they may have fundamentally different views about the likely success of theirlitigation in court -- views spawned by lawyers working for each side, rendering opinions absolutely in good faith after careful legal analysis. In a case we're now working on involving tens of millions of dollars, the parties were unable to reach a settlement because, in fact, lawyers on both sides after careful work really had views of likelihood of success that added up to 160% or 170%. How do you -- there's no chance of negotiating a settlement in that process until a lot of time has passed, and maybe the business people have paid out --

LEHRER: Millions of dollars.

Mr. MARKS: -- tens or hundreds of thousands of dollars in legal fees. What the parties in many disputes up to now have done, and in this particular dispute which we're now working on have done, is agree to allow the lawyers to argue the case to the business people, to say to -- to put the business people on one side of the table along with a private, a neutral adviser, usually a former judge -- in this case, a former federal judge. The lawyers will, in a two-day process, make an informal presentation of their best case to the businesspeople, and the very adversary process that is sometimes nonproductive will be used here to allow the lawyers on each side to challenge the premises of the other.

LEHRER: Okay. So, in summary, this saves money, correct? mr. MARKS: Yes, sir.

LEHRER: -- keeps things out of the courtroom, right?

Mr. MARKS: Yes, sir.

LEHRER: Is it something that you think could be the wave of the future or does it have limited appeal, limited application?

Mr. MARKS: Alternate dispute resolution generally is not a panacea. It's not the be-all and end-all of dispute resolution. It is clearly, however, a necessary additional tool in the bag of tricks of the business person, of the lawyer. The lawyer has to be good at negotiation; the lawyer has to be a good trial advocate, and I think the lawyer has to understand how to go beyond negotiation to use mediation, to use arbitration, to tailor processes like the mini-trial. And the problem with the profession in large part has been that lawyers have been extraordinarily uncreative in those areas. That's what we think we can help in doing.

LEHRER: Thank you. Robin?

MacNEIL: Not everyone agrees that negotiation out of court is the best solution. Harry Lipsig has been a trial lawyer for 57 years, and has been called the kingpin of negligence law. He is a founding partner of a New York City law firm. Mr. Lipsig, on the points we've just heard Mr. Marks make, what do you think of his approach?

HARRY LIPSIG: Surprisingly enough, much that he has said meets with my complete approval. While I am very much a litigator and am the head of a law firm that's accustomed to going to court and to litigate things, the dream of every lawyer, certainly on the plaintiff's side by and large in litigation is that the matter will be settled. Now, I for one have advocated members of the bench -- that the idea of having a supplementary force similar on a supplementary supply of judges or lawyers to sit and do just what has been said by the speaker before me. I completely approve of it. The trouble with one part of it, where you present it before businessmen, is whether or not it will work efficiently. I wholeheartedly approve of conferences before ex-judges. I feel that there are many of them whose expertise in handling problems and in adjusting cases -- because here in New York the trend is towards adjusting cases in the courts, and great effort is being made by the judges accordingly. So there is much to what he has to say of which I approve.

MacNEIL: But?

Mr. LIPSIG: Well, there is no "but" really. The trouble with it is, especially the second half, to whether or not -- how much of the views of the businessmen from the sides that they come from might or might not affect the situation. The composition of the body of businessmen would well decide whether or not ultimately it would work out justly. But I certainly approve of anything that cuts down the time of people in the courts and certainly of the courts themselves.

MacNEIL: Well, if people like you, who as you say are a professional litigator and have been for a long time, approve of this kind of thing, why doesn't more of it happen and why are there so many complaints about too much litigation, too much expense, too much complexity?

Mr. LIPSIG: There will always be complaint. It's in the nature of things and in the nature of man and in the nature of anything that we do in this democratic country. I for one am of the view that the greater trend towards litigation is an indication of greater civilization. It is a trend away from the caveman; it is a trend away from "might is right" as the knights in King Arthur's court used to have it where the stronger knight would prevail rather than justice would prevail, and it's a trend away from the Winchester and the six-gun -- the six-shot gun of the West.

MacNEIL; Well, if you think it's a trend towards civilization, what's your response to the points we quoted earlier by Derek Bok, the president of Harvard, the system is too costly and too complex for most people and excludes all but the rich?

Mr. LIPSIG: That is absolutely a baseless remark, "it excludes all but the rich." Because there's one phase of the practice of the law that has apparently been overlooked. For example, one of the most important phases of the courts' activities, where people have been mangled, have been mauled, have been tortured, have been killed in the course of life due to somedody's carelessness, the poorest man in the community can get the same top-flight lawyer as you or the richest man in the community because of the contingency fee. And anybody that attacks the contingency fee because of the lawyers' share in the fee is blind to all of the manifold benefits that flow from that system.

MacNEIL: Because they give people without the funds to pay for good lawyers access to the system, you mean?

Mr. LIPSIG: And they do more than that. The top-flight lawyers with the genius that lawyers in that field today have evidenced all over the United States in fighting the millions of dollars that industry is able to throw in the battle in a case -- you take giants like General Motors, where they have lawyers and experts of every kind to battle the claim of some poor devil who may have had his leg cut off, as we had in our office where we had the battle, and Fortunately was successful in so doing. We matched them, and the contingency fee makes it possible to match them, and we can lose as much as $130,000 in a case -- and I gambled the disbursements of $130,000 in an airplane crash, and the contingency fee makes up for it in those cases where we are successful and permits of us to sue for the tragedy written in the case where we may be unsuccessful.

MacNEIL: All right, thank you. Jim?

LEHRER: Professor Howard, what's your view of the contingency fee, its evil or goodness?

Prof. HOWARD: Well, it certainly, as has been pointed out earlier, a unique experiment in this country.

LEHRER: Does it work?

Prof HOWARD: Well, it certainly turns out to be a very expensive way of litigating because one of the problems with the contingency fee is that the lawyer and his client become, in effect, stakeholders in the same enterprise, and it seems to me that it therefore encourages cases being brought forward and pushed to large judgments because obviously, the larger the judgment the larger the recovery. Therefore the larger the lawyers' compensation. It seems to me that's a built-in defect.

LEHRER: Professor Langbein, based on what you said earlier, I think you would agree with Professor Howard on that, right? It's a built-in defect into the system?

Prof. LANGBEIN: I think on balance it's a pretty unsavory device. I don't mean to say that it doesn't have some virtues at the margin, but I think all other legal systems have found other ways to deal with the few problems that the contingent fee addresses -- namely, that they have cost-shifting so that the winner will recover his expenses for cases that he wins, and on the other hand, the main device is, in riskier cases, you have some form of legal assistance. There's widespread combination of solutions in all other civilized legal systems except our own, and of course the lawyers are the losers. That is to say that these lawyer princes that we have with their astonishing recoveries -- 33 1/3%, 40% of fees, of recoveries that are meant to be compensatory, that run into the hundreds of thousands of dollars, are unheard of in these countries.

LEHRER: Well, take that, lawyer prince Lipsig.

Mr. LIPSIG: Why, it's a pleasure to take it. Would they deprive the man and the men that represent the downtrodden, the ones that don't have the monies to come into court, of the funds that make it possible for the outstanding men in this phase of the profession to battle the millions of the defense that is available to the giants of corporations that we have to fight. I say it is -- and I'm going to be sharp about it -- that it's shameful to call a proceeding that makes it possible for the poverty-stricken to be able to come into court and fight these giants and to label it with the word "unsavory" when it provides the funds to take care of these people -- funds that wouldn't otherwise be available to them. And if the lawyer gambles, as he does, years on the case, and gets a proper fee for it that makes it possible for him to open his doors to everybody that needs him, then I say he's entitled to every penny that helps the cause of justice for those that couldn't get it otherwise.

LEHRER: Thank you. Mr. Marks, you're the most recent graduate of all four of you tonight of law schools. What's your general view about the fact of so many young men and women going into the legal professiona, and why, and what can be done about, and the whole problem of too many lawyers? And you've got 20 seconds.

Mr. MARKS: One of the most interesting things is the number of lawyers who contact us and say they'd like to do something other than traditional litigation, and one of the answers to that, on the other hand, is the only reason we can do what we do is because we're also litigators. We understand the system and therefore what kind of alternatives there are. I think there are new opportunities for lawyers in mediation, in arbitration, in management of conflict that are going to be --

LEHRER: Much less money. There's less money in mediation than there is in litigation, right?

Mr. MARKS: That's right.

LEHRER: Okay, thank you. We've got to go. Robin?

MacNEIL: Yeah, I'd like to go on with this, but we just can't. Professor Langbein in Chicago, thank you very much for joining us; Professor Howard and Mr. Marks in Washington; Mr. Lipsig in New York, thank you. Good night, Jim.

LEHRER: Good night, robin.

MacNEIL: That's all for tonight. We will be back tomorrow night. I'm Robert MacNeil. Good night.