by Elaine McArdle
This article remains on this site because it is good advice. This article has been reprinted with the permission of Lawyers Weekly USA, of October, 2003, the national newspaper for small law firms. To subscribe, visit www.lawyersweeklyusa.com
Every lawyer has faced this situation: The other side has placed a good offer on the table, but your client refuses to take it.
What to do?
Under legal ethics rules – ABA Model Rule 1.2 (a) – it is ultimately the client’s decision whether to settle a case or head to trial. But the lawyer has a duty to ensure the client makes a fully informed decision. And, in truth, clients look to lawyers to guide them and to make a recommendation.
“I don’t think you can take a hands-off approach and say, ‘Whatever the client wants, we’ll do,'” said Leo Boyle, a Boston trial attorney and former president of ATLA. “It’s incumbent upon you to lay out what juries are doing, what the statistics are, what the time line is for getting to trial, and what the time line of the appellate process is.”
If you’ve educated the client fully about the risks of trial and the benefits of settlement, then you’ve done your job, Boyle said. After that, “If the client says, ‘It’s important for me to get at the truth and expose it in court,’ then so be it.”
So – how do you educate a client on the value of accepting a settlement?
Start Early
It’s important to tell clients in initial meetings how unpredictable and risky litigation can be. Many clients, convinced of the “rightness” of their position, are certain there’s no way they can lose. Unless the lawyer disabuses them of this notion early on, even the best settlement offer may fall on deaf ears.
When clients look at the plaques and framed newspaper articles on the office walls of Andrew C. Meyer Jr., they are certain he can land a record-winning verdict for them, too.
“I say, ‘Yeah, but those are the cases where there was no offer,'” said Meyer, a Boston attorney who concentrates in catastrophic cases of medical malpractice. “I tell them that 94 percent of med-mal trials are won by the defendants, so there are big risks of going to trial.”
From the outset, clients should be told that the astronomical verdicts they see on TV or read about in the newspaper are often anomalies that are reversed on appeal or significantly reduced. They should understand that litigation is a long process that takes a toll not just financially but emotionally. They should be kept abreast of the particular political climate: whether juries in the jurisdiction are more conservative than elsewhere, for example.
“Expectations at the outset frequently are unreasonable,” said Michael L. Roberts, a plaintiffs’ attorney in Gadsden, Ala. “They’re based on the publicity that attends large verdicts, and also what you might call propaganda from tort-reform advocates. It gives people the impression it’s very easy to go into a courthouse and get money, when in fact that’s not the case at all. You have to spend some time giving them information that counters the effect of this propaganda.”
That lack of perspective isn’t restricted to members of the general public.
When they become personal-injury plaintiffs, businesspeople – who’ve been heavily influenced by the tort-reform movement – often are the hardest to convince, Roberts said, “because they receive a less-than-evenhanded presentation of what the jury system really is. So the educational process can be more challenging when you have somebody with a pre-existing mindset.”
Give It Time
Many clients – including those in divorce, personal injury, and employment matters – tend to be highly emotional at the start of a case. They are so eager to tell their story in court that they can’t yet accept that they might do better to accept a good offer and forget about court. It may take months before they are willing to discuss the concept of settlement.
Bruce Dorner, a solo in Londonderry, N.H., allows his divorce clients a cooling-off period, after which the emotions often settle down and the reality of the high cost of legal fees of protracted litigation begins to take hold.
Once this begins to happen, the client is more able to listen openly to a detailed presentation of the relative risks and rewards of taking the case to trial.
Present the risks
The bottom line is that jury trials are always a gamble. And lawyers must help clients understand this fact.
“I tell clients that if you try the same case 10 times, you’ll only win five times. And those five wins will have different numbers,” Meyer said. “I talk about rolling the dice, and that we don’t know, nobody can know what will happen at trial until you do it. And the question is, what can they afford?”
For example, can a financially strapped family risk losing $500,000 in hopes of getting another $250,000?
Let them know it’s their decision
“If the client doesn’t want the deal, you don’t want to browbeat them, because you don’t want them to come back and blame you,” said Nancy Shilepsky, a plaintiffs’ employment litigator in Boston. “So at the end of the day, it has to be their decision, even if you think you know what right for them. You can advise them strongly. But you cannot make the decision for the client.”
Meyer, who has landed more than $95 million in verdicts and another $150 million in settlements, makes it clear that he loves to go to trial. He wants clients to know that when he recommends a settlement, it’s not because he’s afraid of the courtroom.
“I tell them I’d rather go to trial, but they’re the boss,” he said. “If they want me to try it, I will. If they want to settle, I’ll do that. But I have the obligation to give them the information so they make the choice. I’m empowering them, and letting them know it’s all up to them. But I also give them tools to make that decision. I tell them, ‘If this were my money, this is what I’d do.'”
Engender trust
It’s tricky to move from the role of advocate to the role of counselor. Many clients – upset about the injury that led to the lawsuit – want their day in court, no matter what the risks. They may become suspicious when their lawyer suggests that settlement might be a good idea. “They say, ‘You’re not worried about me, you’re worried about your money,'” said Bernard J. DiMuro, a litigator in Alexandria, Va.
Clark Brewster, a trial attorney in Tulsa, Okla., who’s won numerous multi-million-dollar verdicts, said it’s impossible to get clients to accept your advice unless you’ve earned their full confidence.
“Sometimes, when a case is so good, the defense will want to settle it quickly,” he said. “But the client hasn’t formed a bond yet with lawyer that’s needed for him to be deferential” to the advice to settle. Typically, that trust is formed after the client has spent enough time with the lawyer. “Most of the time, our clients have been to many, many depositions and we’ve had many, many office conferences, so that they really do feel they can rely on our advice.”
If clients are educated from the outset and kept informed of important developments throughout litigation so that they trust him, Meyer finds they rarely ignore his recommendations. “The client could have a leg fracture and get offered $1 million, and they’ll say to me, ‘Is that good?’ They only know what you tell them, because the client is uneducated in the value of a claim. So it’s important to have communication with them that’s open and trustworthy, because they haven’t got a clue,” he said.
Present settlement as a victory
It’s critically important to acknowledge the client’s feeling that no amount of money can restore what they’ve lost.
“You have to pay respect to the issue that brought them here in first place,” Meyer said. Otherwise, clients see settlement as some kind of concession or loss rather than a beneficial resolution to the case. “I let them know that it’s a win.”
Brewster explains to his clients the financial advantages of settlement. For many, a structured settlement paid out over time is more attractive than a lump-sum verdict. Also, any portion of a verdict designated as punitive is taxable, but damages for personal injury are not. As a result, a smaller settlement amount can actually result in the plaintiff receiving a greater net dollar figure.
With divorce clients, Dorner emphasizes the value of retaining control over the outcome.
“I tell my clients, ‘In a privately agreed settlement, we will write down all the words we’ve agreed to, and then you, the clients, sign it. But if we go to court, that process is reversed. We’ve given the judge a blank sheet of paper with your signatures on it, and whatever the judge writes down, we’ll have to live with. Now, which method would you rather use with your family and your ex-spouse?’ Do they want control or do they want to give it to judge?”
Dorner also warns clients that if they come away from the table feeling like they’ve scored a major victory, the inequity of the situation will probably come back to haunt them. This is especially true in situations involving children, where the parties will have an ongoing relationship.
“My view of a settlement is: When you get up from table grumbling that you gave up more than wanted, but at least it’s over, it’s probably a fair deal. Nobody should get up from table cheering for joy. Everybody should feel they gave up more than [they] wanted but at least it’s over,” he said.
Getting An Outside Perspective
Lawyers often find themselves performing a tightrope walk, struggling to maintain the delicate balance between being a zealous advocate and a counselor who provides sobering advice. When they see the case as having serious weak points and begin cautioning a reluctant client that settlement might be the prudent course of action, they run the risk of being seen as a traitor.
This is when it’s often helpful to provide the client with an outside perspective.
Mediation
“There are some deals the client should take. It just makes sense. And ADR is a really good tool” to help the client see that, said Shilepsky. A mediator gives client some objective measure of the offer.
“If you push too hard on a client, they may worry you’re not in their corner,” she said. “That’s the worst thing. It really undermines the relationship. Sometimes it’s better if they hear it from a third party than from you.”
Brewster often relies on experienced mediators to help his clients see the light.
“Many times they’re former judges, who can offer a perspective on the strengths and weaknesses of the case,” he said. “The lawyer has been their champion, saying, ‘Yes, we’re gonna get ’em, we’re gonna win!’ When the lawyer starts saying, ‘We have problems with the case,’ they don’t want to hear it. It’s best to let that come from a mediator, who can say, ‘I’ve listened to both sides, [and] I can tell you having been in courtroom for 20 years, you may lose this case.”
Focus groups
Donald Beskind, a plaintiffs’ personal injury attorney in Raleigh, N.C., uses focus groups to show how real jurors view the case.
“Sometimes we find the focus groups see the case as worth a lot more than we think, but that’s rare,” he said. “More often, the clients find the case isn’t worth as much as they think. It can also be useful when clients think a particular theory or witness – including themselves – are strong, but we have doubts about it. They often find that theory or witness isn’t as strong as they think.”
Beskind uses this method only in high-end cases, when trial is nearing and it’s advantageous to have focus group input anyway. Typically, he gives a full presentation of the case to a large enough group – say, 32 people – that later is divided into four deliberative groups. Costs range from $5,000 to $10,000.
“But if you end up going to trial, all that you learn from the focus groups is very helpful,” he said.
Watching the focus groups can also strengthen a client’s resolve to go to trial if they are in doubt, he noted.
“We don’t use focus groups to create an outcome, we use it for education. But it can result in an outcome, including the choice to go to trial,” he said. “It’s not a frequent problem that clients’ goals and expectations are different from ours, but when it happens, this is a reasonably scientific way of resolving that.”
Get a second opinion
In one instance, Boyle – with the permission of defense counsel – asked the judge to talk to a reluctant plaintiff.
“He just chatted with him, and talked about what he’d seen over many years on bench, what juries can do, and the surprises you can get from jury,” Boyle said. “He talked about the advantages of the certainty of settlement. He did it in very gentle way, not forceful, not trying to be an advocate, but just talking to him as a consumer of the legal system, a person who was in the civil justice system as a customer, if you will, and the judge wanted to make sure he made a good decision.”
On another occasion where he felt he wasn’t adequately communicating the risk of trial, Boyle asked a renowned plaintiffs’ lawyer from another firm to talk with his client. It gave the client confidence in Boyle’s recommendation.
Juries Are Always A Crapshoot
Boyle said it’s only in a handful of cases that his clients have been unwilling to follow his advice. Still, it happens to every lawyer.
And what makes dealing with these cases so difficult is the ever-present possibility that the client who refuses to settle a weak case, will beat the odds in court.
Meyer chuckled remembering one particularly obstinate client.
“We had one case, the guy was a methadone addict and he’d been in a car accident,” he recalled.
The defendant was a wealthy businessman.
“Our client thought he’d hit the lottery. I think they offered $100,000 – and his only complaint was headaches! And he was on methadone! But he wanted to try the case. We said to him, ‘Are you out of your mind? You have a dent in your car and headaches!’ But he demanded a trial.”
On the stand, the plaintiff admitted under cross-examination that he’d lied to the insurance company about the value of his car and had turned back the odometer.
“I got him out in the hall and said, ‘You’ve got to be crazy! You just admitted insurance fraud on the stand,'” Meyer said.
But it turned out his client had gambled well. The jury came back with a $300,000 verdict.
Meyer laughed at the memory. “I was stunned, I was stunned,” he said.