Virtual Law Firms in Price Discrimination Field

Virtual Law Firms in Price Discrimination Field

The legal profession is changing together with the rest of the economy. For many years, there has been a tendency for law firms to either grow or be disbanded. The reason generally seems to be that major clients (who themselves are growing) want all of their legal problems handled by a firm providing full services, so that the client does not have to manage their legal business but can entrust the management of their legal business to a major law firm which can do most of what the client needs.

For intermediate size law firms, the firms must either merge with other firms, so that both firms can grow (together) or suffer a loss of clients who take their business to a larger, full-service firm, causing the intermediate-size firm to ultimately go o ut of business.

The other tendency in the legal world is for law firms to reduce their expenses, including personnel, and become smaller, so that the firm becomes a virtual law firm. There is a fairly complete development of this topic of the virtual practice of law in LawMall, which you are invited to review.

The advantage of a virtual law firm in the RPA field is that by having a low overhead the virtual RPA law firm is able to provide its services on a contingent-fee basis to its clients, whereas the large law firms generally cannot and do not provide their services on a contingent-fee basis.

For those of you who are interested, here is some of the dynamics at work. In a major law firm, the cost of doing business each day is staggering, requiring huge amounts of legal fees to sustain. Non-partners have to be paid their huge salaries; secreta ries and paralegals and messengers and data processing personnel and librarians and others have to be paid their salaries, and the partners want their monthly or bi-weekly draws against profits. Any type of contingent-fee litigation stops the flow of mon ey and increases the costs for the firm, to hire replacement personnel to do the work now being done by persons working on a contingent-fee matter.

Thus, when given an opportunity to do a major case on a contingent-fee basis, there is little support by most of the partners, who want legal fees today instead of expectations of legal fees in several years. At partnership meetings, the conservative par tners generally prevail, and veto most suggestions of doing any type of contingent-fee work, except for pro bono work in which there is a possibility of a legal fee award at the end of the case. This pro bono work would probably be done even without the prospects of any legal fee award, so it probably does not count as an exception to the rule of NO CONTINGENT FEE CASES!

From the standpoint of a virtual law firm working on a contingent-fee basis, there is a different problem. When a lawyer's practice is mostly contingent-fee cases, it is difficult to take cases for pay, strange though this may seem to the reader.

The contingent-fee lawyer has all of his time needed to prosecute the inventory of contingent-fee cases, and any request by a cash-paying client to purchase some of these hours takes the lawyer away from what he knows best how to do, and puts him/her into a different type of business, one in which he/she has to keep track of the time spend (which the lawyer does do anyway when working on a contingent-fee basis), and then bill the client each month for each telephone call, each xerox copy, each messenger, each postage stamp, each federal or postal express, each use of Lexis or Westlaw, and each minute of secretarial or paralegal involvement in the matter.

For an attorney trying to get along with minimal help, the business of selling and billing for the small law firm's hours and services is too much, because the lawyer himself/herself probably has to do this, instead of a lower-valued employee, which depri ves the lawyer of even more time needed to successfully represent the contingent-fee cases.

Thus, there is a tendency for contingent-fee lawyers to reject hourly-rate cases or other matters, if they are offered to the lawyer, to enable the lawyer to concentrate on the higher-paying (but delayed) contingent-fee cases where the hourly rate could b e substantially higher than the rate the lawyer could charge for paying clients. If the lawyer could charge $250 per hour to paying clients, the contingent-fee lawyer could easily earn $1,000 or $2,000 per hour on his/her contingent-fee cases, or, to be truthful, nothing per hour for a few years, depending on many factors.

In any event, if you are looking for a lawyer to represent you in a Robinson-Patman Act price/service discrimination case, you probably will not find a medium or large law firm willing to represent you on a contingent-fee basis, and you probably could not afford to pay any law firm to represent you on an hourly-rate basis. Your choice probably will be among individual practitioners and very small law firms to take your case on a contingent-fee basis.

The question, of course, is how to find such a lawyer or law firm.

This question is discussed in another article in the RPAMall Menu, to which you can go directly Selecting an Attorney to Start an RPA Lawsuit.

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Copyright © 1997, 1999 by Carl E. Person