How To Bribe Judges, Fix Prices,& Delay the Inevitable
Stern, Philip
How To Bribe Judges, Fix Prices,& Delay the Inevitable The American Bar meets the challenges of oUr times. by Philip Stern If it is true that lawyers predominantly serve the rich, they are not...
...There is an apparent duality, too, in the kinds of ethical questions that excite the Organized Bar...
...They, in exchange for their monopoly status, are obliged to serve the public convenience and necessity, including providing nondiscriminatory service to all comers...
...Asked how such an extraordinary fee could be justified, the attorney smiled and said, "Do you know what the interest on $1.3 billion is every day...
...If the price is right, you warm up to your client...
...3 billion or should be required to refund the overcharges to consumers, the court documents listed 30 separate attorneys for the various oil companies (and one participant says at one time they numbered more than \00) and just three lawyers (one for Consumers Union and two representing the U.S...
...He seemed almOst to chortle as he told his audience, "As you know, my [iaw] firm's meter was running alI the timeevery month for 14 years...
...On the contrary, it is a skill to be proud of, to boast of publiclyas Bromley did in a 1958 speech to a conference of judges wrestling with the (to them) vexatious problem of the "protracted case," the gigantic lawsuit that drags on for years...
...Three times as many, per capita, as England...
...If specialists could make a profit selling to lawyers for $160, why wouldn't they be delighted to sell directly to me and other members of the public for, say, $200...
...Would they form a corporation for me...
...But should they be the sale regulators...
...In that same 1958 speech he described, with even greater relish, his J 8 years of foot-dragging in a price-fixing case against the American gypsum industry...
...Furman had helped hundreds of customers without receiving a single complaint...
...It works very well for us...
...By any public official...
...an apparently flat rule...
...Even though the rule-writing power is privately held, the resulting rules typically become embodied in and have the force of state law, which gives lawyers the best of both worlds...
...An inadequate bill...
...Answer: He should not...
...As a young attorney, Bromley said, he "resolved to make a stupendous production" out of a government antimonopoly case against Paramount Pictures-and that is precisely what he proceeded to do, dragging the case out for 14 years...
...1980 by Philip Stern...
...No, none of the above...
...I would suggest that if your local bar gets along well, you get together and discuss it openly and frankly...
...Quite an arrangement: not only do lawyers have a monopoly on the rendering of legal services...
...We have an understanding among ourselves that these obvious [price] shoppers get nowhere...
...Would he then give the individual home buyers a price break on his fee...
...Gee, Fred, my partner Bob is one of the experts on exactly that problem...
...With this bill you won't be taken seriously...
...Four of those years resulted from Bromley's insistence that t\le court sit in each of 62 cities, io force the government to prove separately, in each city, the existence of the complaint of block-booking practice (requiring distributors desiring any Paramount picture to take all of Paramount's outP\lt, the flops as well as the smash hits...
...Supreme Court...
...delay any man's cause for lucre or malice"), Bromley proclaimed his realization, "in my early days at the bar, that 1 could take the simplest antitrust case...
...The manual recommended that the schedule be "presented in an attractive folder, preferably evidencing a degree of dignity and substance...
...Forming a corporation for a new business venture is not, of course, as commonly sought after as a divorce or a home purchase, but I had a particular reason for wanting to know how much lawyers would charge, in 1979, for that service...
...Hardly the most objective of judges...
...For example, the solicitation ban does not apply to contacts with a "close friend"just the sort of person one is likely to encounter on the cocktail-party circuit or at the country club...
...Barbara Thompson of Bethesda probated her husband's $140,000 estate with a couple of hours coaching from lawyerlegislator (and ardent probate reformer) David L. Scull...
...There is a long-standing rule that lawyers giving "unsolicited" advice to a layman "shall not" accept employment resulting from that advice...
...Or architects...
...But what does the public get in return...
...In a 1978 legal battle over the question of whether the major oil companies should be allowed to keep alleged overcharges amounti ng to $1...
...Markow, furnished an explanation: "We would not take any action to prosecute until the Bar asks us to...
...The admission was made in 1945, after th~ statute of limitations had expired, thus protecting Moore from prosecution...
...It fairly vibrates with connotations of illicitness, of a defiance of society's rules...
...Isn't he as qualified as he was before...
...Technically, you can as a layman represent yourself...
...A "black leather cover with gold lettering" was "more desirable" than a "plain, though neat, paper cover...
...Furman's] customers suffered any harm as a result of the services rendered...
...Finally, the Supreme Court said that was illegal...
...Instead, that burden was assumed by the state attorney general...
...If you have a complaint against your lawyer, you have only one place to turn: your local bar association, where it will be passed upon by your attorney's brethren in the profession...
...In America, people pay lawyers nearly $1 billion a year for probate-three times what they pay in funeral expenses...
...All rights reserved...
...from which this article is adapted...
...If lawyers decree that filling in the blanks on a standard, preprinted home purchase contract constitutes "the practice of law," then a real estate broker who performs that normally routine function is guilty of "the unauthorized practice of law" (UPL)-and the Bar enforces its monopoly by causing that broker to be charged with what, in many states, is a criminal offense...
...He insisted on this even though, as he later acknowledged, "there really wasn't any disupte a bout the facts a tall," and if ~he judge had asked, he would "have admitted readily" that his client was using the all-or-nothing booking scheme and the court could have moved swiftly to rule on its legality...
...UPL actions can be (and have been) brought against work-planning or probating a win, for example-performed by funfledged lawyers-say, a bank's salaried attorney for one of the bank's customers...
...In England, people handle the matter themselves, without lawyers, more cheaply and quickly than in America...
...The power to issue or withhold their licenses-and, more importantly, the power to write the rules lawyers must follow-is vested, for all practical purposes, not in publicly elected or appointed city or state officials, but in the lawyers' private trade organizations: the bar associations, national, state, and local...
...The Bar has fought ways of doing away with lawyers as expensive and needless middle.men-has fought, for example, the self-help probating of wills...
...And law schools continue to pour out new attorneys at an unprecedented rate...
...That attitude is vividly illustrated in the case of Hoyt Augustus Moore, whose name adorns the eminent Wall Street firm of Cravath, Swaine & Moore...
...Yet even today there is price fixing among lawyers-in the buying and selling of homes, for example...
...the unauthorized-practice lever also gives them, in effect, the power to define the boundaries of their own private turt: That power, it seemed, was intact at the end of the 1970s-the decade that had given the appearance of bringing such changes to the legal profession...
...Here and there in the United States, one catches hints of the savings that can be realized when probate is wrested from the grip of the lawyer...
...It was...
...Shall not...
...All rights reserved...
...At the time the UPL action was brought, Mrs...
...As in tennis, all white...
...Attorney Henry Morrow, one of those using a percentage rule to fix his fee for real-estate title searches, told a state hearing he saw nothing inappropriate in basing his fee on the purchase price rather than the work he did...
...The same method is often used in billing for the legal work involved in a home purchase-the fee rises with the purchase price, not the work...
...Emphasis added...
...Far fro!l1 reporting this solicitation of a bribe to the U.S...
...That was nb case of braggadocio...
...Answer: He should not, lest that promote "repeated use and indiscriminate distribution" of the cards...
...The usefulness of the country club as a client-getter is confirmed, according to Professor Monroe Freedman, by the fact that "lawyers have been known to take tax deductions" for club dues and fees as "ordinary and necessary business expenses," and by the instance of one "prominent Federal judge" who "resigned from several exclusive clubs upon going on the Bench, explaining to friends that he no longer needed to attr<'ct clients...
...Here are some that have: • Should an attorney be permitted to use blue paper, rather than white, for his business cards...
...by Philip Stern If it is true that lawyers predominantly serve the rich, they are not unique among professionals...
...The decision of the Florida Supreme Court holding Mrs...
...his client, he said, was "very prosperous...
...Judge Johnson got word to Moore through associates that in return for a paymeot of $250,000, he would withdraw hi$ objections and see to it that Bethleqem got its way...
...No one argues that lawyers, being familiar with the peculiarities of their own profession, should be entirely excluded from its regulation...
...Sometimes, lawyers even boast of their price-fixing practices...
...I decided, early in 1979, to test the waters, and find out what might confront an uninformed newcomer to the legal arena when he sought help with some commonly experienced problems: forming a corporation to start a small business, probating a wiU, or buying a home...
...No, they dealt only through lawyers...
...On the question of whether bar groups should take an active or passive role in matters disciplinary, the favored posture is that of the ostrich: unless a rule violation is the subject of a formal complaint, it is treated as if it simply does not exist...
...Utilities, however, are subject to public control, by a public utilities commission...
...that [Mrs...
...I called the U.S...
...By the Constitution...
...They'd make more money and I'd save money-classical free enterprise...
...The American Bar Association even advises its members on how to package a fee schedule: "A black leather cover with gold lettering is more desirable than a plain, though neat, paper cover...
...The company would draw up and file all the necessary documents (even including writing the minutes of the new corporation's board of directors...
...For example, after The Washington Post's 1972 disclosures that lawyers in the Washington area were paying kickbacks and other hidden fees to developers, lenders, real estate brokers, and builders in widespread violations of the legal profession's Canons of Ethics, none of the principal enforcers of the Canons-the bar associations in the Washington areatook any action...
...An attorney friend had told me it was common practice for lawyers to farm out the work to a specialty company, manned almost entirely by nonlawyers...
...Could that really be true in 1979...
...Emphasis added] Few lawyers, of course, would in public go as far as Weymouth Kirkland, a founding member of the large Chicago firm of Kirkland and Ellis, who is quoted by one of his partners as saying, "A good lawyer is like a gooq prostitute...
...Not much, especially compared with other state-sanctioned monopolies, such as public utilities...
...Speaking as if unaware of or unfazed by the oath all lawyers swear upon their admission to the bar ("I will never...
...No such obligation is laid upon lawyers, who may (and ordinarily do) freely turn aside clients they don't want, leaving (by their own admission) a large portion of the public lawyerless or inadequately served...
...The ironic result: not only were Virginians obliged to pay needlessly high title-insurance premiums...
...Virginia's assistant attorney general, G.J...
...Here is the expresident of the Idaho Bar Association, addressing his brethren at an open meeting of the American Bar Association in the mid-sixties: "We have eight lawyers in the entire county...
...from which this article is adapted...
...What is more Significant than the fact tha t 90 percent of la wyers serve ten percent of the people is that the legal profession has done its best to keep it that way...
...One oil company attorney startled his adversary by stating his firm was charging its client $350 an hour (nearly twice its normal charge) in this case...
...He described circumstances in which his task might be virtually nil (if, for example, he were to certify title to an entire housing development, in which case guaranteeing title to each lot on that tract would require no additional research...
...And yet no one was prosecuted...
...But their licenses are issued by the state, not by a trade association...
...The explanation: British procedures are vastly simpler, and do-it-yourself probate, without a lawyer, is the rule...
...So the fee for a $100,000 estate is automatically twice that for a $50,000 estate, even if the lawyer's task is identical...
...Then ask, unauthorized by whom...
...1980 by Philip Stern...
...He ruled that they did...
...It is hard to imagine an act that would be of greater concern to the Bar's disciplinary authorities...
...In the early 1930s, Moore was counsel to the Bethlehem Steel Company, whose desired takeover of a small (and bankrupt) fabricator of wire rope ran into opposition from federal Judge Albert W. Johnson...
...The lawyering power of major American corporations dwarfs that of even the United States government...
...For example, when the Virginia Bar Association instigated a legal action to prevent the Surety Title Company from selling title insurance directly to Virginia homeowners, and to require the company to sell through lawyers (at an added cost of nearly $500 on a $60,000 house), the bar association did not have to pay one cent to pursue the case...
...Philip Stern is the author of Lawyers on Trial, to be published this month hy Times Books...
...Fiorello LaGuardia, the colorful onetime mayor of New York City, once termed the probate court "the most expensive undertaking establishment in the world...
...Observe, too, that the offense lies in the unauthorized, rather than in the incompetent or inadequate, practice of law...
...By contrast, the budget of the U. S. Department of Justice, wqich is in charge of enforcing the anti-trust laws and other laws affecting business, totals onetenth as much...
...Indeed, as the Florida Supreme Court noted in its opinion in the case, the Bar itself did not even "contend...
...Then he added, "1 think 1 ought to confess that during the last part (of the 18 years) 1 stirred up a fight among the co-defendants just to keep the case going a little longer...
...The answer (assuming, conservatively, that the oil company can earn about ten percent on its money): more than $350,000...
...Electricians, for example...
...Bribing a federal judge is a felony as well as an effort to corrupt the administration of justice...
...The profession's failure to serve "the middle 70 percent" is not for lack of lawyers...
...Thompson paid Scull $150...
...To Bromley, the delaying game is precisely that-a game...
...By an act of Congress or of some other popularly elected legislature...
...The l4-year delay in the movie case was far from Bromley's crowning achievement...
...Once again he unashamedly told his audience that if he had been "called on the carpet" and asked to "admit" that the complainedof price-fixing agreements existed, "we would have done so," and the case "certainly would not have lasted 18 years...
...government) arguing for the consumer refund...
...They write their own rules-and then get the state to enforce them...
...But since the judge failed to foreshorten the proceeding, Bromley felt nb compunction about putting on a "road show production...
...They didn't want the local bar association initiating charges against them of unauthorized practice of law (in many states a crime punishable with a prison sentence...
...Twenty-one times as many as Japan...
...The spirit of largesse in the dispensing of generous probate fees finds vivid illustration in the experience of one Manhattan psychiatrist who, after testifying before a "sheriffs jury" (then part of the probate court) as to the mental competence of a very wealthy but senile gentleman, submitted a bill for three hours of his time, at his regular hourly rate...
...For example, in 1977 corporations spent $24 billion on legal services...
...Why not...
...A what...
...The answer is simple: they have a monopoly-a state-approved monopoly, like a public utility...
...The Organized Bar has deliberately kept the price of legal help up and has kept competition down...
...For decades, the bar deemed it unethical for a lawyer to charge less than the bar prescribed...
...One New Jersey bar association issued a rule saying that "competitive bidding" by lawyers wishing to do work for the school board was "disapproved...
...That's not unique: many other trades and professions require licenses...
...Yet for 14 years after Moore's open admission of that crime, * the Grievance Committee of the New York City Bar Association did nothing and Jioyt August1,lS Moore continued his highly prosperous practice of the law until his death, in 1959, at the age of 88...
...What sets them apart is that they exclusively control access to an entire branch of government: the judicial branch...
...the lawyer would pay the company $160-and then turn around and charge the client several hundred dollars, without doing a lick of work himself...
...When it comes to legal delaying maneuvers, one of the kings (in all likelihood the self-proclaimed king) is Bruce Brom~ey, Esq1,lire, a partner at Cravath, Swaine & Moore-and consider, as you contemplate his behavior illld remember Hoyt Moore's, that it has long been one of Wall Street's largest and most respected firms...
...A typical example is the UPL action brought in 1978 by the Florida Bar Association against Rosemary Furman, a former legal secretary, who was charging just fifty dollars-about one-tenth the going rate among Florida lawyers-to help divorce-seeking Floridians fill out the necessary forms and conduct themselves appropriately at the abbreviated courthouse proceedings...
...The attorney general of Virginia was asked whether certain of these kickback practices violated state law...
...But in most contests against an experienced lawyer, only the foolhardy would try...
...Pause for a moment and examine the phrase, "unauthorized practice of law...
...The American Bar Association's Lawyers' Practice Manual adroitly suggested that client dissatisfaction could be avoided and the fee schedules made palatable with proper packaging...
...No one can engage in the practice of law without a license-the license, in this case, consisting of admission to the bar...
...But the next words are "except that"and there follow neatly worded escape hatches through which lawyers for the well-endowed maneuver effortlessly...
...That piqued my curiosity...
...Perhaps more important than the legal profession's capacity to curb competition within its own ranks is its power to stifle outside competition...
...UPL is simply that which the American Bar Association or, more often, a state or local bar group asserts to be "the practice of law," and therefore "unauthorized" if performed by a non-lawyer...
...The lawyers' bill came to more than three quarters of a billion dollars-and, projecting that 1972 figure forward in time, the figure by now must be well over the billion-dollar mark...
...Ordinarily the legal fee for such an estate would have been about $7,000...
...and protract it for the defense almost to infinity...
...Fbr, as a practical matter, when you have a legal problem, you can't get through the courtroom door without a lawyer...
...On the contrary, this country alone has two thirds of all the lawyers on earth...
...He saved a client of ours a million dollars last year just on that point alone...
...How do lawyers get away with it...
...Probate fees are further inflated by the use of the "percentage" method of calculating fees, in which the lawyer's charges vary, not with the work he performs, but with the size of the estate...
...l see no reason why the second, third, or fourth [purchasers] should get the benefit of my services free when that information is exclusively in my possession...
...Not on your life, Morrow responded...
...That the legal profession is a stateapproved monopoly-with the state both adopting and enforcing its rules-is clearly advantageous for lawyers...
...Not one to be in the least ashamed of...
...Corporation Company, a leader in the field...
...You are supposed to be a distinguished expert...
...All but one of the lawyers I talked to quoted between $300 and $450 for a job they could get done for $160...
...they also had to foot the bill for being forced to do so...
...Shortly thereafter the psychiatrist received a check for three times the amount he had asked for...
...But that did not prevent the Florida Bar from bringing criminal charges against her...
...Lawyers are different...
...But to him that was of little moment...
...It writes its own rules and enforces (or fails to enforce) them as it sees fit...
...More surprising, these probate expenses are as much as 100 times what they are in England, according to probate expert William F. Fratcher...
...Should an attorney be permitted to print a calendar on the back of his business card...
...But the unique advantages of the legal profession don't end there...
...He was on target...
...Not so the legal profession, which in essence is answerable to no one...
...So when the American Bar Association makes the remarkable admission that it "has long been aware that the middle 70 percent of the population is not being reached or served adequately by the [legal] profession," it is acknowledging that nearly three quarters of the American people lack full access to the system of justice...
...The lawyers' ethic may have been more nearly captured by the hiring partner of a major WaIl Street law firm who, in extolling the challenge and excitement of a major lawsuit tb an idealistic young applicant, brought his presentation to a climax with: "And the great&st thrill is to win when you're wrong...
...Attorney, Moore, who considered the amount "not excessive and not objectionable to him," saw to it that the payments were made-an acl he later openly admitted to a ~ommittee of the U. s. House of Representatives...
...Emphasis added...
...In Maryland, even without a specially simplified probate law, Mrs...
...Philip Stern is the author of Lawyers on Trial, to be published this month hy Times Books...
...In this case, there was a second disciplinary avenue...
...Is it right, for example, that any complaint you may have against your attorney will be weighed solely by his fellow lawyers...
...Furman in contempt of court and ordering her to cease her divorce service has been appealed to the U.S...
...And probate here typically takes 17 times longer...
...The last time the Internal Revenue Service provided solid figures, Americans paid two-and-a-half to three times as much to lawyers for probating wills as they paid to the funeral industry for burying the dead...
...To a nonlawyer, this is most puzzling: it is quite acceptable for, say, Lawyer X, as a member of a law firm, to write or probate a will, but let X move to the employ of the bank and undertake the identical tasks and he suddenly becomes guilty of unauthorized practice...
...He promptly received a call from the old gentleman's attorney: "This is an inadequate bill...
Vol. 12 • June 1980 • No. 4
