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Is there a practice or custom of demanding reduced legal fees for poor performance?

Background example: Our company was sued for alleged patent infringement. We provided a detailed explanation to our lawyers and plaintiff for why the patent in question was extremely narrow and the infringement allegations were baseless. The plaintiff persisted, and our lawyers constantly tried to persuade us to settle with the plaintiff (under terms that were not favorable to us). After a year of litigation the lawsuit ended with an in-person meeting with plaintiffs and one of our lawyers. We had other agents present who helped explain that if the plaintiffs were to lose in court they would lose their claimed patent rights, whereas if we were to lose we would lose an insignificant amount of our income. The lawsuit was concluded by a dismissal without prejudice.

We feel that our lawyer did not vigorously and competently represent our interests and claims, and also that as a result of their incompetence and inattention the dispute was far more protracted than necessary.

Is there a common basis for demanding a discount in the lawyer's bills for these complaints?

  • Can you clarify your point about their "disproportionate" bills? Do you mean that they overbilled, as in fraudulently represented that they spent more time than they did? Or just that you think that it shouldn't have taken them as long to do the tasks for which they billed as they claim it did? – feetwet Jul 29 '15 at 15:14
  • I don't think the spent time is significantly misrepresented. In general distrust in our exhaustive arguments (plaintiffs arguments were superficial, our were detailed and technical) and conformism led to longer litigation and expensive bill. – john Jul 29 '15 at 15:37
  • My mom fired her first divorce lawyer for not listening to her, but in her case the practice wanted to spread it out in litigation and not settle. Let me ask you, all-in, was the settlement offer truly "not favorable" or would it have been a certain, fixed cost outcome where you'd have to swallow some pride? Given the time and money to get where you are, was the settlement around the same order of magnitude, or truly more expensive? – user662852 Jul 30 '15 at 12:52
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In general you can dispute and negotiate any bill from a professional. The stronger your arguments for disputing it, and the more coherent your demands for adjustment, the more successful you will tend to be. This is like any business negotiation.

One partner at a very large U.S. law firm once admitted to me that their corporate clients almost always ask for – and receive – billing adjustments.

Of course, when push comes to shove, unless you're accusing the lawyer of fraudulent billing, then typically by contract you are liable for the bills.

However, non-lawyers often assume that they will lose any dispute with their lawyers because it seems like lawyers have free access to the legal system. The reality is that there is a significant threshold that must be met before a law firm will sue a client for payment. That threshold will depend on the firm's opportunity costs, the costs of litigation, their assessment of reputational risks, how much they expect to actually collect, and sometimes just how ticked off they are.

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Take it as a given that you can always ask, even ask forcefully, for a discount. If the supplier agrees to a discount then the contract has been modified.

You need to consider:

  1. What you asked your lawyer to do
  2. What fee you agreed to pay for that work
  3. Did they perform the work that was asked of them and charge the fee that was agreed?

If the answer to the last question is yes then you are legally obliged to pay.

From your description, it is not clear that the lawyer in question ever offered poor advice. They may have had extremely good reasons for suggesting that you settle early; for a start that reduced everyone's costs and avoids the vagaries of a judge's decision - the law may be fair and impartial but judges are people; you don't want to go in front of a judge who's just had a fight with their spouse.

As for "not vigorously and competently representing" you; there is nothing in what you have said that supports this. Suggesting that you settle to you in private does not say anything about how vigorously they put your case to the other side; I have no doubt that their lawyers were suggesting that they settle too.

A year of litigation over a trade mark is an extremely rapid case (certainly in Australia it would be). The wheels of justice roll impartially, majestically and slowly! Settling on the steps of the courthouse is extremely common and some litigants actually have that as their plan all along - they hope that you will blink first.

Think of it as a learning experience; look at what it cost you with your lawyers fees and your experts and your own time and the next time you get sued make a without prejudice offer of about 50% of that.

Justice is an expensive luxury - just get on with Business.

  • Which brings to mind the letter attributed to Cornelius Vanderbilt: "Gentlemen: You have undertaken to cheat me. I won't sue you, for the law is too slow. I'll ruin you." – feetwet Jul 29 '15 at 23:23
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    Nice, or this by Jerome K Jerome "If a man stopped me in the street and demanded of me my watch, I should refuse to give it to him. If he threatened to take it by force, I feel I should, though not a fighting man, do my best to protect it. If, on the other hand, he should assert his intention of trying to obtain it by means of an action in any court of law, I should take it out of my pocket and hand it to him, and think I had got off cheaply." – Dale M Jul 30 '15 at 0:09
  • Incidentally, the OP's complaint is in part that his lawyer pushed him to settle. This is probably why. – cpast Jul 30 '15 at 4:45
  • Well "not vigorously and competently representing" was an edit not my original text. But to clarify... our company was clear from the beginning that paying license fee to the plaintiff was not an option - it automatically puts our company into inferior position industry-wise and this is when the plaintiff for us is not even a real competitor just our former client. Our lawyers were constantly diminishing our standpoint regardless of their lack of market knowledge. Conformism on the lawyers part is the issue - lack of will to represent our standpoint and pushing us into bad deal. – john Aug 4 '15 at 11:43
  • Justice became luxury exactly because of such attitude. It just feeds the rotting system. – john Aug 4 '15 at 11:47

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