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I assume certain arguments sound great on paper but fail miserably when spoken aloud. I assume that's why the courts do oral arguments. Can you list some famous arguments that sound good on paper but which are lousy when spoken aloud, along with your answer?

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Your assumptions are incorrect.

Courts allow oral arguments (when they do allow them) so that attorneys have a chance to better address a judge's concerns. The idea is that it lets an attorney not only present the core of his case, but it also lets him address any problems with his reasoning that the judge may have or help the judge explore a complicated question. Without that all you have is the back-and-forth in writing with opposing counsel, which is useful, but may not actually address the issues that are important to the judge.

There is some difference in how you present arguments on paper as opposed to in oral argument, but the distinction is largely one of style rather than substance. An argument that is great on paper is still great when presented out loud, you just present it differently because you are presenting it in a different medium.

For example, you have to present oral argument with the assumption that the judge may interrupt you at any time to ask a question they are interested in, derailing your entire pre-planned argument into a tangential point the judge considers important. This is great because it lets you address what the judge is concerned about, but it requires a different preparation and some changes to the format of your argument. For example, while you will front-load both oral and written arguments with a roadmap, both your roadmap and your first sentence are much more important in oral argument.

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The use of oral argument depends upon the court. In the Supreme Court nearly all cases have oral argument. In the Circuit's the vast majority of cases do not get oral argument. In the District Court, the judges don't want to see the lawyers if they can avoid it.

A District Court oral argument is invariably Q&A and is held only when the judge has questions.

In the Supreme Court and Circuits, oral arguments are short presentations given by the lawyers to highlight key points; presentations that get interrupted.

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