I recently had the pleasure of talking with a Hennepin County judge who told me something I have heard many time before. Of the criminal bar, the personal injury bar, the family law bar, and the business litigation bar, there is no comparison when it comes to unreasonableness. Business litigators, the consensus is, are comparatively uncooperative and unpleasant.
I have been following Fagen v. Exergy for nearly three years now. The case has generated a boat-load of legal fees. There has been a great deal of motion practice, and it keeps going and going….Most recently, Exergy has brought a motion to compel because Fagen has apparently produced the mastermind for an asset purchase who claims to have no recollection of any of the details of that purchase.
What about “business litigation” or “commercial litigation” makes it particularly disputatious and expensive?
1) Unlike the criminal bar or niches of specialized litigation like, say, the personal injury bar or family law, each case is generally “one off” by which I mean there are less frequently “repeat players.” So Lawyer A does not have to worry so much about “what goes around comes around” as she attacks Lawyer B. In family law, by contrast, the shark pool is smaller. If someone “acts up” with you, others in the pool will know it, you will not soon forget it, and there is a chance you’ll be in the other shark’s blind spot some day or another…
2) If you pay lawyers by the hour, they will tend to “make” lots of hours. This may seem cynical and some might bristle that it unfairly labels business litigators as unethical. This is wrong. Think of it this way, if you can do “an adequate job” in 3 hours and “an excellent job” in six hours, which are you going to do if you are paid by the hour? Which are you going to do if you are not being paid at all? Contingent fee lawyers (personal injury plaintiffs’ lawyers, for example) are sometimes looked at with contempt by the hour-billing adversary for their relatively slap-dash practice. This different compensation model can explain the difference sometimes.
3) There is a lot more variety in “business litigation” or “commercial litigation,” as a field of battle, than criminal cases or, say, the garden-variety slip and fall case. The cases are more complicated, so the adjudicative process is more expensive.
4) When a fight is over $10 million, investing $2 million is not insane, right? Sometimes lawyers’ intransigence might be distasteful, even ugly. But, apparently, sometimes, at least, it is economically rational (if not morally praise-worthy).