How do Layers Maximize Profit When They're Assigned?

 How do Layers Maximize Profit When They're Assigned? 

Written by: Kierstyn Krauss 

A lot of people cannot afford to hire a private attorney for one simple reason: it’s two expensive. There are four common fees you’ll encounter if you decide to go private if you find yourself to ever be accused of a crime: a retainer fee, a contingency fee, an hourly fee and flat fee. A retainer fee is the cost it is to just to prove to the attorney that they are financially capable to pay them and it also serves as a fund for the attorney to use for billing and other legal fees they might encounter on behalf of their client. A contingency fee is something paid only if you win a case. An hourly fee is what an attorney charges for every hour they work on your case. A flat fee is a monetary amount that is set for the work to be done that doesn’t change. Any lawyer with any payment plan that you pay them is going to be pricey. Which is why the Constitution allows for the appointment of counsel and public defenders. 

These positions are very different from one another. An appointed attorney is still a private attorney, but they go through a different incentive system appointed by the courts. Essentially, through a contract-basis they volunteer for this system and get chosen randomly by who needs an attorney. While public defenders are employed by the government and they only work with people who can’t afford an attorney. Private attorneys get paid by some of their clients and not by others if they volunteer for this program. 

So how does a private attorney maximize their profit? Well, first they might not want to volunteer for this program. They get paid by the courts but not nearly as much as they would get paid by a client they retain. But let’s say this attorney was assigned and they’re still trying to get the most amount they can. That’s an easy solution for some, they just go through these cases faster. They spend more time on the clients who choose them and are paying them directly rather than those who aren’t able to pay. According to the Administrative Office of US Courts, in a Felony case, an appointed lawyer can make a total of $11,800 for a trial court level. This is typically either a retainer fee or a flat fee depending on the municipality. The amount seems like a lot, but that is the maximum set, not the minimum, so not every lawyer who takes a federal felony case will make that much. According to the LawMan for a first degree felony can cost the average person between $10,000 and $100,000. But, if you want a more experienced lawyer you’re looking at $35,000 as the lower end of the price spectrum. Which means that in order for a lucrative lawyer to maximize their profits, they either have to take on a lot of appointed cases OR go in depth with a few people who pay them much more for their work. 

However, how would you feel if you were given a lawyer who didn’t want to spend a lot of time on your case while the prosecution spends weeks or even months on some of these cases? Probably not very good, maybe like you’ve been cheated by the system simply due to your lack of financial resources. That’s one of the other prevalent aspects of this, the morality of it all. In many market structure cases like oligopolies, the consumer may not be able to really dictate the price but there is a point when they won’t be willing to pay beyond that. So, they might seek out one of the few competitors instead if they offer a similar product. But, in the legal system attorneys are given to defendants who cannot afford or obtain a lawyer (if you can afford one, but can’t get one, they give you one with a payment plan). They don’t have the benefit of competition and the lawyers are chosen simply by the time that they haven’t had a case since (according to Aber, et. al from the National Bureau of Economic Research). Which can lead to a lack of expertise in the kind of cases that these legal professionals are given. 

The chart above shows from NBER that less experienced attorneys are more likely to be allocated to those individuals that cannot afford an attorney. Thus, not only are they spending less time but they’re less experienced. There are a lot of lawyers today and many people who are going through law school to become one. That means they need jobs and more people may be willing to take less lucrative cases to ensure they have a job in the first place once they graduate law school. 

Cornell Law School highlights the Federal Rules of Criminal Procedure under rule 44 subsection A that, “A defendant who is unable to obtain counsel is entitled to have counsel appointed to represent the defendant at every stage of the proceeding from initial appearance through appeal….” This protects the defendants from self-incrimination early in their case, but if you notice it doesn’t say anything about requiring some kind or any kind of screening or matching that the attorneys should go through with the clients they represent. Sure, all practicing attorneys go to law school and there they learn a little of all types of law. But, say if a lawyer only has worked in family law for 10 years and then receives a capital murder case on their desk, they may be a little bit rusty with that aspect of their knowledge. Thus, in this type of market structure many “consumers” otherwise known as the accused, are often worse off in a perceived trade scenario. They are only marginally better off than representing themselves if their representation only cares about the profit they receive off of taking their case. In a sense, these legal professionals are having a price ceiling imposed on them for their services. They cannot charge more and can only receive a maximum price that the court pays them for their legal services. 

In conclusion, how do assigned lawyers maximize their profit? In short, they can take on more clients and get their cases done sooner. If an attorney spends 6 months on their cases that they get paid directly for, versus 3 months on a case that they are given by the courts, they could theoretically make $23,600 on two felony cases, which is two times more than if they spent more time. But less time typically correlates to less effort according to the National Bureau of Economic Research. Which means that these people aren’t getting proper representation and consideration of their cases that their attorneys should be giving them. So, how do you think lawyers should solve this problem, take on more cases with the risk of imposing less effort to maximize their profit or just live with the less amount of money they get from helping these people so the consumers in this instance can benefit? 

Works Cited 

Agan, Amanda, et al. “Is Your Lawyer a Lemon? Incentives and Selection in the Public Provision of Criminal Defense.” NBER, National Bureau of Economic Research, 3 May 2018, www.nber.org/papers/w24579.

“Chapter 2, § 230: Compensation and Expenses of Appointed Counsel.” United States Courts, Administrative Office of US Courts, www.uscourts.gov/rules-policies/judiciary-policies/cja-guidelines/chapter-2-ss-230-compensation-and-expenses.

“Rule 44. Right to and Appointment of Counsel.” Cornell Law School Legal Information Institute, Legal Information Institute, www.law.cornell.edu/rules/frcrmp/rule_44.

The Umansky Law Firm. “Orlando Criminal Defense Attorney.” The Umansky Law Firm, The LawMan, www.thelawman.net/Criminal-Defense-Articles/How-Much-Will-a-Lawyer-Cost-Me/.

“What Is a Legal Retainer and How Does It Work?” Fenza Legal Services, Fenza Legal Services, fenzalaw.com/what-is-a-legal-retainer-and-how-does-it-work/.