If that fails to yield results, think very, very hard before taking your attorneys to court. It's instructive that large corporations tend to file malpractice suits only as a last resort. Instead, they use their financial leverage to pressure lawyers for better service. You can do the same. When fees are out of control and calls aren't returned, move to a different firm. Will the legal world get the message and clean up its act? Customer service has improved in recent years. But the pace of change has been frustratingly slow, says Jonathan Bellis, who consults with attorneys from the Somerset, N.J., office of the professional services firm Hildebrandt Inc. "It has absolutely not been a revolution," says Bellis. "This industry moves like a battleship." But rather than despair, just remember: Even battleships have commanders. The trick is knowing how to issue orders, enforce crew discipline, and avoid the torpedoes.
Sidebar: Which Side Is Your Lawyer On?
Back in 1995, Spence Jackson's Austin start-up, SigmaTel, was pursuing venture financing and needed some legal help. Jackson's main concern: protecting his company from patent claims on the computer audio chips it was developing to compete with Crystal Semiconductor, which had a head start on the technology. SigmaTel's VC firm suggested Brobeck, Phleger & Harrison, a high-flying West Coast firm. Jackson hired the firm and was impressed with its work. But their relationship was short-lived; the firm and SigmaTel parted ways several months after Brobeck's VC ally pulled out of the deal.
SigmaTel found financing elsewhere and Jackson never gave the matter much thought -- until four years later, when he was hit by a bombshell: Cirrus Logic, Crystal's parent company, was suing SigmaTel, alleging that the start-up had infringed on its patent on the very same audio chip. The law firm representing Cirrus Logic? None other than Brobeck, Phleger & Harrison.
For SigmaTel, the timing was disastrous. The company was racing to go public, and that would never happen with a patent fight looming. Even worse, the lawyers who should have been helping the company mount a defense were on the opposing team. After months of costly skirmishing, SigmaTel got Brobeck booted from the case. But by then, the tech bubble had burst and the IPO window had slammed shut. SigmaTel, which was forced to lay off employees to cut costs, filed a malpractice suit against Brobeck. The law firm denied doing anything wrong but agreed to a $3 million settlement.
Ultimately, SigmaTel overcame its financial woes. (Jackson left the company in March 2001.) When the company's IPO finally did happen in 2003, its market cap approached $1 billion. By then, however, Brobeck was no more. The firm had collapsed in early 2003 after overdosing on dot-com work.
Jackson now has a new start-up, Metanoia Technologies, and relies on a small patent firm. "They're ideal for where we're at now," he says. Money-focused large firms, Jackson says, sometimes "don't have strong ethics." One other bit of advice: Develop a personal, direct relationship with your lawyers. When VCs call the shots, things may not turn out as planned.
Sidebar: Think Your Lawyer Is Ripping You Off?
John Marquess, founder of Legal Cost Control, in Haddonfield, N.J., is one of the nation's leading auditors of legal bills. Marquess has seen it all, and the trouble, he says, almost always starts with a vague or one-sided contract between client and lawyer. Here's his advice to clients seeking an ironclad retention agreement.
Get it in writing. Always, for every piece of legal work -- even when dealing with longtime outside counsel.
Be explicit about staffing and billing rates. Know exactly who will work on your case and what each lawyer's and paralegal's billing rate is. Refuse to pay for two or three people to do the work of one at routine meetings or hearings. Stipulate that no new attorneys can be added to your case without your written approval.
Ban markups and specify allowable expenses. Get approval rights over all expenses -- travel, meals, online research, outside experts' fees, photocopying, etc. In other words, just say no to the 25-cent-per-page fax and car service for secretaries who work late.
Insist on clear bills. Block billing -- in which a number of tasks, performed by any number of lawyers, are lumped together and totaled into a single sum -- is what you don't want. Demand a detailed statement that breaks out discrete tasks and their costs. And get a monthly statement -- the more time that goes by, the less likely billers can remember the details.
Plan for the worst. Even lawyers (strike that: especially lawyers) need a prenup. Insist that disputes go to mediation or arbitration. And don't allow what's called a retaining lien, where you fire your lawyers but they hold on to your file until they're paid what they say they're owed.
