5 Part Series: The Missing Piece, Part 3
5 Part Series: The Missing Piece, Part 3
Part 3: The High and Unexpected Cost of Legal Help
At the beginning of the Missing Piece Series, we stated that employee stress directly affected by personal legal crises and emergencies is an undiscussed factor of employee and financial wellness. In the second part, we examined the stress caused by the legal problem itself. In this part of the Missing Piece Series, we consider the factor of the high and unexpected cost of legal help for your employees.
A fundamental stress producer inherent in the American legal system is high attorney fees and repeated delays that can cause legal expenses to skyrocket. This second challenge has three sub-parts:
- the lack of an emergency fund to pay for legal fees;
- the inherent and seemingly unnecessary delays that cause the legal bill to escalate; and
- the often unfounded but prevalent expectation the opposing party will pay all legal fees if the employee is not at fault in a lawsuit.
1. Employees do not have thousands or tens of thousands of dollars in reserve for legal expenses.
The bottom line is simple: Attorney expenses drive whether an employee can start or continue a legal case. Since most employees do not have an emergency fund for legal fees, not having money to pay for legal counsel may be one the most substantial producers of employee stress.
Question Why is the cost of legal help so high?
Answer Legal expenses are high, in part, because of litigation costs have skyrocketed and modern legal problems can be very complex.1
The fear of unaffordable legal fees paralyzes many moderate-income Americans from accessing legal assistance. And while would-be clients, courts and lawyers struggle to find cost structures that bridge the gap between needs and services, another barrier — distrust of the private bar — is cited repeatedly.2
“What most people don’t realize is that — while how you divorce or what there is to split may play a part in the cost — the number one way for you and your spouse to save money in a divorce is to deal effectively with the emotional aspects of the split.”3
- Susan Pease Gadoua, Divorce Expert and Author
Of course, dealing with the emotional aspects of divorce is easier said than done. With the build-up of many years of anger, resentments, neglect or jealousy, as well as demands for justice and vengeance, these emotions can and often drag cases through years of litigation.
The net effect of a lack of extra funds can force the settling or abandoning of a lawsuit or legal dispute before the case is won since most employees do not have a rainy day lawyer fund and may be forced to use their savings, take out a loan or even borrow money from a 401k retirement account. In addition, most employees are not sure how much money might be involved in resolving disputes.
Many employees do not understand the billing system in the legal world, nor do they understand how fees can be so high. Under a microscope, legal fees can create a number of misunderstandings.
- A lawyer generally charges an hourly rate for time spent on a legal situation, not based on the outcome or results. Experience, expertise, personal relationships with the judge and other non-tangible services are also reflected in an attorney’s hourly rate.
- Broken down into its technical aspects, what causes problems and, ultimately, stress for an employee as a lawsuit continues drags on lies at the intersection of two sub factors:
- the complicated and overwhelming legal system procedures that require more and more explanation from lawyers to help employee-clients better understand what is happening in the case; and
- the reality that the more explanation the lawyer provides the client equals more time the lawyer spends on the client’s case which leads to a higher legal bill.
- Clients of law firms routinely complain about legal fees, but few take the time to understand how lawyers record their billable hours and generate legal fees. Clients continue to pay for legal fees, so they must feel in some way that the fees are a good deal, but they often resent an attorney’s bills because of a lack of understanding about the way lawyers bill their time.4
- It may not be until a client sees the first attorney’s bill that it is clear time equals money. Every time a question is asked or a conversation takes place with a lawyer, the bill goes up. To keep costs down, the client may stop asking questions and the lawyer may opt to spend less time on a client that can’t afford large monthly legal bills.
When you put the employee’s perspective under a microscope, more misunderstandings unfold:
- The employee sees the legal system as complicated and unwieldy.
- Not being informed about what is happening in the case or why certain things happened hurts a client’s understanding of the legal process.
- Attorney failure to provide a detailed explanation of the legal processes and procedures leads to a lack of understanding, which in turn leads to frustration, anger and other stress factors.
When an employee feels that an attorney is spending little time on the case or is not communicating developments, the employee’s stress increases, particularly as the case progresses. As a client, the employee has questions, needs answers and explanations, and gets frustrated when the attorney is not forthcoming. The employee also gets increasingly upset having to spend more money to get seemingly simple answers to basic questions.
In this era of information overload from the internet and other sources, an employee may have a difficult time when adequate information is not provided by the attorney and may feel that the attorney is not interested in educating and updating about the case unless billable time is involved. After all, a client might reason, all that’s needed is an understanding of a few critical legal terms that may help the litigant be make the more informed decisions about the legal matter.
Now consider a workplace scenario in which employees are involved in protracted litigation. Without an understanding of the legal system, the employees may become increasingly frustrated at both the system and their attorneys. For some employees, this will spur bouts of depression or missed workdays. Others, equally anxious, lack focus on the job, as their minds are consumed with the uncertainties surrounding complicated legal scenarios.
For a forklift driver preoccupied with the fear of losing a child to a drunken or abusive spouse through a court action, this could spell danger to himself and others, and the costs of these problems to the individual worker, business associates and the company can be huge. Without warning, the distracted forklift driver, for example, might dump an entire palette of heavy machinery on several unseen employees taking a coffee break.
In addition to major accidents and injuries on the job, costs can also include absenteeism, the lack of focus of a worker on the job —presenteeism — along with mistakes and internal conflict that impact productivity.
If employees could better understand the fundamental hurdles in the legal system, and if more effective solutions and support for workers could be implemented, the immense personal costs would be reduced significantly. Similarly, if HR could better understand these issues, steps could be taken by the company to find ways to confirm that help is on the way for employees.
2. Inherent delays seem unnecessary and add thousands of dollars to the legal bill.
The second part of the second challenge — the lack of reserves set aside to pay for the high cost of attorneys — is the pressure caused by delays in the court system that also add to the attorney bills.
Before being involved in a lawsuit, many employees may not fully appreciate how long it takes to get a case to trial or resolution. One of the most widespread obstacles to a fast and satisfactory resolution of a lawsuit is accepting that court rules and procedures may actually impede a quick resolution. In a nutshell, the lengthy procedural steps in America’s legal system are real.
The Institute for Legal Reform conducted a detailed study about lawsuit delays.5 One of the most common complaints about the court system, particularly when compared to mediation, is the timespan and its impact on legal fees.
This frustration with delay can be illustrated by one of the most common issues confronting an employee-participant in most any court action. As an example, the opposing party asks the judge for a continuance [a postponement of the court business already scheduled for that day] for a date several weeks in the future. Without realizing the impact on his or her own client, the attorney for the employee-participant agrees. Continuances — postponements —are a normal procedure in all court cases and are routinely granted for a myriad of reasons.
While this may be routine in the legal system, the employee probably does not understand why his attorney never spoke up for his client’s position to the judge and why there was no progress in court despite the employee having taken a full day off work. Before court cases even begin, however, lawyers are able to make a number of motions that add more time to pre-trial actions. The motion that is most obviously a cause of court delays is this continuance, which allows a party to choose to wait to go to a hearing, motion or even trial until a later date.6
Repeated delays in the case create serious frustration and stress for an employee that does not want to compromise, believes a win is forthcoming or cannot see the lawsuit being resolved in any realistic timeframe. In most cases, the employee is already having serious financial or legal issues because of the lawsuit, and delays exacerbate the financial strain. Other employees may complain that lawyers drag out and overstaff cases unnecessarily, possibly to inflate their expenses on a case.
Participants in the American Bar Association Study7 offered these comments:
“I gave a deposition a while back, and the other side had three lawyers and an assistant there. There were four of them, and I had my one lawyer. The other side was probably $1,000 or $1,500 an hour for asking me questions. They didn’t have to do that to their client. One of them could have asked all of the questions.” Male, 57
Los Angeles, California
“Sometimes lawyers are very shrewd in knowing how to drag a case out. And, the reason for that is the fee keeps going. They are not stupid.” Male, 58 Boston Massachusetts
“I had an experience with one lawyer where I just felt they were money hungry. They stretched it out over a year. To me, they deliberately held on to my check so they could get interest on it.” Female, 32 Los Angeles, California
In reality, an attorney for one side may often give the other side the benefit of the doubt early on for a continuance requests in case he himself needs one in the future. If an employee-participant doesn’t understand how the system works, frustration and stress mount early. As litigation proceeds, the need to end the lawsuit somehow becomes more pressing to the employee-participant, which can cause even more stress for several reasons. The employee may realize their attorney is part of unwanted delays, the lawsuit is not getting resolved and justice is not being served because of ongoing delays.
Anger, frustration, mental anguish, depression and helplessness are all caused by financial and legal issues and often do not appear to decrease or go away as the litigation moves ahead. While most employee-participants initially believe a lawyer should make “it” go away once the lawsuit is filed, delays stare back at them. In reality, the legal system itself causes increased stress over and above the stress and anger the underlying lawsuit causes.
These inherent delays oftentimes seem unnecessary and without merit, and the procedural steps in almost every court action increase an attorney’s time and fees. An employee-participant will feel stress, anger and frustration that the attorney is working in the legal system but seemingly not for his benefit. This increased stress and frustration carries over into the workplace, becoming a serious external circumstance with a range of work-related consequences.
3. Many employees mistakenly think the opposing party will be forced to pay all legal bills.
There is generally a complete lack of understanding as to who is responsible for paying lawyers in a lawsuit.
To illustrate, consider the following scenario. An employee is incorrectly billed $44,000 one month for mobile phone usage fees when the monthly bill averages $200. During phone calls to dispute the charges, several mobile phone company associates admitted the charges were incorrect and the employee should not have to pay. However, the employee is sued for $44,000 plus interest and attorneys’ fees. At the outset, the employee believes he will be vindicated, the incorrect bill will not have to be paid and the mobile phone company should pay the employee’s attorney’s fees.
Employee Belief: I will be able to recover most of my costs when I win my lawsuit.
Reality: In most cases, without a prior written agreement, each party pays its own legal fees and expenses.
An employee involved in a lawsuit may also believe that attorney’s fees will be recovered at the end of the case if the ruling is in his favor especially where the case seems bogus. In limited situations this may be true, but each party generally pays its own costs and expenses, even when a lawsuit is bogus or the suing party is wrong. Unfortunately, an employee may not realize until some point during the court process that the legal fees will end up costing as much as or even more than the amount of the legal battle. This is our example above – the employee has to unexpectedly defend a lawsuit, hire a lawyer and find money to pay retainer fees – all on a lawsuit that the company’s employees have admitted was a mistake. Yet, there is no easy forum by which to vindicate himself and explain the $44,000 mistake.
To the employee, this seems not only unfair, but also the significant cost associated with legal representation exponentially increases the high degree of frustration, dissatisfaction, stress, anger and emotional distress associated with the financial or legal problem. After all, the offending party has already cost the employee a significant amount of money, and now the employee must spend more money to pay for an attorney to try to recover the loss, have the lawsuit dismissed or resolve the issue.
It is not surprising, then, that employees routinely report that delay and the resulting expenses exceed fairness and create an enormous amount of hostility and anger and a lack of concentration routinely brought into the workplace.8
An employee engaging with the legal system for the first time will often be distressed to learn it operates differently than expected. Stress is ignited the moment a person walks into an attorney’s office or courtroom. Trepidation and discomfort heighten the pressure, which all too often carries over into the workplace. This stress is exacerbated more when the employee, such as the one in the mobile phone lawsuit scenario, believes he is on the right side of the litigation and should not even be in court. This expectation can create a disconnected gap between belief and reality.
When employees face legal matters, the stress of the legal matter and the stress of paying for all the costs of the legal matter can be overwhelming and devastating. There are two factors that contribute to employee stress when they face legal matters. In the fourth part of the Missing Series, we will examine the fourth challenge of employees of not knowing which attorney to use or not having an “emergency” attorney when one is needed.
1Quote from Anne-MarieDorniing@bostonannemarie, ABC News, July 2, 2007.
2“It’s Not Just Money Fears Blocking Access to Legal Help; Lawyer Distrust Is Growing,” Posted Dec 1, 2012 3:20 AM CDT, By Rachel M. Zahorsky.
3Nancy Kay, Moving Forward Through Divorce. February 12, 2012.
4“3 Little-Known Truths About Legal Fees and Billable Hours, Correcting Misconceptions About Lawyers Who Bill Their Time,” William Tapscott, Yahoo! Contributor Network, June 27, 2010.
5“What Are Frivolous Lawsuits?” January 17, 2010, Frivolous Lawsuit Information, Joseph Devine.
6“Causes and Consequences of Lengthy Court Delays,” Sarah Foltz, Yahoo! Contributor Network, July 2, 2009.
7“Public Perceptions of Lawyers Consumer Research Findings,” American Bar Association Study, 2002.
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