“I don’t know what this lawsuit will cost because there are so many factors involved, and I don’t control many of them.”
Can’t tell you how many times I have heard experienced litigators voice this sentiment when asked at the beginning of a case to estimate what the attorneys’ fees will be.
That world is beginning to change rapidly.
Large law firms that often represent the largest corporations used to have more leverage than anyone when it came to saying that it was just too hard to provide an estimate. But increasingly not only are they providing an estimate, they provide a budget that the client can monitor on a daily basis.
What happened to create this change? Two primary factors—technology that allows lawyers and clients to interact online in real time, and faster and larger computers that crunch huge volumes of numbers. The second factor is often called “big data.” It has widespread applications well beyond the relationship between lawyers and clients.
Here’s one example of how “big data” helps large law firms and their clients create budgets for a civil, non-criminal, law suit. Imagine that you are involved in a lawsuit in which one of your supervisors who works in Houston has been accused of age discrimination. The case has been assigned to a particular judge. Should you spend the money to file a summary judgment motion? In the pasts lawyers would use their gut feeling and their personal history with the judge to answer the question.
But now there are data bases that can help answer that question much more precisely. Specifically, computers can now crunch vast amounts of time entries submitted by lawyers to other clients and create budgets based on historical performance. Thus, for example, the database might reveal that this judge has heard 13 summary judgment motions in the past five years on this issue, and granted five. Moreover, the attorney time for filling this motion ranged from $30,815 to $63,007. I made these numbers up, but you can see the power of this approach. Rather than relying on the lawyers gut feeling, large corporate clients increasingly have access to information that allows them to know in advance what the attorneys’ fees in a particular lawsuit should be based on historical data. That in turn allows the client to help set a budget. And when lawyers charge by the hour, cloud-based computer systems allow the client to see how much the lawyers are spending on their case every single day. This is what some large law firm lawyers are already doing. And in my opinion this will be the future for lawyers who represent smaller companies or who are involved in smaller disputes.
So the next time a litigator tells you that they couldn’t possibly tell what defending a certain lawsuit will cost? Ask them why they can’t at least provide an estimate or a range of expected attorneys’ fees based on their historical results. If they really are experts, they should be able to tell you. There are unknown factors that influence the cost of a law suit. But just because you can’t predict attorneys’ fees precisely doesn’t mean that you can predetermine a range in which they are likely to fall.