The ethics of the second oldest profession

The ethics of the second oldest profession – new post by me at CDU Law and Business Online.

About Ken Parish

Ken Parish is a legal academic at Charles Darwin University, with research areas in public law (constitutional and administrative law) and teaching & learning theory and practice. He has been a legal academic for almost 12 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in he early 1990s.
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17 Responses to The ethics of the second oldest profession

  1. It’s called the second oldest profession for a reason. I’d say it is the oldest profession that has the professional ethics.
    The second oldest turns the tables, leaving clients with the impression that it was the client themself who was on the receiving end of the ..er.. service, rather than the expected vice versa.

    **********

    Hmmm, on that letter by the Nine big law firms. I’d translate it as they don’t like getting a bit of their own back.

    I’ll concede that their clients are mostly big & ugly enough to look after themselves, however that shouldn’t let them off being subject to the same regulation as the remainder of their profession.

    I’ll state that the big Nine would actually have a lot to lose, as close scrutiny by their “corporate” clients isn’t always all that close when put under the microscope.

    Corporate executives aren’t spending their own money. Thus in most scenarios, CYA is considered a higher priority than keeping legal fees to a minimum.

    If a law firm (say one of the big Nine) pulls a swifty on a corporate client, the executive commissioning the work will go in to bat with their own board of directors in support of the high fees. As the exec won’t want to confess to being responsible for a fee overrun, and will use a line like “This legal work has provided the company with excellent prophylactic measures, we’ll only have to avert one court case from a disgruntled client (or whatever) and we’ll be in front!”
    The board will think for a few seconds, nod sagely “The young feller is right you know, he’s done a great job of pro-actively protecting this company’s position”

    In the same situation anybody who is paying their own bill would be incandescant at the law firm for overcharging, or providing an unnecesary service.

    If a company is spending say $500,000 a year on legal services, who is going to notice or care that the first 15 minutes of what should be a straightforward discussion with perhaps two lawyers, is in fact a 15 minute cricket discussion with Three partners, two juniors, before getting down to business, with the meter ticking the whole time?

  2. Pedro says:

    The big law firms are correct about their markets, speaking from experience. The worst parasitism seems to happen at the consumer end judging from the news.

    I think Steve is partly correct, but mostly the clients scrutinise the fees pretty hard. They are used to paying a lot though. You have to remember that partly it is insurance that is being paid for. There is a limit to the level of PI insurance that even the biggest firms hold and it won’t cover fraud, so the firms doing the biggest deals have some pretty big risk they are managing. Back in the 90s an Allens partner (I think) stole $20mil or so and I expect the partnership had to cover that from their pockets.

    There are problems at the corporate level though, especially with 3rd party payers. I made an enemy of the local managing partner for a second tier national after complaining about a bill rendered to my client. $20k for a simple deed. His client was my client’s mortgagee.

    The hard part is getting rid of time charging. I’m not a litigator so these comments relate to commercial work. Event billing is often fine because you can estimate how long a certain job should take. But those estimates are often enough blown up by the attitude of the other side. It’s hard predict the amount of negotiation that will be required.

    Also, the bean counters are wedded to time billing as a way to manage costs. I tell young lawyers not to record time you can’t bill because the write-off is always harder to do than it should be. But that is contrary to the standard instruction and once the time is recorded it is hard to get rid of later.

  3. Mother Hubbard's Dog says:

    Nice article, Ken. I object to your headline, though. “Ethics” should be in quotes.

    What hope have we got of decent government when the majority of our parliamentarians are either ex-lawyers, ex-union hacks, or both?

  4. Ken Parish says:

    “Event billing is often fine because you can estimate how long a certain job should take. But those estimates are often enough blown up by the attitude of the other side. It’s hard predict the amount of negotiation that will be required.”

    Yes that’s also true of litigation. However it shouldn’t be beyond our wit to devise event-based charges that:

    (1) are sufficiently differentiated and therefore flexible to provide fair remuneration to the practitioner in the overwhelming majority of cases; and
    (2) also fair in a global “swings and roundabouts” sense i.e. you’ll come out in front in some cases and behind in others.

    For example, the NT Supreme Court scale has an optional “composite costs scale“. It’s optional in the sense that practitioners may adopt a time-based billing method if that results in at least 20% more than the prescribed composite scale fees. That simply gives practitioners the best of both worlds – in a very straightforward matter they can adopt the composite scale (if it results in their making more profit) but otherwise the time-costing method will prevail. Unfortunately the actual composite scale amounts are quite low (e.g. $470 for “providing discovery and inspection”). They are unlikely to be anywhere near adequate except in the simplest of cases. A realistic event-based scale should require that practitioners can ONLY recover that amount party-party unless they can establish that costs on a reasonable time basis are at least 40% more than that amount. One of the articles I linked mentioned that econometricians had been set the task in 2004 of fixing sensible, reasonably remunerative event-based fee schedules and had come up with results that practitioners thought looked OK. It should have been pursued then and it should be pursued now.

    I don’t think practitioners should be prohibited from charging more than any event-based party-party fee schedule, provided that clients are required to be clearly advised:

    (a) that there IS a set of scheduled event-based fees;
    (b) that there are perfectly competent lawyers who charge no more than the scheduled fees;
    (c) how much more the client is likely to end up paying by agreeing to the practitioner’s non-standard fee structure; and
    (d) the fact that even if they win they will only recover the event-based fees from the losing side and will have to pay their won lawyer’s shortfall out of their own pocket.

    Some of this is required to be explained now under the existing Legal Profession Act etc, but the transparency/consumer protection aspects need beefing up.

  5. How much worse off would (say) the example of Ms Liu be, were such cases to be on a contingency basis? Say 30% of a winning judgement, & nix if they lose.

    On the surface, it would stop all the rot, & have given her $98,000 of the $140,000 or have I missed a key point?

  6. JMB says:

    Hey, Steve at the Pub:
    I’ve found your blog, enjoyed a few morsels, yet could not find the relevant posting or how to subscribe to the RSS feed. A date would assist the former. Regarding the feed, all roads appear to lead to Google and thereafter to a dead end. Any clues?

    Back on topic, I used to work in a surveying practice. They held that surveying was the second-oldest profession after the obvious and before the lawyers.

    being untutored in the business practices of the First Profession and slightly familiar with the two putative Second Professions, I can see strong similarities when it comes to prebaring bills.

  7. Pedro says:

    That’s true Ken, but you need a good flow of instructions for the swings and roundabouts to work. It takes trust, knowledge and respect on both sides.

    I hate working for the govt cause everything has to be tendered and you can’t get the balance in the relationship. I have one govt client who I took off one of your big 9 by predicting that their ridiculously low fixed fee would bear no relation to the actual costs charged and paid. But they are sort of independent enough from the main govt for my style of charging to work.

    My mantra is to bill value.

  8. JMB: Thank you for reading. It is just stories of everyday life in the pub trade. Two of my favourite stories that spring to mind are:
    http://the-public-house.blogspot.com/2005/03/dial-000.html and
    http://the-public-house.blogspot.com/2007/07/eye-popping-experience.html

    Re your other request: (if that is what it is) Not sure I can help you, for you speak in computer jargon. All I know is I type stories into a blogger site & press the “publish” button.
    RSS feed = a phrase I have seen before, but I have no idea of the meaning. Perhaps if you…er… expand on that a little I may have some idea what it is you seek.

    I’ve seen surveyors at work in my childhood & youth. (Mostly they were from the SG) Nobody is going to call them the second oldest profession in my presence. They worked very hard, in trying conditions, camped out, sometimes carrying everything on their back for several days in difficult terrain. They add value to the economy.

    As opposed to the second oldest profession, which is basically administrative. A few strokes of a legislative pen, simplification of some laws, and hey presto! The need for that profession decreases. This would release plenty of intelligent & motivated people (lawyers) for productive work.

  9. Pedro: When you say “the write off is harder than it should be” (regards recording in the first place time for billing), do you mean that writing off time is unpalatable to the firm (or to the partner who has to do it) or that it is difficult administratively/procedurally?

  10. Pedro says:

    Recorded time is mental money in the bank so to speak, so when you want to get it written off it is treated as giving away money even though it was never billable in the first place. Therefore you get administrative resistance to it. Also, it is harder to look back a month or two and work out exactly how much should be written off.

  11. Mike Pepperday says:

    SatP – it is an ordinary assertion of surveyors that they are the second oldest profession. It is not an insult. On the contrary, it is the claim that surveying is the oldest genuine profession. The classic evidence for it would be the re-establishment of boundaries in the Nile valley after annual floods.

  12. Ken Parish says:

    “surveying is the oldest genuine profession”

    But how were those Egyptian surveyors spawned in the first place? True lurv or a more mercenary arrangement? And who sorted it out if there was a dispute?

  13. Mike Pepperday says:

    I’m sure they would have been paid. All the boundaries vanish every year so it was a big deal and quite complicated.

    When it came to sorting out boundary disputes they would, then as now, be expert witnesses.

    The law is much more ancient than surveying. But dispute settlement was a ruler’s duty. The question would be when there was a recognised profession consisting of people who practiced as lawyers.

  14. Regards people such as the one in the link, who charged $98.00 to receieve a one-word email that said “recd”. I often wonder how they cope with life.

    It must really play with their head to read stories to their kids at night. (“Here I am reading Hansel & Gretel for free, when I could be charging some rube hundreds of dollars for the same thing”)

    How they ever line up to mount their spouse, knowing full well how much they can charge for that time, must be equally tough on their psyche.

    On another chat forum a lawyer became indignant, (no, incandesent would be closer to it) at me for floating the possibility that a lawyer could go to lunch as a social event. It seems that everything is an hour that must be charged for, even lunch. There’d be a 50/50 chance this person issued a bill for $250 to their fiance, for “preparing and delivering proposal of marriage”.

    May posterity overlook that these beings shared a common citizenship with me.

  15. Pedro says:

    “It must really play with their head to read stories to their kids at night. (“Here I am reading Hansel & Gretel for free, when I could be charging some rube hundreds of dollars for the same thing”)”

    I’m told that a senior partner of a top tier firm in Brisbane used to read the bedtime story to his kids over the phone from the office. So maybe he did.

  16. JMB says:

    @ Steve @ the pub:

    RSS feed is the means by which, like magic, into a certain mailbox of Outlook comes a notification that another post has been made on Troppo, or BraveNewClimate or, perhaps, your pub yarns.

    Dunno what the letters stand for, though. I’m an engineer, not a mindreader.

    I just don’t see how your site knows who to send these little sessages to and when. Usually, it requires only a single key press and, perhaps, entry of a name and alias (eg JMB).

    I’ll wait for inspiration.

  17. I’ll hazard a guess it’s one of those firms that bangs on about how they support & provide a “work life balance” under the “working at eagle & legal” tab on their website.

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