Litigation Finance

Volume 5 • Issue 6 • September/October 2019
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Hidden in Plain Sight

The empirically elusive plaintiffs' bar

One of the key parts of the legal profession being impacted by the rise of litigation finance has been the plaintiffs’ bar (for a perspective on litigation finance from a plaintiffs’ lawyer, see “Risky Business”). It makes sense—these funders offer plaintiffs’ lawyers, many of whom have always taken cases on a contingency basis, a means to mitigate risk by shifting some of the funding burden to outside investors. (It is important to note that litigation funders will often fund clients directly, paying their expenses, for instance.) Yet, as Sara Parikh has noted, “the plaintiffs’ bar [has] received scant attention among legal profession scholars.” One possible explanation for the elusiveness of the plaintiffs’ bar may be the ambiguity surrounding which section of the bar “plaintiff” is referring to. One might read “plaintiffs’ bar” as specific as, say, personal injury lawyers representing a single client, all the way up to major mass tort litigation. Indeed, it is difficult to find reliable figures of the plaintiffs’ bar that speak to its full size and scope. Bill Henderson, the Stephen F. Burns Professor of Law at Indiana University’s Maurer School of Law, has suggested that some of the blind spot could be explained by the absence of plaintiffs’ lawyers from law school campuses relative to corporate lawyers and other parts of the bar. Another likely obstacle to understanding the plaintiffs’ bar is the stratification of plaintiffs’ lawyers across several metrics, such as client basis, specialization, income, and social and education background, among others.

Jerome Carlin’s Lawyers on Their Own, a book published in 1962 that examines solo practitioners in Chicago, is still cited by many scholars today. The forward to the book’s 2011 edition notes that Carlin, who collected his empirical data from 84 in-person interviews with solo practitioners, sought to add to a conversation that was often dominated by research on large law firms—an approach that has helped serve as a foundation for further study. “Carlin distinguishes between what he calls the ‘lower’ and ‘upper’ segments of the solo bar handling personal injury cases,” Herbert M. Kritzer writes. Kritzer continues:

Lawyers in the lower segment drew their clients largely from a neighborhood or ethnic base and were most likely to handle personal injury cases in the context of a general practice; lawyers in this lower segment were very concerned about competition for clients. In contrast, the “upper” segments of the solo personal injury bar tended to be specialists who frequently drew clients through “suppliers,” including referrals from other lawyers; these lawyers were much less concerned about competition for clients.

Parikh homes in on networks and referrals as amplifiers of the type of stratification diagnosed by Carlin. She argues that the way plaintiffs’ lawyers—specifically personal injury lawyers—get their clients tends to impact the types of cases they work with. “Low-end attorneys are … much more likely to rely on advertising to generate business,” she explains, using Carlin’s framework of “upper” and “lower” segments. So-called high-end attorneys, she notes, on the other hand, are more likely to benefit from referrals from other lawyers that lead to higher-paying, more-prestigious work (such as mass tort litigation). Parikh writes in her conclusion:

The market for personal injury cases is not a free-for-all. Instead, it is a highly structured market. The channels by which cases flow in the plaintiffs’ bar are well-worn. Personal injury cases are not evenly or randomly distributed among personal injury lawyers. This is not by chance, or even because of informed consumers. Consumers are not knowledgeable in this setting. It is personal injury lawyers and their referral sources that reinforce and reproduce the stratification within the personal injury bar. Personal injury lawyers send cases both up and down the hierarchy, and non-personal injury lawyers send cases to personal injury lawyers in recognition of the stratification in the profession.

In addition to client base, income satisfaction also varies widely among segments of the plaintiffs’ bar. According to an empirical analysis of plaintiffs’ lawyers conducted by Rebecca Sandefur, among surveyed lawyers who devoted 50 percent or more of their practice to plaintiffs’ personal injury work, only 15 percent of those earning $45,000 were satisfied with their income while 97 percent of those earning $162,500 were satisfied. When the sample accounted for those who devoted 25 percent or more on plaintiffs’ personal injury work, the numbers shifted to 23 percent and 93 percent, respectively. Indeed, examining those at the upper end of this hierarchy, Henderson notes that top plaintiffs’ lawyers, including many of those engaged in mass tort cases, often earn higher incomes than even partners of prestigious corporate law firms.

Interestingly, there is evidence that the education backgrounds of highly successful plaintiffs’ lawyers differ significantly from those of their Big Law counterparts. Using data from the Inner Circle of Advocates, an invitation-only group of the United States’ top plaintiffs’ lawyers, as well as data from a sample of five Am Law 200 firms, Henderson illustrates a near mirror image. Bifurcating each sample according to those who did and did not attend a top 25 law school, Henderson found that while approximately one-third of Inner Circle lawyers attended top 25 law schools (32 percent and 68 percent, respectively), the opposite was true for the Am Law 200 lawyers (64 percent and 36 percent, respectively). “Granted, some (or possibly all) of this differential can be explained by the more stable earnings trajectory of corporate lawyers,” Henderson writes. “But I also wonder whether successful trial practice may entail attributes that are not strongly correlated with law school entering credentials (e.g., LSAT and UGPA).”

There is also evidence that the plaintiffs’ bar may be more concentrated in some practice areas while scarcer in others. For example, Deepak Gupta argues that much of the plaintiffs’ bar lacks a strong appellate section—a vacuum he suggests the plaintiffs’ bar has a clear interest in filling. After all, following any big win over a well-resourced defendant, a plaintiff’s case will likely go to appeal. Gupta says empirical evidence points to a disparity at the appellate level as a possible access-to-justice problem. “Most state and federal appellate judges report major disparities in appellate advocacy, law clerks admit to being swayed by sophisticated appellate counsel, and rational market actors pay a premium for top appellate advocates,” he writes. As we explore throughout this issue, litigation finance may increasingly be a viable solution to these types of problems by allowing more traditional law firms to engage in large plaintiff work, including appeals, while mitigating risk.

In the end, all this research offers only glimpses of the plaintiffs’ bar from a few select angles, and there are other possible vantage points to consider, such as specific practice settings, specializations, geographic regions, and others. (Indeed, for a thick profile of one such lawyer, see Sara Parikh and Bryant Garth’s masterful profile of Philip Corboy in their article “Philip Corboy and the Construction of the Plaintiffs’ Personal Injury Bar.”) Undoubtedly, a population as segmented and stratified as the plaintiffs’ bar presents real empirical challenges. The question for legal profession scholars moving forward is how to capture that nuance in comprehensive empirical research.

Litigation Finance Volume 5 • Issue 6 • September/October 2019