A Lawyer's Arithmetic

This article may seem like it's full of math. But it's important math.


Any good lawyer has a set of equations running in her head whenever she’s thinking about your case. Which is good: you are hiring a lawyer not just for her knowledge of the law, legal reasoning, and advocacy skills -- but also, for her ability to do basic cost-benefit analysis - without her (or your) emotions interfering.


For example, let’s say a company refuses to pay you on an invoice worth $50,000. The question as to whether it is worth bringing suit is essentially represented by this equation:

(outcome) > (expense)?

Essentially: Is it worth it? This may sound obvious, but notice that this equation does not include your “feelings,” or your outrage that “somebody has gotten away with something.”


Let’s flesh this equation out on both sides.

(outcome) > (expense)?

or

(amount of unpaid invoice + interest + court cost award + possible attorney fee award) * (strength of case) * (likelihood of company insolvency/bankruptcy) * (likelihood of defendants to hide assets) > (court filing fees) + (process server fees) + (asset search fees) + F(attorney fees)

where

F(attorneys fees) = (likelihood of defendants to hide assets) / (strength of case)

This math gets even more complicated in a trademark dispute, or economic warfare between two companies.


BUT, sometimes it's not all about the math. Emotions, for better or worse, can come into play. Take the real world example of the Aurora shooting victims’ lawsuit against the movie theater chain. They argued that the theater’s security flaws enabled the tragic shooting.


Facing a strong likelihood it would win, the chain offered the 41 plaintiffs the miniscule sum of $150,000 to be split amongst them, and an acknowledgement that the theater chain would take new security measures.


But Colorado law, which is similar to California law, meant that if the survivors rejected the deal and then lost their case, they would be responsible for the theater chain’s court fees: $700,000.


Every single survivor decided that the math required them to accept the deal - a case that was signaled as "weak" by the judge, plus a looming bill for costs, made accepting the settlement a logical (though maybe not satisfying) choice.


All except one, that is, who refused to accept the settlement. We can speculate that to her, the math didn’t matter, because she had already lost everything that mattered to her: “Her child was killed in the shooting, she was left paralyzed and the baby she was carrying had been lost.” To her, being liable for an extra $700,000 was nothing.


As predicted, four plaintiffs ended up staying in the lawsuit, and ended up losing. They now collectively are responsible for the $700,000 debt (whether the plaintiffs appeal and the costs get settled remains to be seen).

* * * * *

The math that a lawyer employs is just one of the tools she has in representing you, but it is usually the starting point for assessing what your legal position is, and ending point for deciding how to settle the dispute. It is the lawyer’s job to counsel you based on the practical realities of your situation, which may lead you to the best long term decision, rather than what feels right in the moment.

#Litigation #FirmThings #math

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