Over at The Chronicle, there’s a report on a new study, published in the journal Psychology, Public Policy, and Law, that purports to show that lawyers consistently over-estimate their chances of succeeding in litigation. [The original paper can be viewed and dowloaded here]. From the abstract:
Lawyers’ litigation forecasts play an integral role in the justice system. In the course of
litigation, lawyers constantly make strategic decisions and/or advise their clients on the
basis of their perceptions and predictions of case outcomes. The study investigated the
realism in predictions by a sample of attorneys (n = 481) across the United States who
specified a minimum goal to achieve in a case set for trial. They estimated their chances
of meeting this goal by providing a confidence estimate. After the cases were resolved,
case outcomes were compared with the predictions. Overall, lawyers were overconfident
in their predictions, and calibration did not increase with years of legal experience.
Female lawyers were slightly better calibrated than their male counterparts and showed
evidence of less overconfidence. In an attempt to reduce overconfidence, some lawyers
were asked to generate reasons why they might not achieve their stated goals. This
manipulation did not improve calibration.
It’s not all that surprising, unfortunately, and squares with my experience (though it’s interesting to see it confirmed empirically) — I’m constantly amazed, given the obvious fact that half of all litigants are holding losing hands, at how easily most lawyers can persuade themselves of the rightness of their client’s cause.
[Thanks to Thomas Bartlett for the pointer]
Steven Lubet says:
Given that about 98% of all cases settle, it makes sense that the 2% that go to trial would be the ones in which a lawyer is overconfident.
June 7, 2010, 7:35 pmEH says:
Dunning-Kruger Effect
June 7, 2010, 7:36 pmSteve says:
There is quite a bit of social pressure to come up with good news. Even business clients, who you’d think would just want to make a business decision about the costs and benefits of litigation, often get emotionally invested in their disputes and want someone to tell them that they’re in the right. Even insurance companies can be skeptical of negative evaluations, particularly where the insured isn’t exactly pressuring them to settle, because a bunch of quick settlements can make their numbers look bad.
I find that a helpful tool for avoiding unwarranted optimism is to perform a mathematical analysis that breaks the case down into possible outcomes. For example, you assign a percentage to the chance that you’ll win on a motion to dismiss, in which case you lose nothing but a small amount of legal fees. You assign a percentage to the chance that you’ll win on summary judgment, in which case you lose a larger amount of legal fees. You assign percentages to the various possible trial outcomes (if you’re found liable, maybe the plaintiff gets everything he asked for, or maybe he gets a compromise verdict of 50%, or maybe he gets nominal damages). And then you just crunch the numbers, the idea being that if you could litigate this same case a million times, the resulting number is your average outcome.
The numbers and percentages you come up with are totally ad hoc, so you might think this method wouldn’t be any more probative than the traditional wild-assed-guess approach. But breaking the case down into component parts does tend to make people focus on the merits in a more rigorous manner. It makes you fully account for the fact that you’re going to be paying litigation costs no matter what. And it makes you realize that, even if you instinctively feel like you have a pretty good case, your client needs to completely prevail a fairly large percentage of the time for your initial, off-the-cuff settlement number to be accurate.
June 7, 2010, 7:41 pmGuy says:
Shouldn’t we expect a bias in favor of overconfidence, even without resorting to psychology? When the lawyer underestimates his chance of success, that will tend to lead him or her not to pursue that strategy, instead taking another strategy, but when the chance of success is overestimated, it will tend to cause the lawyer to take that strategy erroneously.
In other words, even if overestimations and underestimations are equally likely, we should generally expect lawyers to take strategies in which they overestimate their chance of success, and we should expect cases where the lawyers underestimated their chances of success should be relatively rare.
June 7, 2010, 7:48 pmDunstan says:
Steve:
I think this is absolutely correct. Lawyers who give pessimistic (read: accurate) assessments of the likelihood of success risk being fired and replaced by another lawyer who “believes in the case” and is “willing to fight.”
June 7, 2010, 7:49 pmSoronel Haetir says:
Doesn’t this apply equally to pretty much everyone? I thought there was a great deal of research showing that people are overconfident about goals.
Computer programming is a classic area for such overconfidence. Double the predicted time and the project will still be late.
The problem is so pervasive that when any project, regardless of type or complexity, comes in on time and under budget it is an object of praise and wonder rather than expectation.
June 7, 2010, 8:14 pmneurodoc says:
Litigation is a classic zero-sum game, is it not, one side winning and the other losing, that is if it is not a less than zero-sum game when litigation costs are taken into account, unless the loser winds up paying the winner’s costs? So, there can’t be “overconfidence” all around, can there? And though one loses at trial, the result might still be a better one than what the other side’s best settlement offer was. That 98% figure, if correct and not somehow misleading, would suggest that there isn’t a great excess of “overconfidence,” wouldn’t it? And how certain can one be of the outcome in all cases, the question being how wide those confidence intervals.
June 7, 2010, 8:28 pmRPT says:
On the other hand, those who give overly optimistic estimates run the risk of not getting paid when things don’t work out as well as projected. It’s much better to be fired while current on your billings than to go on in the unrealistic fog of litigation and be left hanging at the end.
June 7, 2010, 8:31 pmBrett Bellmore says:
It’s a negative sum game for the plaintiffs and defendants, but it’s a positive sum game for the lawyers.
June 7, 2010, 8:37 pmApperception says:
Damn it, first comment posts the first thought I had!
Yeah, that’s exactly it.
June 7, 2010, 8:52 pmAnonymous says:
Agreed. I believe the point is that there is a significant self-selection bias inherent in the survey. The cases in which the attorney on the losing side is not overconfident are the cases that settle (among others). Put another way, if your attorney is telling you that you have a losing case, you are less likely to insist on going to trial.
June 7, 2010, 9:20 pmJoeBlow1078 says:
I’ll go a step further and say that lawyers that convince themselves to believe in their clients make better advocates, even if they make worse counselors.
June 7, 2010, 9:27 pmfrankcross says:
Check the paper, a majority of the cases they studied resulted in settlements, did not go to trial.
June 7, 2010, 9:28 pmAnderson says:
I like to think that having clerked for a judge makes me more objective, but it’s probably just my innate pessimism.
I tend to play the bad cop to my boss, who’s the optimist (and the one who deals directly with clients more often).
But since we do a great deal of administrative law, we tend to be realistic advising the clients about appeals. “Betting against the house” is my favorite metaphor.
June 7, 2010, 9:36 pmShelbyC says:
Parkinson’s Law
June 7, 2010, 9:39 pmRoger says:
Another reason for overconfidence is that lawyers may know the arguments in favor of their client much better than the arguments against. He may know the surprise witness in favor of his client, but not know his opponents surprise witness.
June 7, 2010, 9:41 pmOctavian says:
A litigator should always under-promise and over-deliver.
June 7, 2010, 9:48 pmGuest101 says:
Having worked as a Biglaw litigator for several years, I’m consistently amazed at the ability of smart lawyers to genuinely persuade themselves of the overwhelming strength of their position. My persistent inability to do this was one of the eariest signs that I should look for another profession.
June 7, 2010, 9:59 pmSaul says:
Any break-out by legal discipline? Specifically, any difference for prosecutors and/or criminal defense vs. other attorneys? What about a difference between appellate practice and trial practice?
June 7, 2010, 10:04 pmrpt says:
Amen.
June 7, 2010, 10:08 pmJohn D says:
This post reminded me of a joke:
A farmer goes to see his lawyer about a property dispute with a neighbor. The farmer explains the whole issue and the lawyer says, “you have an excellent case. When do you want to get started?”
“Never,” says the farmer, getting up from the chair, “I told you his side.”
June 7, 2010, 10:58 pmNI says:
To be fair, just because you lose doesn’t mean you had a bad case. Sometimes a good case is lost because the judge is an idiot or the jurors weren’t paying attention. There’s a long list of things that can go wrong in a trial that have nothing to do with the merits of the case. It’s the legal equivalent of the Detroit Tigers perfect game that wasn’t that’s been in the news the past few days.
And frankly, nobody wins lawsuits except lawyers. I used to do commercial litigation; most of the time from a pure business standpoint my clients would have been better off to just walk away, even when they were in the right.
June 7, 2010, 11:01 pmPersonFromPorlock says:
Once more, I offer my simple suggestion: losing lawyer, not client, pays all costs of litigation.
The problem with conventional ‘loser pays’ is that there’s nothing to keep a lawyer from pursuing a weak case just to extract fees from his client. But if he knows that he’s likely to have to eat the costs the case incurs… well. And after all, who’s better placed to know if his side’s a loser? The client?
This policy would also serve very nicely to suppress false optimism.
June 7, 2010, 11:20 pmNI says:
So, a doctor whose patient dies (not from malpractice but from an unfortunate result despite the doctor’s best efforts) doesn’t get paid either?
June 7, 2010, 11:39 pmMark Field says:
Assuming there’s some way to define “losing”, one lawyer must lose every case. Such a rule makes no sense in a zero sum game.
June 7, 2010, 11:49 pmRoger McCandypants says:
I’d be willing to more than double my fee to take that risk. The problem is that judges are weak and won’t award fees that high.
June 8, 2010, 12:08 amJewish Marksman says:
The study broke things down by civil versus criminal, but it would be more interesting to see contingency cases vs. hourly billing.
Lawyers who do only contingency cases have to learn to muck weak hands, whereas an hourly biller is always playing the game with OPM, and may as well drive the car until it runs out of gas.
June 8, 2010, 12:18 amApperception says:
“The study investigated the
June 8, 2010, 12:20 amrealism in predictions by a sample of attorneys (n = 481) across the United States who
specified a minimum goal to achieve in a case set for trial.”
Garrison Keillor says:
Lake Wobegon… where all the children are above average.
Lake Athletics… where all the athletes win more than 50% of their games.
Lake Lawyers… where all the lawyers win more than 50% of their cases.
June 8, 2010, 12:57 amDoc Merlin says:
Its a positive sum game for the lawyers, their confidence estimates are a rational way to trick themselves into taking highrisk/high reward clients.
June 8, 2010, 1:36 amblender says:
litigators aren’t known for their humility
June 8, 2010, 4:04 amMike S. says:
I don’t think this is limited to lawyers, but probably applies to most professions. if you look historically what football general managers will pay to trade up in the draft, they overpay more often than not (these are almost always draft picks for draft pick trades, so one can assess the historical value of the picks on both sides.) I assume it is because the GM’s are overconfident in their ability to pick players.
June 8, 2010, 7:23 ampublic_defender says:
Practicing law for a few years have given me a new respect for the uncertainty of practicing medicine. Often times, it’s clear how a case will come out if litigated to the finish. But other times you really can’t know. Judges are human beings exercising human judgment, and all-too-often you can only take educated guesses. In cases like that, I tell my clients the potential risks and benefits of each potential action, give them my best (or least bad) advice, and let them make the call.
June 8, 2010, 7:50 amAnderson says:
nobody wins lawsuits except lawyers
I keep a Voltaire quote beside my desk: “I was only ruined twice — once when I lost a lawsuit, and the other time, when I won a lawsuit.”
June 8, 2010, 8:32 amSnaphappy says:
The only cases I ever lose are those in which the Judges are biased against my client and those with gullible juries. There is no other explanation.
June 8, 2010, 8:36 amTexas Lawyer says:
I think there are — at least — two reasons for this.
First, a lawyer gets emotionally invested in his cases. That’s inherent in the adversarial system, I think. You start to internalize the client’s problems as your own. After I’ve been handling a case a while, I reflexively talk about my client as “us,” saying things like, this is what the other side did to us, even though it was only done to the client. When you make the client’s cause your own, I think it’s human nature to err on the side of optimism.
Second, as mentioned earlier, lawyers are punished by clients for telling the truth. Clients want lawyers who “believe in” their case. I dealt with that a few years ago. A client I was defending in a commercial case had basically no defense. I told him we should try to settle on the best terms we could get. He asked me to prepare a memo on the pros and cons of his case, which I did. He was unhappy with what I told him and–quite angrily–accused me of not following his directions by not including any pros. He said I only gave the cons. I tried to tell him that there were no pros to include. He could not accept that. After I was fired, the jury agreed with my assessment and hammered him.
June 8, 2010, 8:51 amsardonic_sob says:
To expand on prior comments, it’s a violation of the Kenny Rogers Analytic Maxim* to say that half of all litigators have losing cases, even though for cases which are completely litigated it’s literally the truth. For many reasons already pointed out, but mainly because of incomplete knowledge, it’s perfectly reasonable for both sides to go into a case, let alone do their pre-litigation client analysis, and think they’ve got a winner. I’m not sure this study actually teaches us anything valuable that we didn’t already know.
I am primarily a defensive-type lawyer in that mostly I try to keep us out of trouble as opposed to looking for fights (I am the GC for a not particularly aggressive manufacturing company) and my analysis always starts out with, “Here’s the best we can hope for. It involves a lot of money, a lot of time, and a lot of distractions. If it all works out great, we might get back the money and then some, but we won’t get back the time nor the distractions. Do you want me to go on?” Usually the answer is no, but then I am blessed with intelligent and reasonable clients. When the answer is yes, it’s always because we have a good case.
“*Every hand’s a winner, and every hand’s a loser.”
June 8, 2010, 9:04 amPersonFromPorlock says:
Lawyers who lose go back to wills and conveyancing to keep the doors open. It’s the lawyers’ income from other legal work that makes it a non-zero-sum game. That the lawyer who does nothing except litigate without winning is quickly out of the game is a feature, not a bug.
June 8, 2010, 9:11 amfrankcross says:
Apperception, read the whole article. Set for trial did not mean tried.
June 8, 2010, 9:20 aminterested says:
As a personal injury lawyer: you have to be extremely cautious in delivering bad news to clients. It’s the way you say it- and when you say it. If they want more than the case is worth, you often have to wait until the end to really drop the bad-news hammer on them.
And if they still don’t want to listen, you get them to sign something saying they were informed of the weakness of the case and chose to ignore your advice (this will defeat later bar complaints- the disciplinary authorities just love to start expensive investigations of personal injury lawyers).
It’s not just about meeting with the other lawyer and/or the judge, and agreeing on the value and closing the file. You’ve got to manage the expectations of your clients.
The same goes on the defense side- my friends across the aisle often have a client who resists paying the full value of the case.
June 8, 2010, 9:37 amJust Dropping By says:
I’m constantly amazed, given the obvious fact that half of all litigants are holding losing hands, at how easily most lawyers can persuade themselves of the rightness of their client’s cause.
Most commercial litigation, in my experience, isn’t zero-sum (there are typically several claims and counterclaims and both parties might win some claims and lose others), so it’s not an “obvious fact that half of all litigants are holding losing hands” in those cases.
June 8, 2010, 9:47 amKenB says:
If you tell your client he has a bad case, he is more likely to conclude he has a bad lawyer. I have personal experience with that phenomenon. After a few hard knocks, I still never intentionally misled a client about my opinions, but neither did I overemphasize bad news.
June 8, 2010, 9:53 amIsabel1130 says:
Maybe the solution is to go to a more British like system where we seperate the litigation and the litigators from the legal advice portion of the equation. Solicitors would never go to trial for you so they would have no vested interest is telling you to sue. If you decided to go ahead anyway after getting advice from your solicitor, the case would be handed over to a barrister to litigate. I think lawyers generally suffer from the same kind of emotional confirmation bias that all others do. When I was in law school and would hear oral arguments and the law students would cite a case as support for their position I was often left scratching my head because I had read the case and not found anything in it to support the argument they were making.
June 8, 2010, 9:54 amMark Field says:
Sorry, but it doesn’t work that way. Nobody has a client base which will support that. The days of being a generalist are long past. Lawyers are litigators OR estate planners OR transactional lawyers, not all three.
In addition, your proposal would insert improper self-protective motivations between lawyer and client, undermining the client’s interests.
June 8, 2010, 10:05 amDJR says:
One of the most difficult things to measure is the inherent randomness of litigation. I have had the distinct displeasure of being adverse to law firms with terrible cases, whose lawyers were more full of bombast than substance, who flouted the court’s rules at every opportunity and were generally miserable to work with, yet who scored improbable victory after improbable victory. Those victories undoubtedly colored the lawyers’ view of how successful they would be in the future, while the lawyers on the other side would tend to discount the odds of what appears to be a fluke result.
June 8, 2010, 10:06 amShelbyC says:
Er, still zero sum, right?
June 8, 2010, 10:20 amKevinM says:
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it”
June 8, 2010, 10:24 amUpton Sinclair.
To be sure, much of this effect results from lawyerly egos. But it also results from external commercial pressure (clients hire lawyers who tell them their case is fabulous) and internal institutional pressure (naysayers who “don’t believe in the case” are discouraged).
ShelbyC says:
Maybe I’m misunderstanding, but it seems that they only studied only studied cases that they actually took. Wouldn’t we expect lawyers to be overconfident wrt cases that they take? If we assume lawyer’s estimates are correct on average, but with some error, and we measure the cases they try, we would expect to get high estimates for those cases, and low estimates for some of the ones they reject.
June 8, 2010, 10:34 amSeaDrive says:
There is a similar situation when many firms bid for the same thing, e.g. oil rights auctions. Chances are that the firm that has the highest estimate for the value of the property has made a mistake. By definition, their valuation is an outlier. Chances are that in cases that go to trial, one of the lawyers has made a mistake.
I’ve also read that doctors are over-optimistic on average when estimating how long a terminal patient might live.
June 8, 2010, 10:36 amDavid M. Nieporent says:
Still zero-sum. If I win my claim (or claims) totaling $500K and lose $200K on my opponent’s counterclaims, that’s still $300K for me and -$300K for my opponent.
June 8, 2010, 10:38 amDJR says:
No, not really. If you spend $200K to litigate the matter and your opponent spends $200K too, then it’s +100K for you and -$500K for the opponent. Litigation is a negative sum game for the litigants.
June 8, 2010, 10:46 amDavid M. Nieporent says:
Sorry, but that still doesn’t make any sense. First, “wills and conveyancing” and litigating are not interchangeable; lawyers don’t shift back and forth between specialties, any more than doctors shift back and forth between heart surgery, psychiatry, and orthopedics. Second, that still makes litigating a zero-sum game, and doesn’t make any sense.
Alternatively, litigators could respond by doubling their rates for handling matters, in which case the clients would pay anyway.
June 8, 2010, 10:57 amDavid M. Nieporent says:
Yes, that’s a separate point already covered above, and not relevant to the claim I was addressing.
June 8, 2010, 10:58 amPubliusFL says:
I wonder about the effect of sampling bias here. First, some attorneys in the initial sample pool were excluded because they were unwilling to specify a minimum goal or their confidence in it. Mightn’t these attorneys be disproportionately underconfident? Second, the limitation to cases set for trial would also seem to disproportionately exclude underconfident lawyers: either plaintiffs’ counsel who decide not to file complaints in cases that they could have won, or defense counsel who settle too quickly, before a trial date is set.
June 8, 2010, 11:01 aminterested says:
Perhaps it’s you who was wrong about these “terrible cases” that produced “improbable” victories for your opponent?
June 8, 2010, 11:02 amAlast says:
“Some people believe with great fervor preposterous things that just happen to coincide with their self-interest.” Judge Frank Easterbrook
June 8, 2010, 11:04 amDavid M. Nieporent says:
That would only apply to plaintiff’s lawyers. Defense lawyers don’t reject cases just because their clients have no case.
June 8, 2010, 11:07 amShelbyC says:
Fair ’nuff. Still skews the results though.
June 8, 2010, 11:10 amJust Dropping By says:
Looking at Merriam-Webster’s definition of “zero-sum,” I see you are right about the term’s meaning:
http://www.merriam-webster.com/netdict/zero-sum
I should have instead written that litigation isn’t “winner take all,” as the OP appears to assume when he says that it is an “obvious fact that half of all litigants are holding losing hands.” If Plaintiff has a valid claim and Defendant has a valid counterclaim, then simultaneously both and neither of the litigants is “holding losing hands.” And this is before you even factor in possible benefits of insurance coverage, fee-shifting provisions/statutes, cross-claims, indemnification/contribution, etc.
I’m aware of a number of cases in which parties technically “lost” on their claims at trial, but actually got very good results – e.g., plaintiffs bring a class action seeking up to $52 million, refuse settlement offer of $2.1 million, go to trial, win less than $5,000 in damages (the judge found that while the class representatives had proven that they were injured, they failed to prove any damages for the absent class members). Who was “holding losing hands” in that case? The defendant “lost” the case in the sense that a judgment was entered against it, but the class members were obviously worse off than if the class counsel had taken the settlement.
June 8, 2010, 11:18 amDavid Newton says:
Not a relevant point. “It’s not fair, it’s legal.” That was a quote that my law lecturer said quite a few times. The rightness of a person’s cause very often has nothing to do with the strength of their case. Think about how many times the police know who committed a crime but they cannot prove it (and I do not mean police who are corrupt/lazy and think the usual suspect did it without proper suspicion). Think about how many times a big corporate lawyer has run roughshod over the case of an opponent who had right on their side but did not prepare their case correctly for whatever reason. Think of how many times cases get dismissed on technicalities. There is a lawyer in the UK with the nickname of Mr Loophole because of how many rich clients he gets off speeding or parking tickets by technicalities.
I would also point out that the 50:50 split you have talked about it not necessarily true. Consider that multi-party lawsuits perturb that split and that class-action lawsuits demolish it. In class-action lawsuits there are many cases where 99.99% of the litigants win and 0.001% lose if the class wins the lawsuit.
June 8, 2010, 11:23 amObserver says:
I’m a corporate lawyer. I couldn’t find a courthouse with a map, a compass and a flashlight.
As a very young lawyer, fresh out of law school, I assisted a litigation partner whose name everyone here would immediately recognize. In a meeting with a client, the client’s general counsel asked a straightforward question that had a clear answer. So I gave him the answer.
The litigation partner took me out of the room and told me, in no uncertain terms, never to do that in a litigation matter. Litigation was just too uncertain.
Then he told me, “It’s a delicate balance. You have to give the client enough hope to keep him litigating, but enough gloom that he’ll think you’re a genius if you win and won’t blame you if you lose.”
June 8, 2010, 11:48 amDuffy Pratt says:
I have a hard time understanding why this is news.
The vast majority of new businesses fail within the first few years. I’m sure that most people go into those businesses with great hopes of success.
I worked in Hollywood for a few years. Basically everyone thinks that the movie they are making will be good, and stands a good chance of success. Most movies are terrible. And there is a tremendous weeding out process before a movie ever starts to go into production.
Ask sports teams, or their fans, how successful the teams will be at the beginning of the season. Then compare it to how they end up.
This kind of overconfidence is rampant. Not only that, but I suspect that it is one of the great engines of the capitalist system.
June 8, 2010, 11:59 amNickM says:
Well, somebody has never had a client lie to him.
Nick
June 8, 2010, 12:11 pmDavid M. Nieporent says:
Yes; I was going to comment on that as well. In theory, the lawyer can evaluate the case better because the lawyer knows the law and the facts. In reality, when the client tells you he never agreed to X, 10-to-1 there’s an email somewhere where he said “Ok” to X.
June 8, 2010, 1:55 pmohwilleke says:
One of the interesting buried conclusions is that criminal lawyers are more accurate predictors of outcomes than civil lawyers. There was not a statistically significant difference between the predictions of criminal lawyers and the actual outcomes. There was a strong tendency of the most confident civil lawyers to underperform and the least confident lawyers to overperform.
One plausible explanation is that experience really does matter, but that few lawyers in civil cases have enough experience to make a difference.
When I worked in a busy insurance defense firm with a half a dozen litigators, we to trial only a few times a year. In contrast, a typical prosecutor or public defender will go to trial dozens of times a year. Even a criminal lawyer with just a couple of years experience has probably handled more trials than a civil litigator will in an entire career.
Notably, the sample does not appear to include any samples of low dollar value, high volume litigation tasks, like collections cases, foreclosures and evictions, where non-criminal litigators tend to have more experience.
It would also be interesting to see if judges and mediators who have much more exposure to the tail end of cases are more accurate predictors.
If the “experience does matter” theory is correct, then a system of barristers and solicitors might very well increase prediction accuracy in lawyers. But, since the profession is already much more bifurcated between litigators and non-litigators than formal statistics would suggest, I doubt it. The vast majority of litigators of all types are primarily litigators.
* * * *
Another point is that overconfidence may not be such a bad thing, particularly for a civil litigator. Lawyers don’t get bonus points for accuracy, they are rewarded for producing good results. Conveying confidence may influence the outcome in settlement negotiations, mediations, and trials. It may also help a client win business, and there is no indication that overconfidence routine produces a less favorable result. But, confidence may be more convincing if you believe it yourself.
Overpromising isn’t bad if the actual result that you deliver is better than the less confident person’s result.
* * * *
Third, it is worth recalling that settlement decisions are made by clients, albeit with a lawyer’s advice. In my experience, both plaintiffs and defendants in civil litigation are highly risk adverse. Litigation itself is usually a significant burden for each side, and a full fledged loss can be much worse for the client than a full fledged win is valuable.
Lawyers when asked about probabilities generally describe the likelihood that a goal can be achieved, and don’t factor into that decision client unwillingness to roll the dice. If clients are systematically more risk adverse than lawyers and are more prone to settle as a result, then the lawyers will be systemically wrong.
June 8, 2010, 5:53 pmohwilleke says:
Agreed. Indeed, at some point representing a client when you are not confident in that client’s case in a civil matter or as a prosecutor is a violation of professional ethics. (Criminal defense lawyers are held to a more lenient standard.)
June 8, 2010, 5:56 pmohwilleke says:
Defense lawyers whose clients have no case settle as fast as they can after putting the plaintiff’s lawyers through the paces to give the plaintiff’s lawyers an opportunity to screw up.
June 8, 2010, 5:59 pmohwilleke says:
As measured in this study, where each lawyer sets a minimum goal for a case, it may be technically zero sum, but isn’t incapable of being win-win.
If the Plaintiff’s goal is win $200,000 or more, and the Defendant’s goal is lose $300,000 or less, both can achieve their goals and both lawyers could be winers by the terms of this study.
The fact that litigation is zero sum and has a winner and a loser doesn’t in theory have anything to do with the likelihood that lawyers will meet or fail to meet their goals for a case.
The criminal side is an example of that fact. Defendants are acquitted in about 10% of cases that go to trial, and about 10% of cases go to trial. So the acquittal rate is about 1%. But, that doesn’t mean that defense counsel can’t get better or worse results for a client. It just means that the goals have to be tailored to the realm of the possible.
June 8, 2010, 6:06 pmneurodoc says:
Was the highest bidder “mistaken” if in the end they don’t make as much money as they had hoped to, or as much or more than the lower bidders wanted in return for what risk they would be taking on? Or are they only “mistaken” if they actually lose money or realize less than what they would have accepted as a return on their investment if they had known going into the investment?
June 8, 2010, 6:07 pmohwilleke says:
Empirically, divorce lawyers are most often grieved, and serious discipline most often results from a misappropriation of trust fund monies.
Overpromising results or inaccurate professional judgment almost never results in disciplinary action, and when it does, more often results in a very minimal sanction.
June 8, 2010, 6:10 pmneurodoc says:
Saying someone is a defense lawyer does not, of course, make clear whether they represent defendants in criminal or civil cases. Saying someone is a plaintiff’s lawyer, of course, pegs them as represent plaintiffs in civil cases, but does it say how they are paid for their efforts? It seems to me that plaintiff’s lawyers are generally assumed to be paid on a contingency fee basis, though many clients are paying on an hourly or flat fee basis no matter the outcome. If someone has the money to pay and wants a plaintiff’s lawyer to sue on their behalf, then there is little more reason for that lawyer to reject the case than for a defense lawyer to do so, save for when the case is so clearly lacking in merit that the lawyer would be risking sanctions were he/she to file it. (Everyone deserves a defense, whether in criminal civil cases, right? So, no problem for a defense lawyer to represent a client whose case he/she thinks very little of. If the defendant could not find counsel to represent them, then what would they do, throw themselves on the mercy of the plaintiff and open their wallet?)
Why since when a case goes to trial there are lawyers representing plaintiffs and defendants, why is it that only the former who are usually referred to as “trial lawyers”? All those “tort reformers” who rail against “trial lawyers” certainly don’t have defense counsel in mind, do they?
June 8, 2010, 6:27 pmDavid M. Nieporent says:
Generally, no. They call themselves trial lawyers. See, e.g., ATLA, which is open only to plaintiff’s lawyers and criminal defense lawyers. (ATLA renamed itself AAJ a year or so ago to escape the bad PR associated with the phrase “trial lawyer,” but many of the state affiliates still call themselves State TLA.)
June 8, 2010, 6:53 pmGWBush says:
David M. Nieporent:
Generally, no. They call themselves trial lawyers. See, e.g., ATLA, which is open only to plaintiff’s lawyers and criminal defense lawyers.
Surely you can’t suggest that is the reason. Among other things , the ATLA explanation contradicts the point, as criminal defense lawyers are not “plaintiff’s lawyers,” they are defense lawyers. Tort reformers and business lobby have turned “trial lawyer” into a bad name that refers only to the plaintiffs’ bar, perhaps because plaintiffs’ lawyers are at least perceived as, if not in fact, more willing to actually go to trial. I have always been puzzled by the notion that defense lawyers would be in favor of tort reform that would potentially put themselves out of business. Maybe if tort reform is successful, they can become deal lawyers for their litigation immune corporate clients
June 8, 2010, 9:54 pmneurodoc says:
Have you never considered disingenuity as at least a partial explanation for defense lawyers speaking up in favor of tort reform. Their clients may expect it of them and they know their voices aren’t going to make much of a difference.
There were stories, quite credible I believe, of defense counsel in asbestos cases trying to get plaintiff’s counsel to let the defense side run the meter for more billable hours before they brought it all to a conclusion. Don’t know how it could possibly serve the interests of anyone other than defense counsel to let the meter go on running a minute more than necessary. But those stories couldn’t possibly be true, could they, since we all know, don’t we, that all the dubious conduct, if not outright misconduct and dishonesty, is over on the plaintiff’s side. Who, for example, has ever encountered a expert whoring for a defendant?
June 8, 2010, 10:37 pmI’m Shocked, Shocked! « The American Catholic says:
[...] Hattip to the Volokh Conspiracy. [...]
June 8, 2010, 10:49 pmneurodoc says:
It isn’t necessary for disciplinary action to follow. Being investigated is wearying and unpleasant enough all by itself. So, one has good reason to avoid doing anything that might prompt a disappointed client to file a grievance, no matter how lacking in merit that grievance might be. There are no sanctions against clients who file complaints without merit, and in many places it is next to impossible, if not outright impossible, for an attorney to strike back with a libel lawsuit.
Even though the client may have no case and it may be clear that the plaintiff’s lawyers are not going to screw up, the defense may still refuse to concede until trial is drawing near. Med mal cases, for example, can be very expensive undertakings for plaintiff’s counsel and the defense with the deep pockets of insurance carriers behind them may seek to wear the other side down so they will settle for less and to send the message that no one should think it easy to prevail in these cases, especially when the same carrier writes most of the policies in a state, as they often do.
June 8, 2010, 10:50 pmAnatid says:
Fun psychological finding:
People suffering from depression tend to predict outcomes for the future more realistically than people who are not depressed, who have unrealistically high expectations for the future. We call this effect “hope” or “optimism” and it’s part of being a healthy human being.
The study does not suggest that they controlled for this basic human tendency.
June 9, 2010, 4:39 pmEmir S says:
Ironically, the mechanism that balances the over-confidence bias and indeed causes 98% of cases to be settled is the litigation costs factor. Assuredly, we are all fond on a theoretical and nostalgic level of transaction cost theories of basic law&econ, but when the assumption of perfect and symmetrical information is replaced with one where each lawyer over-estimates his probability of success, a perfectly “lubricated” system leads to zero settlements and 100% of cases being litigated. Only when the cost of litigation (i.e. transaction cost) exceeds the differential caused by the imperfect information will a case be settled. Simple demonstration would be where Amy sues Bob for $100. Each of them believes they will win 70% of the time. Thus Amy has an expected outcome of $70, while Bob has an expected outcome of -$30. Thus, Bob will settle for 30$ + transaction (litigation) costs, while Amy will settle for $70. Traditionally, as the trial goes on (pre-trial motions, discovery etc), each side gets a clearer picture of the chances of success, but anticipated litigation costs decrease (obviously, if you expect a trial to cost you $100, and you go through half of it, you’d naturally expect the remainder to cost $50). So for a case to be settled in mid-late stage of litigation, A) the litigation costs must be top-heavy or B) early-mid stages of the trial must be critical to a lawyer’s full understanding of his and his opponent’s chances of success. Thus, litigation costs in fact are efficient (counter-intuitively), in that they enable an inherent human heuristic to be overcome. This in fact has bothered me throughout my classical econ and law&econ education. I’d be curious to hear what other law and economics professors/experts have to add to this topic, as it is relatively un-explored. Additionally, there are certain problems with the current system (litigation costs tend to be defense-heavy, and thus the heuristic gap between expected outcomes tends to be born more by the defendant than the plaintiff, for example) of alleviating the optimism bias.
Looking forward to lots of models! :)
June 10, 2010, 11:41 ambyomtov says:
neurodoc,
Med mal cases, for example, can be very expensive undertakings for plaintiff’s counsel and the defense with the deep pockets of insurance carriers behind them may seek to wear the other side down so they will settle for less and to send the message that no one should think it easy to prevail in these cases, especially when the same carrier writes most of the policies in a state, as they often do.
Indeed, and it is not just med mal. IANAL, but I have once or twice been inviolved in litigation, and have run into this sort of wearing down of the plaintiff despite the defense being meritless. Funny how we hear about frivolous plaintiffs, but never frivolous defendants.
June 10, 2010, 11:57 amRuling Imagination: Law and Creativity » Blog Archive » Losing $500 million was a legal win: outcomes and predictions from a lawyer’s point-of-view says:
[...] to establish that lawyers consistently overestimate the chances of success in their cases (pdf). David Post of the Volokh Conspiracy takes the study and applies the typical academic condescension to practitioners: “I’m constantly amazed, [...]
June 11, 2010, 9:40 amJune 14 roundup says:
[...] Study: Lawyers overestimate their chance of prevailing in litigation [Post, Volokh] [...]
June 14, 2010, 1:18 amviolet Petran says:
This is such an interesting study and as a female I am not surprised that they tend to be more realistic in their assessment of cases and outcomes. I blogged about it here and in the end i think that there needs to be a balance between optimism and realism….otherwise the lawyer may find himself in a malpractice action!
July 8, 2010, 3:22 pm