Saturday, April 13, 2013

Why Do Personal Injury Lawyers Have Bad Suits and TV Ads?



The title of this blog entry reflects a stereotype of personal injury lawyers in the USA: They have late-night TV ads for their services (“Get what you deserve!”), they wear ill-fitting suits, and their status is a few steps below that of lawyers in specialties like criminal law and the various kinds of corporate law. Personal injury law is in fact important: it helps individuals recover damages from accidents that are not covered by insurance, or when insurance firms resist paying out. It also helps individuals recover damages resulting from product defects. Personal injury law is one reason why firms will check whether the toys they manufacture are nontoxic and cannot lead to choking, before putting them in a store for you to buy for your child. 

Having said that, there is some truth to the stereotype. Personal injury law is a low-status specialization, just a few notches higher than family law, the lowest-status of all legal specializations. And they are guilty of bad TV ads and suits.

Lawyers are status-conscious, so the low status of personal injury law, and indeed any personal (rather than corporate) area of law, cuts into recruitment for that specialization. Personal injury law is especially blighted because some high-status law corporate firms that do have family law practices on the side do not have personal injury practices. Why is that?  An article by Damon Phillips, Catherine Turco and Ezra Zuckerman in American Journal of Sociology has an explanation that also tells us a lot about markets in general.
 
Phillips, Turco, and Zuckerman noted that there were many explanations that did not make sense. Status alone was not an explanation, because these firms entered the lowest specialization of family law, but personal injury law was higher. Nor was it a worry that personal injury law somehow would involve them into low-ethics practices (it does not, in general) or that they lacked capabilities for it. Instead, their interviews with corporate clients of top law firms and lawyers delivered a simple and strong message. Their corporate clients viewed participation in personal injury as treason. Personal injury law means that the firm has crossed over to the other side, and is now willing to sue corporations on behalf of individuals. For the general council of a corporation, that is worrying enough that they stated their willingness to dropping their law firm just for adding a personal injury practice. Corporations demand loyalty from their law firms and are willing to shop around to get it.

Clearly this means that we cannot expect that a personal injury will get the best possible legal representation. That will be found on the other side of the courtroom, defending the corporation. More broadly, firms can make demands of loyalty from other firms that shape their business and organization. These in turn shape markets. For example, in markets with battling giants, like automobile companies, suppliers have to choose sides if the giants demand loyalty. When lobbyist firms and industry associations need research to justify their views, they will go to research providers that do not work with the other side. Loyalty demands have potentially far-reaching consequences.
OK, we are at the end of this blog entry. Are you still wondering whether the “bad suits” in the title was an intended pun? Yes, it was. Thank you for noticing.

4 comments:

  1. Thanks for this interesting Saturday morning read Henrich! You mention that "Personal injury law is one reason why firms will check whether the toys they manufacture are nontoxic and cannot lead to choking, before putting them in a store for you to buy for your child." Isn't that also covered by class action lawyers? And I don't know much about the data on this, but it seems that class action lawyers are not as low-status as the personal injury lawyers. Am I right or wrong here? And how would it square with the theory that you briefly introduced us to? Thanks! Interesting read.

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  2. Hi Amine: I admit to some ignorance on the details here, but the article mentions product-liability lawsuits (which can be class actions) as something that personal injury law firms do. I think what happens is that product-liability lawsuits that damage a class of individuals can get wrapped into a class-action law suit. Doing that takes some special training, but whether it is a sub-specialty of personal injury law or a law specialization in itself is beyond me to answer. Preparing the case for damage and liability would be similar in a class-action law suit for personal injury. But, I am on thin ice here. . . In any case, class-action law suits against corporations is definitely something a top law firm would stay away from, based on the same loyalty element. That would be consistent with their argument, because they are saying that family law is OK for corporate firms (despite being bottom of the barrel) but personal injury is not, because loyalty is more important than status.

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  3. Henrich, thank you for reading our paper and for this thoughtful post. Your answer to Amine is exactly on point with what we found. In addition to asking about personal injury, we asked corporate clients how they would respond if their outside counsel began doing plaintiffs’ side product liability work, of the sort we often see in class-action suits. Not surprisingly, this provoked strong responses about disloyalty from corporate clients. Definitions of loyalty and commitment were associated with the corporation's specific interests: So, when asked how they would respond if their outside counsel began doing plaintiffs’ side medical malpractice or product liability work, clients from the healthcare industry whose companies sell medical devices or pharmaceuticals to consumers were more likely to respond negatively than were those from the technology industry whose companies sell products to business end-users.

    In the paper, we also talk about two seeming exceptions that helped us develop a deeper understanding of these dynamics. First, we wanted to understand why a few corporate firms had been able “to get away with” (in the words of one respondent) representing plaintiffs in the tobacco litigation without provoking as many claims of disloyalty from other clients. The answer we consistently got was that by the time those firms took on such cases, other corporations no longer identified with the tobacco companies. As one respondent said, “It was the rare exception…Who wants to defend tobacco companies?” Secondly, there are high-profile “trial firms” that do handle both large-scale plaintiffs' and defense work. We asked corporate clients about these firms as well, and interviewed individuals at the trial firms themselves. The key thing that distinguishes these firms from those top corporate firms that are held to the loyalty standards our paper discusses, is that trial firms are not known for, nor do they make commitments to, maintaining long-term ongoing relationships with their corporate clients. Rather, they are hired guns brought on for expertise on a specific litigation matter. Consequently, corporations do not feel like the firm has made a commitment to them beyond the particular matter for which they are engaged, and, thus, tend not expect the firm to grant them any loyalty beyond that matter. (Indeed, their ability to see both sides of a matter is seen to make them more capable in handling the specific litigation matter for the company).

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