Checking In On The Plaintiffs’ Side

Episode Notes

Transcript

Above the Law – Thinking Like a Lawyer
Checking In On The Plaintiffs’ Side
05/28/2019

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Intro: Welcome to Thinking Like a Lawyer with your hosts Elie Mystal and Joe Patrice, talking about legal news and pop culture, all while thinking like a lawyer, here on Legal Talk Network.

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Joe Patrice: Hello. Welcome to another edition of Thinking Like a Lawyer. I am Joe Patrice from Above the Law. After a few weeks absence we are happy to welcome back my standard co-host Elie Mystal.

Elie Mystal: I am 41 now.

Joe Patrice: Okay. That’s great. We are excited to know this.

Elie Mystal: How old are you, Joe?

Joe Patrice: 28. So no, that’s exciting. So you are old and that’s cool, but you are making the best of it.

Elie Mystal: Look, I still have a full head of hair, a real full head of hair.

Joe Patrice: Yeah, no, well, although it’s gotten significantly grayer.

Elie Mystal: Yes. Well, you know, two kids will do that.

Joe Patrice: Yeah.

Elie Mystal: Two kids and Donald Trump will do that.

Joe Patrice: Yeah, it kind of has that, you have been weathered by the years in the Oval Office thing that happens to presidents, except I know what your day-to-day routine is and you have zero responsibility, so I don’t know what’s caused it.

Elie Mystal: It’s watching that television man, it’s hard.

Joe Patrice: Yeah.

Elie Mystal: No, I will tell you what’s caused it.

Joe Patrice: Okay, here we go.

Elie Mystal: It’s crap like this Washington Post story about Elizabeth Warren.

Joe Patrice: That is a dumb story, isn’t it?

Elie Mystal: So today when we are recording this, you will hear this next week, when we are recording this, Washington Post just released a feature investigative story about Elizabeth Warren determining that while she was a law professor she earned money.

Joe Patrice: Yeah. Her campaign released a list of the representations she undertook while being a law professor. She did some consulting.

Elie Mystal: Over 50 clients.

Joe Patrice: Yeah, over the many years she worked on 50 different cases or so, and she charged around 675 an hour, which the Washington Post seems to think is some sort of scandalous thing that deserves to be in a headline and those of us who have been around lawyers for a while are like yeah, that kind of seems about right.

Elie Mystal: It smacks of but your emails too, and so I think part of what’s happening is that I am overreacting a little bit, and I mean that like fairly, like I think I am overreacting a little bit, because I am so sensitive to the media’s coverage of Hillary Clinton during 2016, right?

So the media has this thing where — which I call faux balance, where they want to seem critical of both sides equally even though both sides are not equally criticizable. And in an attempt to show that faux balance, they will hit upon some non-issue and rise it up to the level as if it’s a real thing. So the Washington Post story makes me worried that they are doing that.

But even if I take that out of the equation, as you did in your piece about this, which you wrote about on Above the Law, even if I take that faux balance overreaction, kind of an allergic reaction to the mainstream media’s coverage of Hillary Clinton, even if I take that out, what I am left with is a dumb fucking nut of a story about how a law professor had clients and earned money. That was presented with no context about how other lawyers — as you said, it was $675, there was no context about what other lawyers charge for their representation, other high end lawyers charge, nor was there any context about how incredibly common it is for your law professor to take on clients, especially if they are a law professor at a major university like Harvard.

People forget, and I will just let you talk in a second, Joe.

Joe Patrice: No, no.

Elie Mystal: But people forget that like, especially if you are a professor at a school like Harvard or Yale, Columbia, one of these, you are a professor there because you — this is your life, this field of law is your passion, and yes, you want to write about it, yes, you want to teach about it, but you also want to take clients about it, because it keeps you in the game.

So it’s completely normal for a law professor to take on clients, and this story would never have been written about a male presidential candidate who has taken on a lot of clients, and I can prove that because you all don’t even know how much Alan Dershowitz charges for his representations.

Joe Patrice: And that’s it, that’s actually a good point there. Alan Dershowitz is obviously a good example of another Harvard professor who takes on cases; his tend to be getting folks who are with underage prostitutes out of trouble, but the point remains that, yeah, they take on these jobs.

I really felt like the real issue here, and we have seen this from other media outlets, was this whole 675 an hour, that’s so crazy, and it kind of stokes this anti-professionalism biases and mentality out there, and it’s unfortunate that the people who wrote it didn’t bother to talk to anyone in the legal profession and find out that that’s not actually crazy.

(00:05:04)

Elie Mystal: How do they do that? How does the Washington Post — I will accept that shit from Breitbart, but how does the Washington Post write an entire 2,000 word article and not talk to a single other lawyer?

Joe Patrice: Yeah, I mean that was problematic. And, you know, you say Breitbart, but this is more of a New York Post jam. When Barbara Jones, who was working on the Cohen case, famously turned in a bill for 40 some odd thousand dollars for reviewing tens of thousands and thousands of documents over the course of a month, the New York Post wrote an article talking about how ridiculous it was, how high her rate was, and it was also relatively in line with a lawyer of that ilk, doing that level of job, under that kind of deadline. And that’s what’s happening here and it’s really unfortunate I think.

Now, you can say what you want about the legal profession should be cheaper and allow for more access to justice, yada, yada, yada, but that’s not what’s going on here. This article is about we should bash lawyers for charging so much money and it’s really unfortunate that an entity like the Post didn’t even bother to look into it.

Elie Mystal: The journalism aspect here is that if you are going to write a article about how much Elizabeth Warren charges, then your due diligence requires you to figure out how much people of her ilk, of her caliber at that time were charging for comparison’s sake.

Joe Patrice: And this came out last night, the list, and they put up this story first thing in the morning. So maybe the issue is they couldn’t get a hold of a lawyer or something in time for their deadline to figure it out, they just kept calling and just going to voicemail or something, which is unfortunate, because if you are missing out on calls, if you are spread too thin, interruptions kill your productivity, but clients demand a quick response, the US-based professional receptionist at Smith.ai help law firms screen new clients and schedule appointments by phone and website chat.

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Elie Mystal: You got me. I was about to scream, unacceptable.

Joe Patrice: Yeah. No, well, I mean it would be, and that’s why Smith.ai is what you need to go with.

But anyway, moving on, we are now going to talk actually about a different kind of law altogether. We were talking about billable hours, let’s talk about class actions and the plaintiffs’ side a little bit.

So today we are joined by Jay Edelson of Edelson, his own firm.

So welcome to the show.

Jay Edelson: Thanks a lot. Really happy to be here.

Elie Mystal: Congratulations on the eponymous law firm.

Joe Patrice: Yeah.

Jay Edelson: It was really lucky, we drew out of a hat, I am very proud of that moment.

Joe Patrice: So let’s talk a little bit about plaintiff side work, because that’s something that we don’t talk quite enough about here at Above the Law, because a lot of our coverage is very fixated on big law firms in New York and DC, but there is a booming business of injustices around the country that need lawyers willing to take them on. And what you do is a lot of those sorts of class actions, in particular in the tech space. And what I was kind of interested in asking first is what drew you to this line of work; there are so many opportunities for somebody like you to have been sucked into the defense side, what drew you to the plaintiff side?

Jay Edelson: Yeah. Well, I was sucked into the defense side at the beginning. I went to Michigan Law School and we were taught that the only jobs were at big law, and even though politically and kind of where my heart was, I wasn’t terribly interested. For some reason I bought into this idea that if you want to do really sophisticated law it had to be at a large firm.

I started —

Elie Mystal: There were probably 180,000 reasons probably.

Jay Edelson: But in terms of — you are saying in terms of money?

Joe Patrice: I think he is saying $180,000, which probably wasn’t the going route back then.

Jay Edelson: Oh, yeah, no, I mean I already have a bone to pick with you guys. You guys start the podcast lamenting how 41 years old is ancient. I played a lot of volleyball and I am three years away from being able to play in senior tournaments; I mean you have got to be 50 for that. I mean that’s like the end of my life if I can qualify.

But no, when I started I think Skadden was offering $73,000 and that was a huge amount. I think my first firm, it was like 67 or 68.5. We were thinking in terms of $1,000 increments.

But no, I went to the defense side because I thought it was the most sophisticated work I could be doing and I started defending class actions and it occurred to me pretty quickly that the guys on the other side were handling the same case I was, that was just as sophisticated; the big difference was that’s all they were handling.

(00:09:59)

So I got to do the really fun class actions, but then I also had to do really boring breach of contract cases too. On the plaintiff’s side, the firms were picking and choosing their cases and just seemed a lot more fun.

Joe Patrice: So that’s what drives you into this. I guess another question is when did the decision come to go out, start your own firm, and what kind of challenges, lessons do you have from the whole experience of starting up on your own?

Jay Edelson: So big law and I kind of agreed pretty quickly that I was a bad fit. So I was at one firm and then left to go to another firm, what I thought would be greener pastures, and then six months in I actually got fired, which was pretty stunning to me, because I have always thought I had a lot of talent for law, and what I didn’t realize is that part of what you have got to do really just to have success if you are working for a boss is to understand they are your boss and you have got to be deferential and all of that and I am just not really built that way.

Elie Mystal: Ah, the hierarchy.

Jay Edelson: Yeah, it was difficult. I had a wife and mortgage and she was in medical school, so it was a pretty scary time, but I realized quickly that I really liked law, I just didn’t like law firms.

So I switched to a plaintiffs’ firm and I worked there for a couple of years to kind of learn the business side of that and then started my own firm when I was about four years out. I had gone to court I think twice, I had taken two depositions, defended three depositions and I really had no idea what I was doing. It took me a few years to figure it out.

Elie Mystal: We have listeners who are often thinking about jumping ship and starting their own business and what have you. From a plaintiffs’ side perspective, can you talk a little bit about how many cases you need to keep in the kind of fire, to keep the trains running on time, when you are working on a contingency fee, when you have these cases that can drag out for very long, you still need to pay monthly rents and you have payroll, so like how many cases do you really need to have kind of going at once in order to have some confidence that one of them is going to pay off in a timely manner?

Jay Edelson: I think respectively there is a little bit of a different analysis, which is the first question is how do you survive until any of those cases come in? So on the plaintiffs’ side you could have 100 cases, but you might have to wait two to three years before any start paying off. So I had to do a mix of hourly work, which I really hated, and that was enough to kind of keep the lights on. And then it was two of us and we would have — you kind of want to have as many cases as are manageable and then you want to have good distribution of bigger cases and smaller cases.

At the beginning smaller cases are likely going to settle earlier, but you also want to have some big ones so that at some point the cash flow issue isn’t as big a problem. Right now our firm is obviously a lot bigger, we have close to 30 attorneys and probably about 300 cases at any given time.

Joe Patrice: So one thing, that mix of smaller cases that pay off faster, billable hour work to kind of keep things going, one thing that’s developed a lot over the last few years is kind of the rise of litigation funding. At first I was — when I first heard about it moving into the country I was a little skeptical, but as I have learned more about it, I have kind of grown to really appreciate the way in which it allows some of these claims that might never otherwise make it to get heard.

What’s your take of — do you work with litigation funders on some matters, not on others, what’s your take on all that?

Jay Edelson: Litigation funding is difficult and I am sure it’s a lot easier now to start a law firm, getting a bunch of money, and I see a number of firms that have started based on litigation funding and I think in the end those firms aren’t going to actually be very successful.

There was something really helpful about me having to be out in the woods for a few years, where I could figure out how to keep the lights on. And it’s kind of similar to Silicon Valley, if you give a startup $5 million right away, they tend to burn to the $5 million and often they haven’t learned a ton and then they just want more money.

So I think litigation financing in kind of limited circumstances can be really helpful, but I think it can breed a type of laziness and also a weird type of arrogance, where you see some firms that get a lot of litigation funding and they think that they have accomplished something and they haven’t won any cases yet.

So I still like that there is litigation funding out there, but I think it’s fairly complicated and it creates some weird incentive.

(00:15:06)

Elie Mystal: Yeah, I mean my issue with it is always the kind of ethical concerns, like as you put it, I think you put it exactly right, there are — litigation funding introduces the possibility of some diverse incentives, not saying that that actually happens, but it certainly introduces the possibility, the appearance of such.

Jay Edelson: No, I think it does actually happen and there is different types of litigation financing agreements, but if a company is giving you money for one case in particular, you might have a huge incentive to hit a home run and no incentive financially to hit a single, because you wouldn’t get any of the money. Now, obviously we have a duty to our clients and you hope that all attorneys put that first, but the tug of the financial arrangement has to mean something.

My quibble though with your statement, if you don’t mind, is that people focus a lot on the bad incentives on the plaintiffs’ side, but I really found that to be true on the defense side. Right before I got fired from that firm we had a firm meeting where the management partner said, the firm is doing terrific so long as x partner doesn’t settle any of her cases, and it wasn’t a joke.

And I thought that was really horrible that we had such an incentive to keep cases going and just to keep billing the clients, and that’s something that — and I know you guys on Above the Law write about that and talk about that and you have the whole 00:16:37 file email fiasco, but my view is any time you mention litigation financing, you have to talk about the defense incentives as well.    

Elie Mystal: Yeah, there are all different kinds of overbilling schemes. I mean look, the big law model and the defense model is to duplicate a lot of work. I mean you can argue that that’s part of what you are paying for, you have multiple eyes and whatever, but it also — big law model does not encourage efficiency, I mean that’s not what it’s there for.

Jay Edelson: I would go further than that, it’s not that it just encourages duplication of work; the goal on the litigation side is to win as slowly as possible. In my first firm, the first year I came up with an argument and got a large class action dismissed in the first month and I got a pat on the back and the senior partner in litigation told me we just lost $2 million in billables. And the message was pretty clear to me, you know, keep that argument, but try to figure out a way to use it later on in the case, and obviously that’s just something that didn’t work for me, but that is —

Elie Mystal: And it doesn’t work for clients.

Jay Edelson: It doesn’t work for clients, but they often don’t know.

Joe Patrice: Yeah.

Elie Mystal: What do you think about legal technology and that ability to kind of help people starting out, help people grow their business, kind of fight the big law firms at scale, when you are coming from the plaintiffs’ side?

Jay Edelson: Yeah, I think it’s great. Back in the day when I started on the defense side, the amount of support staff we had to have was enormous, the way we are able to use technology, we have another office in San Francisco and we are able to communicate with them and share files and all of that really increases efficiency. I think overall technology has really democratized law in a lot of ways that are incredibly helpful.

Elie Mystal: How do you go about like picking which software, like do you go to these tech shows and walk the room, like do you take — you open up your email and like, oh, that spam actually looks interesting, like how do you actually go about the process of picking the client management software or picking the doc sharing software that you are going to use?

Jay Edelson: Oh yeah, no, no one in my firm lets me anywhere near anything like that. So I was a philosophy major. I am — even though we have a tech firm, I am the least techie person out there. And so when I get a new iPhone, I have to have our IT department come and set it up for me.

What’s really lucky is we have — I think we are the only — I know we are the only plaintiffs’ firm who has done this, we have our own internal lab of computer forensic engineers and then tech savvy lawyers who are the ones who investigate cases and really come up with what’s happening. We try not to bring cases which chase the news, we like cases where we have figured out that Google is doing something awful, and then our lawsuit is kind of the first on the scene about that, that’s a lot more fun for us. So because we have that infrastructure in place, questions like what software should we be using get easily answered by those people, certainly not by me.

Elie Mystal: Can I pivot and ask you, how do you hire the lawyers then like, because I know lots of lawyers who are young Millennials and they are the luddites of their generation, right, like the law doesn’t necessarily attract your most kind of tech savvy type of mind? How do you go about finding the talent then for your lab for that kind of work?

(00:20:05)

Jay Edelson: It’s hard, you are definitely right. I mean for our firm in general, we have a lot of people who are not terribly tech savvy and we are not doing patent litigation, it is not rocket science, but we have to know enough to be able to understand it from our kind of internal experts and then be able to explain it to judges. In terms of the real tech savvy lawyers, they tend to find us, because there aren’t a ton of firms that do what we are doing, so that makes it a little bit easier.

One of the really hard things in getting the lab going was I wasn’t able to figure out who to hire, because you have to actually understand tech at a really deep level to know who is good and who is just kind of snowing you. So that was a long process of finding the right people who were fluent enough, who then could hire smarter people than them, and it took us two years to get that in shape.

Joe Patrice: One thing that, on the subject of hiring, one thing about your firm, you have this reputation as a kind of like a startup environment, a more loose, collegial environment and that comes through in some of the marketing. And one question I wanted to ask is about the marketing — some of the marketing decisions.

On your bio, everyone in the firm lists their superpower they would prefer to have and stuff like that, what was kind of the thinking there, and have you seen that as kind of successful, especially when you are trying to deal with people who are generally tech people suing the tech world, has that kind of marketing been a real boom for you?

Jay Edelson: So our approach to marketing is we honestly first live to amuse ourselves and that is our goal. So we have had people come in and say you have had guys dressed up as polar bears, pull summer pranks on summer, and do you have like a PR agency pitching ideas. And no, first of all, no one would ever come up with that. It’s really just silly and a waste of time.

But one of the great things honestly about having your own law firm is you can kind of do whatever you want. And I hate stuffy places. So the fact that we are able to have a volleyball court in our office, that people are dressed in flip-flops all the time, that there really isn’t a hierarchy, it’s really satisfying to me.

And since it’s Above the Law I can say this. It’s also kind of a FU to all the other firms out there who had this view that you if you didn’t come in and wear a suit everyday and you didn’t have this — if you hadn’t practiced for eight years, you couldn’t go to court. I love that every day we show that that’s just bad thanking in my view.

We have third year associates who have done five or six big federal appellate arguments and have won them and these aren’t pro bono cases, where a lot of firms use that to give people experience, these are like key issues that our firm has, but the attorneys are amazing and they do an incredible job and we let them argue it, because we think that they are in a best position to argue it.

Joe Patrice: Well, you raised an all-time classic story there, so now we have got to dig a little deeper into it for the people who don’t remember it. You mentioned the summer associate issue. This is an all-time classic Above the Law story, and I want to hear you kind of go through the oral history of it a little bit. You brought in a summer associate that clashed a little bit with the rest of the class, but by design.

Jay Edelson: Yeah, so we hired a fake summer associate, a professional actor and his job was to be the worst summer associate of all time and he was here for a week. The problem with him was that he was so charming and funny, everyone loved him, but he had all these bits set up where he was like covertly hiring an out of work lawyer to write his memos, which the summers would see, but we didn’t know about it, and then he would hand it to me and I would go, this is how to write a memo.

And it was terrific fun and it was actually really bonding for the summers, because the summer goes quickly and we don’t want people to be nervous, and when like that type of craziness is happening, they are all getting to know each other, they are all asking what’s going on, is this some weird prank, is this real and it’s really — I love all our summer classes or almost all of them. This was the best summer we ever had, but we have done a lot of pranks; we had the polar bear prank.

We had a prank where we pretended that the Fed had shut us down, so when people came in, there was like briefcase and then investigators who were asking questions. That one we wouldn’t repeat, that was a little stressful, so we are tamer now.

(00:25:07)

Elie Mystal: Especially in this era of our country.

Jay Edelson: That’s right.

Elie Mystal: Can I ask a little bit about your pay structure, because this is something I think a lot of, especially law students, think about when — kind of given the option of maybe going away from big law. So big law generally lockstep by year, if there is an hour requirements, it’s lockstep once you hit those hours, in terms of bonuses and what have you, is that what you guys do, or do you take a kind of different approach to the salary structure?

Jay Edelson: We pay all associates $150,000 a year and the expectation is most of the money they are going to make is through bonuses, and the bonuses vary widely; we have had summer associates get six figure bonuses in the past.

Elie Mystal: Whoa.

Jay Edelson: I know it’s —

Elie Mystal: That’s a lot of 3L beer.

Jay Edelson: But it’s because the guy came up with a ridiculous case, which made us a lot of money and was really good for the firm. And what we want is for people to have skin in the game.

So we understand people are coming here and they are going to have a smaller salary yearly than other firms, but we want them to be hungry, we want them to be saying, if I do well, I can buy a house. And we don’t care if you are a first year, if a first year can do really well and can set up a fund so their kid’s college tuition is paid for, that’s great, it’s great for the first year, it’s great for the firm, it’s great for everyone.

Joe Patrice: This is very, very interesting, because we don’t talk about plaintiff side stuff nearly enough and so it’s great that you were able to come here and talk through this with us. And it doesn’t hurt that you are a fun firm, so we got to get some good stories there.

Jay Edelson: Well, thank you so much. I really appreciate you guys had me on. Obviously I love what you guys do both on the ATL website and podcast. So this was a huge pleasure for me.

Joe Patrice: Great.

Elie Mystal: Thank you so much.

Joe Patrice: Thanks. Well, if you all are listening to the show and aren’t subscribed, you should be subscribed. You should give it reviews, stars, write something, help us move up the algorithm as law podcasts. You should be reading Above the Law. You should be following us on Twitter, he is @ElieNYC, I am @JosephPatrice. You should be listening to the other LTN podcasts and The Jabot, which is Kathryn’s podcast here at Above the Law.

And with all of those things said, I think that’s it. So we will talk to you soon.

Elie Mystal: Happy summer.

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