I have subscribed to Insight Cable, telephone and internet for a number of years for services at my home. Over a year ago I asked if they would allow me, as a loyal customer, to add the unlimited long distance they were advertising for new customers to my phone service for the advertised rate (free). They allowed me to do this, never explaining that I would now be bundled into an introductory service plan. I thought they were just doing smart business by rewarding a long time customer. Nope – after a year I was informed that my “introductory package” price was being jacked up an extra ten dollars. I discovered a new line on the bill that showed “unlimited long distance” as costing me $11.95, an astronomically high amount with today’s options from VOIP (voice over internet protocol) companies.
Since the $11.95 was a line item, I thought I could merely call and cancel that particular service. Again – NOPE! Sure, I could drop down to basic phone service at $23.00 per month, but my internet and cable charges would jump up higher than what I would be saving by losing the unlimited long distance. I was TRAPPED by Insight’s bundle. Not only that, I walked into it blindly by not being told and not realizing that I was being put into an introductory offer. I am currently pondering the legalities of this. Specifically, if nothing on the bill and no contract exists that says the prices listed are only because they are bundled together, is it unlawful (civilly or criminally) to refuse to drop a single, unwanted service. If enough of us are frustrated by this practice, we could apply market pressures and possibly explore the viability of a class action lawsuit. Beyond that, though, there are some lessons here that are a tenuously about economic justice.
First of all, Insight is engaging in poor business practices in that they effectively punish people who become loyal customers. Their marketing is targeted only to getting people to switch away from some other provider. Unfortunately, they know that most people do not make changes readily and will continue on with them even in the face of mounting charges on their bills because of the effort it takes to change. The second lesson then is that our reluctance to change is our enemy. We must fight against that lethargy and be willing to reject deals such as these that promise short term savings, but cost more in the long run.
The third lesson is that when a company gets large enough, they no longer have to reckon with the individual customer. They can use their economic clout to make the customers conform and even force billions of dollars in welfare type loans and incentives from the government. This became even more evident when I called to talk to Insight about canceling certain services. I spoke with a person who appeared to be inflexible both by nature and training and who gave me the most ludicrous explanation for the charges. They insisted that they simply put $11.95 down for the long distance charge as a random number and it could have been placed on any other particular item so the cost of the phone service was just $35.00 no matter which way you worked it. Again, $35.00 for phone service is ridiculously costly in this day and time. When possible, go small. Smaller companies have to be responsive to individual customers to thrive.
Tying this personal soapbox back into the theme of justice is pretty easy. Those without resources need to band together to have a voice and to be treated with justice, especially in these economic times of trouble.
Oh, just so you know, I canceled the long distance, canceled cable, plan to go to a VOIP company for phone service and will look at Windstream’s prices for internet.
This article regarding Steve Beshear and the legal fees associated with the demise of Kentucky Central Life Insurance Company is likely the first of many on this topic. The article is focusing on the ramifications for Steve Beshear’s bid for Governor. There may be some mileage for that purpose in the story of the millions of dollars Beshear’s firm, Stites & Harbison, charged. The real lessons to be learned from the numbers is not political though. The H-L reports:
Kentucky Central by the numbers
Just before Kentucky Central Life Insurance Co. collapsed, it had built itself into a conglomerate including TV and radio stations, citrus groves and hotels, in addition to the nearly $50 billion worth of life insurance policies it had sold. It’s little wonder, then, that its dismantling would spawn a host of costly lawsuits.
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756
Employed by Kentucky Central Life Insurance at its peak
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466,784
Total number of life insurance policies at Kentucky Central’s peak in 1992
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13
Subsidiary companies held in 1993
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44
Separate lawsuits occurring simultaneously at the height of liquidation in the mid ’90s
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103
Different law firms paid by Kentucky Central between February 1993 and March 2006
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$79,601,030.63
Paid, in total, to legal, accounting and consulting firms
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$40,914,503.79
Paid by Kentucky Central to law firms during that span
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$21,170,543.57
Paid to Stites & Harbison, Steve Beshear’s firm
Nearly 80 million dollars is a tremendous amount of money. I suspect at least a substantial portion of those fees could have been eliminated resulting in better pay outs to the consumers most intimately affected by the insurer’s collapse. No, politics is not the main story. The main story will be a critique of the economic efficiency of biglaw. The questions that should be raised include: What value was added for the Department of Insurance through Stitesand Harbison’s representation? Was the value added for the state more or less than the $20 million spent? Was there any discussion up front about value and expected outcomes or did the Department just turn the firm loose to bill whatever hours they saw fit? Was the firm’s strategy driven by billable hours or driven by maximizing value to the client (the Dept. of Insurance)?
There is a presumption in dealing with large businesses that the bigger the law firm and the higher the hourly rate, the better your representation will be. This story gives the opportunity to challenge that belief. While there are some incredibly experienced attorney’s in biglaw, there are also some incredibly experienced solos. One obvious difference between the two is that there is huge overhead in operating a large law firm. A second difference is that the client has little awareness or control over what attorney actually does the grunt work involved in the case. With a small firm, you form a relationship with the person or persons who actually handle your matter. Large law firms do carry political clout and have tremendous networks of influence. Does that change the result in the courtroom? I suppose it occasionally does. Is it worth the additional $150 to $250 dollars per hour charged? Because one is never certain when that influence might come into play or to what extent, I suggest it is not worth the additional cost. So, what big business is left paying for is the really swanky offices (marble, mahogany, great view of the city, etc.). I have been in those offices; they are really nice.
This post at LexingtonLawyers highlights a real struggle in the legal community between greed and the value of services. It is true that for many impoverished Americans, legal representation is out of reach. Lawyers should assist in pursuing justice for the poor by doing pro bono work. I interviewed at one biglaw firm in Louisville, Kentucky where I inquired about their pro bono program. The interviewer told me that they “do not have time to do pro bono work.” I was not offered the position which was likely a blessing to both of us.
On the other side is the reality that the law is complicated and we attorney’s work very hard in law school. I know this will anger some physicians, but in my law class was a former cardio-vascular surgeon who had a physical problem that prevented him from continuing to do surgery. He told me that law school was more intellectually challenging than medical school had been. I only report what he said – I cannot personally make the comparison, but I do know it was a tough three years. Attorney’s need to be fairly compensated for this expertise.
Too often, I see people who could afford to invest a few hundred dollars into some legal advice attempt to save money by doing it themselves. Sometimes, this backfires and it costs them a few thousand dollars or more in the long run. A friend recently called me from court with a desperate plea for guidance on a child support matter. I quickly gave him the answer he needed and it saved him more than a hundred dollars a month. As one Fayette Family Court judge recently told a person insisting on representing themselves, “You wouldn’t operate on yourself if you needed surgery would you?” It isn’t a perfect example (remember the first Rambo movie? – he was handy as self-surgery), but the point is well taken.
The answer is balance. The $600,000 dollar bill discussed at LexingtonLawyers is one extreme. The law firm in Louisville with the big name that had no time for pro bono work is an extreme. Justice demands that attorney’s find balance by providing value commensurate with their fees and doing a share of pro bono work for the poor.
A potential client called my office the other day. This person was expecting their spouse to serve divorce papers in the next few days and wanted to know what to expect. I talked to this person for a little over 20 minutes about the petition, being served, answering the petition and generally what to expect in a divorce. Towards the end of the conversation they made a comment that was very gratifying to me and made me aware of something that I just do routinely.
This person had worked at a big law firm in some capacity and thanked me for talking for so long without having the clock running. At Biglaw, the conversation would have been billed out for 0.4 hours. Actually, the conversation would not have happened because this person would have only talked to a secretary who would have insisted that she come in for an appointment. Of course, once a person walks down the marbled hallways to the mahogany desk of the Biglaw attorney, and once they had told their tale, they would be unlikely to continue searching for an attorney. Rather, they would reach for the check book.
Another person came and talked to me for an hour a few days prior and, even though I declined to take the case, they started to pull out a check book and asked me what they owed me. I also declined the check, but it highlighted to me what the common expectation is regarding attorneys and money.
Now, Biglaw attorney would say that I am committing business suicide by handing out knowledge and experience so freely. This person, and many others I have provided free consults to, are likely to proceed pro se (represent themselves) or soak up the information I give and end up with another attorney down the line. I can live with that.
Instead, I think it is fundamental marketing and time well invested. Why do supermarkets continue to have people standing at the ends of aisles with free food? First, people get hungry walking about the grocery store looking at food. Second, if their product is good, a few people may buy it whereas they never would have thought twice about it otherwise. I am the guy standing at the end of the aisle and the people I talk to are hungry for legal information. I am confident enough in my product to give samples out for free and without hiding a hook to pull them back. Many people will be grateful for the morsel and continue their shopping, but some will swing back around for more.
I do not actually do it for marketing though. And please, keep this a secret between you and I. I do it because I like to help people, because not everything needs the assistance of counsel, and because I believe the more general information about the law is available to the lay person, the more they will appreciate and turn to attorney’s when they really need the help. Marketing is just my excuse for doing something I believe in doing anyway.
I am not an advocate for socialized law, though it is an intriguing idea. I would prefer to make a healthy living for my family. However, I do not think being stingy with the intellect and education God allowed me to attain is the right approach. Rather, I believe generosity of my time and knowledge will create generous returns. If I never hear from this person again, I believe they will carry a bit of trust for me on to another person in need of some counsel with care.
It has been a number of days since I have posted. I have been busy, but this time that is not the reason. The reason is I have had writer’s block. I have been reading stories in the news about how the numbers of people in severe poverty have risen faster than any other segment of society since 2000. Other stories have reported on how the numbers of people dependent on some form of welfare or government subsidy has not declined. Apparently foreclosures are reaching new heights, especially in Kentucky. The proposed federal budget provided such low increases in social spending programs that inflation caused them to actually have cuts.
Whether you say we are winning the war in Iraq or failing miserably, you have to admit we remain deeply entrenched there. Now it looks like we may be entering pre-war posturing with Iran (my law school chums may recall that I often stated that Iran was the greater threat – told you so!).
But, then there are articles about how great the economy is and the strength of the stock market (today aside). Many corporations are reporting fantastic profits – including oil companies.
I think my block has to do with trying to define a unified theory of the state of the world. Such a theory remains elusive – or at least the articulation of it. Bottom line for this blog, though, is that when there are so many poor and so few resources going to American’s in poverty, then justice for many will remain elusive.
I recently took part in a pro bono legal clinic. It was a tiny drop in a big ocean of need, but it was worthwhile. We cannot wait for the government to respond to the trends that I sense are building to a crisis point (over the course of the next couple of decades). But each of us can contribute each month or each year to improve access to justice for the poor.
One of the hazards of our profession is more subtle. Many lawyers are so desensitized by the fact that they have to take “positions” in court on behalf of their clients that they forget to determine whether those positions are in fact reasonable. We have all been there. You end up in case and the facts go sideways. You have to protect your client’s interest in court and you take a position. The judge rules against you, you lose and go on with your life. But I think many lawyers are so accustomed to taking unreasonable positions on behalf of their clients that they start taking unreasonable positions in life as well. And then, of course, there are those lawyers who could take reasonable positions, but have no ability to determine what is in fact reasonable. Their ability to sort good arguments from bad arguments is compromised by the fact that they get paid by the hour either way. There is no incentive for good strategy in a traditional hourly billing setting.
Sorry for the absence – hopefully it was noticed! Last week involved a hearing in a rather intense custody battle and I have been digging out my desk these past days. My opponent inspired this prior post. True to his/her form, opposing counsel took every opportunity to mischaracaterize records admitted into evidence and statements of witnesses that had left the stand just minutes prior. It truly was a heroic effort at obfuscation on his/her part.
Thanks to God that the barrage of befuddlement fell on deaf ears. My client won the return of his/her child. I am truly sorry though that the child’s pet remains a hostage out of state making it clear that the other parent’s goal was more about revenge and control than about what was best for the child. This base aspect of family law a huge barrier to achieving justice. I’m just glad that it is not an insurmountable barrier because I believe justice was served in this matter and that those attorney’s who pander to pettiness often do not prevail.
The web is alive with news that at least one New York law firm has bumped up the starting salary of their new associations to $160,000.00. See Above the Law for a start. Here is Lexington, Kentucky Stoll Keenon Ogden started their 2006 graduates out around $84k and some change. Stites and Greenebaum are in that range more or less. Then, one drops down to mid-size firms who paid their 2006 graduates about $45k. Lousville firms are paying roughly the same – maybe a couple k more. I checked a cost of living calculator and found that $85k here in Lexington equaled $183k in Manhattan.
Now, for those of you going to a big law firm, I hope you realize that most of your work will actually be done by one of those brand new lawyers who are just as inexperienced as every other brand new lawyer. While they were the top of their class (or a relative of a partner), the difference in brain power between the tip-top and the rest of the class measured in decimal places. Choose well Grasshopper!
This is an excellent quote posted by Lawreader from Miller v. Commonwealth, 270 Ky. 378 (KY, 1937):
Indeed, it is, for the poor, the lowly, and the helpless, that governments and courts have been set up and laws have been written. The great and mighty have little need for these. They would perhaps be greater and mightier without them, than with them, but the poor and lowly would be utterly wretched without them. The more helpless you are the higher you stand in the favor of the courts
This reflects an aspect of the pursuit of justice that I hoped to capture with this weblog. I interviewed for one of the largest firms in Lousville for a summer internship and asked how they treated pro bono work. The interviewer told me they were far to busy to do pro bono work and so it was not a consideration. I’m sure there are some large firms that do a fair share of pro bono service but I suspect it is the small firms and solo practitioners that do the greatest share. If anyone has statistics on this, please let me know.
