Everywhere we turn, there’s an ad for a lawyer – on television, streaming services, radio, podcasts, public transportation and, of course, billboards.
Not so long ago, the legal profession observed a self-imposed ban on advertising by law firms, considering such self-promotion unprofessional. In 1977, the Supreme Court ruled such bans to be an unconstitutional restriction on freedom of speech.
What began as a trickle of unremarkable professional services ads is now a deluge. Lawyers in the U.S. spend an estimated $2.4 billion annually on advertising. One survey finds that in 2023 law firms spent more than $40 million on advertising just in Colorado.
Billboard lawyers don’t spend that kind of money because they are desperate. They advertise because litigation is profitable – especially in Colorado.
For reasons that defy common sense, our lawmakers increasingly choose to make filing a lawsuit the first option for solving disputes. In just the past two years, the legislature passed 53 bills that created new opportunities for Coloradans to file lawsuits.
That’s just crazy!
Not every dispute is cause for litigation. In fact, most disputes could be resolved without ever involving a lawyer. After all, in many lawsuits it seems the only true winners are the attorneys.
Yes, lawsuits are sometimes necessary, but litigation should be the last resort. “Lawyering up” often makes resolving a problem take longer and cost more.
Consider:
• In an employment dispute, an employee who loses her job may be entitled to compensation for unused vacation time or for unpaid commissions. If she believes she is owed $20,000, she could write a demand letter to the employer or report the problem to the Colorado Department of Labor.
If she hires an attorney, the dispute will likely expand to claim additional damages for retaliation and illegal discrimination. The attorney charges a contingent fee of 40-45% of the clients’ ultimate award which creates an incentive to inflate claims. In response, the employer lawyers up, too, so its legal costs are rising with every passing day.
If she was indeed owed $20,000, her attorney now takes $8,000, and she’s left with just $12,000.
• Construction litigation is a popular cottage industry for certain plaintiffs’ lawyers – particularly when a problem occurs in multi-family housing, like condos or townhomes.
To be sure, problems from construction do exist – sometimes due to a contractor who was in over their head or a design detail that just didn’t work out. Other times a worker made a mistake on a bad day.
Advised of the problem within a reasonable time, a homebuilder or contractor will usually try to fix the issue because unhappy customers complain to friends and neighbors which is bad for business.
However, if homeowners instead hire a lawyer or initiate litigation, the builder can no longer try to fix the problem because to do so would be to destroy evidence so the potential for an easy fix is lost.
The homeowner’s lawyer often hires an engineering firm, which also gets paid tens of thousands of dollars to “discover” additional alleged defects. Then, in the case of condos or townhomes, a single homeowner’s claim might be multiplied by the number of total units in the development, so the “fix” suddenly becomes so expensive a builder has no choice but to work with their insurer and can no longer voluntarily repair the legitimate problem.
Remember, the lawyer’s objective is to resolve the problem and get paid (again 40-45% of the total recovery) which takes time and creates incentives to make the claim as expensive as possible. The homeowner likely just wanted to fix the original problem, but once a lawyer serves notice of a claim, actually fixing the problem becomes that thing which happens after the conclusion of a lawsuit.
Conscientious legislators will recognize that even when a legitimate problem exists, lawsuits are never the most efficient way to fix it. Litigation should be a last resort. Creating more premature litigation might lead to more paydays for billboard lawyers, but it doesn’t produce the timely resolution that someone with a legitimate problem wants most.
Mark Hillman served as Senate Majority Leader. He is now executive director of Colorado Civil Justice League (www.CCJL.org).
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