On this latter issue, the Acting Assistant Attorney General of the Department of Justice, testified as follows: "I think it is also important to note the areas in which minimum Ile further testified that it was the view of the Department of Justice that both voluntary and integrated bar association were subject to the antitrust laws. The matter will ultimately be resolved on appeal. The Subcommittee spent two days looking at two federal programs with different methods of financing needed representation. The Black Lung Benefits Act provides for an indirect federal subsidy of contingent fee awards to attorneys who secure benefits for miners at the state level. The Veterans' Benefit Programs, on the other hand, provide that no attorney can charge more than $10.00 for securing a claim for a veteran. We explored each of these programs asking ourselves which method affords the best representation for the citizen at least cost to the taxpayer and the beneficiary of the program. Last year, eleven attorneys in Kentucky each made between $100,000 and $1.08 million representing miners in obtaining 'Black Lung" benefits under state and federal programs. Some claimed that these attorneys did little or no work to reap these huge rewards: they helped the miners to fill out a form which is unnecessarily complicated: they arranged for a medical examination by a doctor who always seems to find evidence of the disease: they argued what arounted to a "pro forma" motion before the State Workmen's Compensation Board. The attorneys, of course, claimed that they were providing badly needed representation to these miners and that they were worth every penny of the cost of their services. I cannot help but feel that there is a cheaper way to get quality representation for these miners at less expensive rates to the taxpayer and to the miners themselves. Under the veterans programs, we heard about large numbers of veterans who went without the services of an attorney, when legal representation was necessary, solely because they could not find an attorney to take their case for the meager fee of $10.00. flere again, the federal program does not seem to be well designed. -4 In the last two days of hearings, the Subcommittee looked into the recent trend of court awards of attorneys' fees to the prevailing party in litigation, often labeled "fee-shifting". In some cases the court is explicitly given the power to award attorneys' fees by a federal statute. One example is in the fair employment provisions of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-5(K). In other situations, courts have implied this power where fee-shifting is deemed necessary to effectuate a strong congressional or constitutional policy. As the United States District Court for the Northern District of California per Judge Robert F. Peckham said in La Raza v. Volpe, 57 F.R.D. 94 C.D. Cal. 1972). 'The rule briefly stated is that whenever there is nothing in a statutory scheme which might be interpreted as precluding it, a 'private attorney-general' should be awarded attorneys' fees when he has effectuated a strong congressional policy, which has benefited a large class of people, and where further the necessity of financial burden of private enforcement are such as to make the award essential." As testimony in the hearings showed, fee-shifting will have its most potent effect where a plaintiff seeks only equitable relief. Analogous to the contingent fee mechanism, now widely employed by trial lawyers, if the attorney wins his client's case his fee will be paid by the losing party. If the attorney loses his client's case, the attorney will absorb the expense. Like contingent fees, fee-shifting will provide a method of making quality attorneys available to average citizens without a direct outlay of funds on the part of the citizen. Through this mechanism, Congress can be sure that the laws which it passes in the environmental and consumer areas, among others, will not be repealed defacto because an aggrieved citizen cannot afford to obtain representation to vindicate the rights granted in that legislation. Through the courts' use of their equitable powers in this area, other laws too, may be more effectively enforced. One problem which was raised at the hearings was the effect of 28 U.S.C. 2412 which prohibits awards of attorneys' fees against the federal government absent specific statutory authorization. Since many cases on behalf of previously unpresented interests are brought against the federal government, proponents of fee-shifting suggested that legislative reform is needed in this area. They argued that the federal government is now subsidizing 50% of all business litigation, whether the suit is won or lost, frivilous or meritorious, because the cost of the attorneys' fees will be written-off as an ordinary and necessary business expense. The federal government pays 50% of G.M.'s attorneys' fees when it sues the United States to invalidate provisions of the Clean Air Act whether G.M. is ultimately victorious or not. It isn't fair they argue, not to award attorneys' fees to a private citizen who proves that some federal official violated federal law. In essence, these private citizens are acting as "private attorneys general". When these private attorneys general guard the guardians why shouldn't they receive an award of attorneys' fees. -5 Opponents argue that to allow awards of attorneys' fees against the federal government would encourage lawsuits against the federal government. Such a development they say, would flood the courts with frivolous litigation. Despite these charges, where Congress has already provided for fee-shifting against the federal government, courts have not been inundated. breover, courts have always retained the power to penalize plaintiffs with the costs of defendants' attorneys' fees where the plaintiffs suit is frivolous and brought solely to harrass. The Subcommittee is presently compiling the report on the hearings and on other information and comments received on the subject of legal fees. The official record will close on November 6, and a printed version should be available by the end of the year. The record may well generate legislative proposals in some of the areas studied. Legal fees has been the first area of public inquiry by the Subcommittee, but other issues are currently being studied and may be the subject of later hearings. These areas include legal education, professional responsibility, the pros and cons of specialization, the increased use of paralegal assistance, and possible changes in the code of professional responsibility concerning advertising and solicitation. Additionally, the Subcommittee is looking into complex questions involved with group and prepaid legal services plans, as methods of financing legal services to middle-income Americans. As our inquiry broadens we welcome the comments, criticisms and suggestions of the organized bar. I have written to all the Presidents of every state bar association soliciting comments for the record on our first six days of hearings. As I said earlier, this record closes on November 6. I would like to take this opportunity to reiterate my request and the importance of the input which the organized bar can have into the Subcommittee's work. Chesterfield Smith, President of the American Bar Association, has written to me as follows: "In my own judgment, there is no activity of the Congress which is more important to the American Bar Association, and to the national legal profession for which it speaks, than that of your Subcommittee: nor is there in my judgment any other congressional activity which has a greater possibility for lasting benefit for the citizens of our country in our never-ending search of equal justice for all." AMERICAN PAR ASSOCIATION CODE OF PROFESSIONAL RESPONSIBILITY CANNON 2 A LAWYER SHOULD ASSIST THE LEGAL COUNSEL AVAILABLE Disciplinary Rule 2-106 Fees for Legal Services. (A) A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee. (B) A fee is clearly excessive when, after a review of the facts, a lawyer of ordinary prudence would be left with a definite and firm conviction that the fee is in excess of a reasonable fee. Factors to be considered as guides in determining the reasonableness of a fee include the following: (1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. (2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer. (3) The fee customarily charged in the locality for similar legal services. (4) The amount involved and the results obtained. (5) The time limitations imposed by the client or by the (6) The nature and length of the professional relationship with (7) The experience, reputation, and ability of the lawyer or lawyers performing the services. (8) Whether the fee is fixed or contingent. (C) A lawyer shall not enter into an arrangement for, charge, or collect a contingent fee for representing a defendant in a criminal case. I too enjoyed my meeting and lunch with you last week; and I am confident that the many close contacts which will be occasioned On behalf of the American Bar Association, I wish to express our deep interest in the program of your new Subcommittee to study the legal profession and its ability to afford all citizens the basic right to legal representation. As I mentioned in our meeting last week, the officers of the Association and its staff are fully prepared to cooperate with the Subcommittee in all feasible ways in this most important undertaking. In response to the Subcommittee's request, I have asked Walter P. Armstrong, Jr., Esq., a distinguished lawyer from Memphis, Tennessee, and a former chairman and long-time member of the Association's Standing Committee on Ethics and Profes sional Responsibility to appear before the Subcommittee at its September 20 hearing on the subject of minimum fee schedules. While the Subcommittee has determined to structure its initial hearings on the issue of legal fees, obviously an important determinant of citizen access to legal services. I would like to briefly sketch the Association's recent history of concern and action in the general area of availability of legal services. Prior to 1965, the Association's program in the general area was confined to efforts to promote and stimulate lawyer referral systems and the development and support of traditional legal aid and defender activities. But in 1965, the House of Delegates |