1972] MINIMUM fee scheduULES 993 dictates that the public should participate in determining its own needs. A decision to depart substantially from. a system in which value and balancing judgments are made by individuals in the marketplace should be rendered by a representative collectivity, either a formal public body or private group with broad-based membership. The arguments which the bar can offer in an effort to achieve collective societal approval of its schedules are not impressive. Though not devoid of merit, they are inadequate to sustain the heavy burden of justification imposed on the legal profession by the economic considerations that militate against tampering with free pricing mechanisms. Substantial evidence that special circumstances make price manipulation necessary seems required; the general fact that professions are in some respects dissimilar from other economic groups does not alone suffice. Admittedly, lack of sound empirical data makes firm conclusions precarious; sophisticated research is needed. Final judgment, however, should not be postponed because empirical uncertainties may ultimately be reduced. Indeed, even if it could be shown that the benefits of fee schedules outweigh the costs, this would be insufficient to justify their continued use. For such goals as quality legal service and dissemination of price information can be pursued by a variety of means. Fixing minima is only appropriate if it produces less serious, undesirable consequences than do the available options. This has nowhere been demonstrated. Absent such demonstration, minimum fee schedules should be abandoned. THE WISCONSIN MINIMUM FEE SCHEDULE: Over one half of the state bar associations, including Wisconsin's, have adopted minimum fee schedules. The use of such schedules as a basis for charges for legal services raises serious antitrust problems. This comment will evaluate the antitrust implications of the minimum fee schedule as adopted in Wisconsin under both the Sherman Antitrust Act1 and its Wisconsin counterpart.2 It is hoped that this discussion will stimulate thought within the legal profession regarding the justification for fee schedules in light of the social policies which are sought to be fostered through the antitrust laws. I. THE FACTUAL SETTING The State Bar of Wisconsin was integrated on a permanent basis by order of the Supreme Court of Wisconsin, pursuant to the court's power to supervise the administration of justice. Thereafter all Wisconsin attorneys were required to become members of the state bar. The stated objectives of the organization are to aid the court in carrying on and improving the administration of justice; to foster and maintain on the part of those engaged in the practice of law high ideals of integrity, learning, competence, public service, and high standards of conduct; to safeguard the professional interests of the members of the bar... to the end that public responsibility of the legal profession may be more effectively dis 1 15 U.S.C. § 1 (1964). Based on information available at ABA headquarters 28 states have state wide schedules; they are as follows: Arizona, Georgia, Idaho, Illinois, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming. In addition, many local bar associations have fee schedules. Some 700 local and siate bar associations' recommend or have advisory fee schedules. See ABA, STATISTICAL ANALYSIS OF RECOMMENDED MINIMUM FEES FOR SELECTED LEGAL SERVICES 1, 28 (July 1966); ABA, MINIMUM FEE SCHEDULES: Manual FOR ASSISTANCE OF STATE AND LOCAL BAR COMMITTEES 7 (March 1963). 2 WIS. STAT. § 133.01 (1965). 3 Relatively little legal literature has been published that concerns itself with the application of antitrust laws to lawyers' minimum fee schedules. V. COUNTRYMAN & T. FINMAN, THE LAWYER IN MODERN SOCIETY 150-51 (1966); ABA, Antitrust Exemptions, 33 A.B.A. ANTITRUST L.J. 48 (1967); Boughner, Let's Throw Out the Reasonable Fee Schedules, 48 A.B.A.J. 252 (1952); American Bar Foundation, Minimum Fee Schedules and the Antitrust Laws: A Preliminary Analysis (Research Memorandum Series No. 12, 1958). The adoption of fee schedules has not been without controversy in the profession itself. Note, 40 Iowa L. Rev. 642 (1955). 4 In re Integration of Bar, 5 Wis. 2d 618, 93 N.W.2d 601 (1958). 1238 charged." WISCONSIN LAW REVIEW [VOL. 1968: 1237 The rules of the Wisconsin Bar further provide that the conduct of Wisconsin attorneys is to be governed by the canons of the American Bar Association and by the Supreme Court of Wisconsin." The canons explicitly allow a lawyer to consult a fee schedule in determining his charge to a client. The fee schedule currently in use in Wisconsin was prepared by the state bar's special Committee on Economics of the Bar and was adopted by the board of governors of the state bar in 1966. Various rationales have been earnestly advanced in support of the fee schedule: (1) Its use stifles price-cutting, thus promoting adherence to the canons of professional ethics which forbid advertisement and solicitation of business; (2) The fee schedule assures the lawyer adequate compensation, enabling him to devote sufficient time and study to his legal work thereby enhancing the quality of service performed for his client;o (3) The fee schedule helps attract able young men to the bar and encourages practicing attorneys to remain in the profession;10 (4) The schedule is an aid to younger lawyers and judges in setting reasonable fees;11 (5) Finally, the schedule's use supposedly prevents discrimination among clients and avoids overcharges to the public." 12 The fee schedule is, in theory, a flexible institution. It is subject to change or modification by the Supreme Court of Wisconsin under the court's general superintending power over the administration of justice.18 Not all fees are governed by the fee schedule.1 Moreover, the fee charged must be reasonable in 5 STATE BAR OF WIS. R. 1, § 2 as reported in 38 WIS. BAR BULL. 12 (Supp. Dec. 1965). 6 RULE 9, id. at 20. 7 ABA CANONS OF PROFESSIONAL ETHICS No. 12 provides in part that "[i]n determining the customary charges of the Bar for similar circumstances, it is proper for a lawyer to consider a schedule of minimum fees 8 Id. No. 7; Id. No. 27. This rationale can also be found in COMMITTEE on PROFESSIONAL ETHICS OF THE STATE BAR OF WISCONSIN, OPINION No. 8 (1956). But see Boughner, supra note 3, at 252. ABA CANONS OF PROFESSIONAL ETHICS No. 29. This rationale can be found in ABA COMM. ON PROFESSIONAL ETHICS, OPINIONS, No. 302 (1961) and WISCONSIN OPINION No. 8, supra note 8. 10 Lathrop v. Donohue, 10 Wis. 2d 230, 248, 102 N.W.2d 404 (1960), aff'd, 367 U.S. 820 (1961). 11 STATE BAR OF WISCONSIN, SCHEDULE OF MINIMUM FEES FOR ATTORNEYS AND RELATED MATTERS, at Forward 1 (1960). 12 Id.; Lathrop v. Donohue, 10 Wis. 2d 230, 249, 102 N.W.2d 404, 414 (1960). 13 WIS. CONST. art. VII, § 3; Rule 9, supra note 5. 14 WIS. STAT. § 102.26 (1965) limits fees in workman's compensation cases. WIS. STAT. §§ 256.48-49 (1965) state that guardians ad litem and court-appointed attorneys are to receive compensation as is "customarily charged by attorneys in this state for comparable services." This does not require the full use of the minimum fee schedule. See State v. Kenney, 16 1239 light of all the facts and circumstances, and is subject to court review.15 The schedule is theoretically only one of several criteria which is to be used in determining the reasonableness of a fee. The canons of professional ethics have enunciated other factors which should be taken into consideration. Some of these factors, reflected in decisions17 of the Supreme Court of Wisconsin, are the amount of time and money involved; the nature, importance and character of the services rendered; the amount of responsibility imposed on counsel; the skill and experience called for; the age, professional character and standing of the attorney; the results obtained; and whether the fee charged was certain or contingent. It is clear that blind adherence to the fee schedule is neither intended nor acceptable.18 In some circumstances the lawyer has a duty to serve without compensation or for a lesser amount than 24 Wis. 2d 172, 128 N.W.2d 450 (1964); Conway v. Sauk County, 19 Wis. 2d 599, 120 N.W.2d 671 (1963); but see dissent of Hallows, id. at 607, 120 N.W. 2d at 676. The fee schedule covers various time charges and contingent fee rates, but does not of course cover retainer fee rates. 15 The Supreme Court of Wisconsin feels free to make its own determination of the reasonableness of a fee under review, due to its expert knowledge. Giffen v. Tigerton Lumber Co., 26 Wis. 2d 327, 331, 132 N.W. 2d 572, 574 (1965); Touchett v. EZ Paintr Corp., 14 Wis.2d 479, 111 N.W.2d 419 (1961); Will of Gudde, 260 Wis. 79, 86, 49 N.W.2d 906, 909 (1951). 10 ABA CANONS OF PROFESSIONAL ETHICS No. 12 provides in part that [i]n determining the amount of the fee it is proper to consider (1) the time and labor required, the novelty and difficulty of the questions involved and the skill requisite properly to conduct the cause; (2) whether the acceptance of employment in the particular case will preclude the lawyer's appearance for others in cases likely to arise out of the transaction, and in which there is a reasonable expectation that otherwise he would be employed, or will involve the loss of other employment while employed in the particular case or antagonisms with other clients; (3) the customary charges of the Bar for similar services; (4) the amount involved in the controversy and the benefits resulting to the client from the. services; (5) the contingency or the certainty of the compensation; and (6) the character of the employment, whether casual or for an established and constant client. No one of these considerations in itself is controlling. They are mere guides in ascertaining the real value of the service. 17 E.g., Continental Cas. Co. v. Pogorzelski, 275 Wis. 350, 354, 82 N.W.2d 183 (1957); Podell v. Gronik, 229 Wis. 238, 242, 282 N.W. 53 (1938); Will of Willing, 190 Wis. 406, 413, 209 N.W. 602 (1926). F. LAHART, BUSINESS ASPECTS OF THE LEGAL PROFESSION 8 (1956) states that in charging a client for the time spent in a given instance the lawyer must consider whether the time was spent in the client's interest or in educating himself. He should charge the client only for the reasonable time that it would take another equally trained attorney to perform the service and not for any unreasonable time that it may have taken him. 18 ABA CANONS OF PROFESSIONAL ETHICS NO. 12; State v. Kenney, 24 Wis. 2d 172, 180, 128 N.W.2d 450, 455 (1964) (going rate was recognized to be two-thirds of the minimum fee schedule); Touchett v. EZ Paintr Corp., 14 Wis. 2d 479, 487, 111 N.W.2d 419, 423 (1961) (lawyer of ability and experience is entitled to be compensated on a basis above that suggested in the minimum fee schedule). 1240 WISCONSIN LAW REVIEW [VOL. 1968: 1237 that called for by the schedule-for example, when a client is genuinely unable to pay the scheduled fee. On the other hand, both the American Bar Association and the State Bar of Wisconsin have stated that it is unethical for the attorney to habitually charge less than the fee schedule.10 The minimum fee schedule then is not an inflexible standard, but the starting point in determining the fee. Variances result from the application of one or more of the indicated factors. However one must bear in mind that lawyers are creatures of habit and convenience and the very existence of the fee schedule tends to compel compliance with its terms. Because of the semi-compulsive character of the Wisconsin minimum fee schedule and the corresponding tendency to restrain competition, antitrust implications must be considered. II. THE ANTITRUST LAWS The basic federal antitrust statute is the Sherman Act which states that [e]very contract, combination in the form of trust or other- The Wisconsin counterpart to the Sherman Act is chapter 133 of the Wisconsin Statutes. The wording of the first sentence of section 133.01 is identical to the quoted portion of the Sherman Act except for the deletion of references to interstate and foreign commerce. Accordingly, the Supreme Court of Wisconsin has held that the state law should be given a construction similar to that of the Sherman Act.21 As a general proposition, the discussion of the fee schedule under the federal act will apply with equal force to Wisconsin law. However, statutory modifications and jurisdictional questions which raise problems peculiar to one of the laws will be explored separately. Standing alone, the language of the Sherman Act does not indicate any basis for the exclusion of the lawyers' minimum fee schedule. The first thing of note is the expansive scope of the statutory language: every contract, combination or conspiracy which restrains commerce among the several states is unlawful. In addition there are specific statutory exemptions.22 On its face 19 ABA COMM. ON PROFESSIONAL ETHICS, OPINIONS, No. 302 (1961); COMMITTEE ON PROFESSIONAL ETHICS OF THE STATE BAR OF WISCONSIN, OPINION NO. 8 (1956). 20 15 U.S.C. § 1 (1964). 21 State v. Lewis & Leiserndorf Co., 201 Wis. 543, 230 N.W. 692 (1930); Pulp Wood Co. v. Green Bay Paper & Fiber Co., 157 Wis. 604, 147 N.W. 1058 (1914). 22 E.g., agricultural co-operatives, 15 U.S.C. § 17 (1964) and 7 U.S.C. §§ 291-92 (1964); fisheries, 15 U.S.C. §§ 521-22 (1964); government contracts, 50 U.S.C. § 2158 (1964); labor, 15 U.S.C. § 17 (1964) and 29 U.S.C. § 52 (1964). |