It Was the Best of Times_ It Was the Worst of Times The

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It Was the Best of Times_ It Was the Worst of Times The Powered By Docstoc
					It Was the Best of Times, It Was the Worst of
Times: The Precarious Nature of Plaintiffs' Practice
in Texas

Stephen Daniels and Joanne Martin*
      It was the best of times, it was the worst of times, it was the age of
      wisdom, it was the age offoolismess, it was the epoch of belief,it was
      the epoch of incredulity, it was the season of Light, it was the season
      of Darkness, it was the spring of hope, it was the winter ofdespair,we
      had everything before us, we had nothing before us, we were all going
      direct to Heaven, we were all going direct the otherway ....   I

     Plaintiffs' lawyers practice in inherently unstable markets that are
shaped both by the relevant legal rules that define formal procedures and
causes of action, and by the broader legal environment in which they work.2
Legal rules and that broader legal environment are never static, and even
small changes can affect plaintiffs' lawyers' practices in significant ways.
As one Texas plaintiffs' lawyer simply put it, "we live on the edge of
extinction all of the time."'3 The 1990s were an especially challenging period
for Texas plaintiffs' lawyers in the wake of tort reform's legislative changes
and aggressive public relations campaigns, and in light of a very different
state supreme court. 4 To stay in business, plaintiffs' lawyers must be able to


       American Bar Foundation, 750 North Lake Shore Drive, Chicago, IL 60611.
                                                                                      The authors
would like to thank the conference participants for their comments and suggestions. The authors
would also like to thank Professor Stephen Gilles and the participants in the panel "Tort Out of
Court," at the 2002 Association of American Law Schools Meeting, for their comments and
suggestions on an earlier version of a part of this Article.
    1. CHARLES DICKENS, A TALE OFTWo CrnEs 1 (Oxford Univ. Press, 1987) (1859).
    2. The legal rules define formal procedures and causes of action. The broader legal
environment includes the attitudes jurors bring with them as well as the processes for settling the
bulk of cases that do not go to trial. In addition, their work is shaped by the geographic
environment from which claims emerge; by the one-shot nature of their client base; and by the
contingency fee system on which they rely almost exclusively. See Stephen Daniels & Joanne
Martin, "We Live on the Edge of Extinction All the Time:" Entrepreneurs,Innovation and the
Plaintiffs' Bar in the Wake of Tort Reform, in LEGAL PROFESSIONS: WORK. STRUCTURE AND
ORGANIZATION 149, 155-67 (Jerry Van Hoy ed., 2001).
    3. Unless otherwise attributed, all quotes by Texas lawyers in this Article are taken from
interviews we conducted at the end of the 1990s. Transcripts are on file with the authors. See the
Methodological Appendix, infra Part V.
    4. Typical of plaintiffs' lawyers' views of the Texas Supreme Court is the assessment of a
Houston attorney: "Our Supreme Court is just barely to the right of Atilla the Hun, and you know,
all of the defense people know it."




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                                                                               5
respond successfully to the challenges posed by the market, and not all do.
Our interest in this Article is exploring why the 1990s were the worst of
times for some Texas plaintiffs' lawyers, while being a relatively better time
for others.
     Our earlier work has described some of the ways in which Texas
plaintiffs' lawyers have reacted to the changes they see in the market for their
services. We have examined the pessimism of many "bread and butter"
plaintiffs' lawyers (those handling low- to modest-value cases) who have
watched their practices shrink and their profit margins evaporate. 6 Their
reactions to the changes around them have been largely defensive, geared
only to immediate survival. For them, it is a matter of "hunkering down" and
hoping for the best. A Fort Worth lawyer whose practice relied heavily upon
low- to modest-value car wreck cases summarized the situation bluntly:
"Without cash flow coming in you can't pay your bills and you can't fund
your cases .... We are in a brutal process of some [lawyers] being weeded
out, and I may be one of them." Six months after he was interviewed, this
lawyer was out of business. Other lawyers were more graphic in character-
izing their predicament. One said, "It's Darwinism-survival of the fittest."
For many lawyers, the 1990s were indeed a season of darkness, a winter of
despair.
     We have also described the more optimistic view of the innovators who
are trying something other than just riding out the storm.7 These lawyers
look for opportunities within the changing plaintiffs' market and innovate in
an effort to exploit those opportunities. They explore or develop new mar-
kets for their contingency-fee-based services (such as commercial litigation,
nursing home cases, or new arenas in products liability). They also ex-
periment with different ways of organizing their practices (such as the
creative use of technology), especially with regard to the perennial challenge
of a contingency fee practice-getting clients. The innovators presume that
wherever the market is headed, it will not return to the past. For some of
these lawyers, the 1990s were more a season of light, offering some spring of
hope.
     Building on our earlier work, this Article focuses on the structure of the
Texas plaintiffs' bar in order to present an integrated picture of what was
happening to lawyers at the end of the 1990s. It is based on ninety-six in-


    5. If nothing else, the contingency-fee system and the "one-shot" nature of the client base make
this type of law practice an especially precarious enterprise. A plaintiffs' lawyer must be able to
maintain a steady flow of clients with injuries the civil justice system will compensate adequately at
a cost that will allow the lawyer to make a profit.
    6. See Stephen Daniels & Joanne Martin, "The Impact It Has Had is Between People'sEars:"
Tort Reform, Mass Culture and Plaintiffs' Lawyers, 50 DEPAUL L. REV. 453, 456-82 (2000)
(detailing the effects of tort reform on jury attitudes and awards).
   7. Daniels & Martin, supranote 2, at 167-78.




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depth interviews with Texas plaintiffs' lawyers and a large-scale mail survey
with 554 useable responses! It takes as its starting point the premise that all
lawyers in private practice must make a profit if they are to continue offering
legal services. 9 Profit is the minimum requirement for achieving anything
else a law practice hopes to accomplish. In other words, everybody must
first generate enough business and income from it to "keep the lights on."
The challenge for many plaintiffs' lawyers at the end of the 1990s was
keeping the lights on.'0
      Our discussion is divided into three broad parts. The first outlines the
structure of the Texas plaintiffs' bar. The Texas plaintiffs' bar is not a
monolithic structure or one with a small handful of well-known "heavy
hitters" and a mass of anonymous "plodders." It is a complex hierarchy, and
some knowledge of it is necessary to understand what was happening to
lawyers' practices at the end of the 1990s, because practices differ according
to position in that hierarchy.
      The second Part describes plaintiffs' lawyers' perceptions of the
changes in the market environment in which they work-their "common
sense" notion of things. It is necessary to know something of this "common
sense' because it is what plaintiffs' lawyers rely upon in trying to figure out
how to "keep the lights on." Following a logic that ties aggressive political
and public relations campaigns for tort reform to changes in jury behavior,
and then to changes in "going rates," these lawyers conclude that their
working environment has substantially changed for the worse.
      The third Part examines lawyer reactions to those changes and how
those changes affect their practices. It also takes into account alternative
explanations for changes in practices, such as increased competition. Our
findings describe what may be a contracting plaintiffs' lawyers' market in
which some lawyers are facing dark and uncertain futures, while others are
facing brighter ones. As a general proposition, whether one is going "direct
to heaven" or going "direct the other way" (as Dickens might say) seems to
depend on where in the structure of the Texas plaintiffs' bar one is situated.

I.     The Texas Plaintiffs' Bar

A. The Size and Basic Structure of the Plaintiffs' Bar
      The size of the Texas plaintiffs' bar is hard to know with precision, in
part because there is no simple definition of what a plaintiff's lawyer is. Is it


     8. For a more detailed discussion of our methods, see the Methodological Appendix, infra Part
V.
    9. Daniels & Martin, supra note 2, at 151-55.
    10. See Joseph Calve, Poured Out, TEXAs LAW., Dec. 16, 1996, at 1 (describing the financial
difficulties of many Texas personal injury lawyers).




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a lawyer who is certified in personal injury trial law by the Texas Board of
Legal Specialization? If so, the plaintiffs' bar will be relatively small-
fewer than 1700 in 2000.11 Is it simply a lawyer who is a member of the
Texas Trial Lawyers Association (TTLA) or the Association of Trial
Lawyers of America? Is it a lawyer who does only plaintiffs' work on a
contingency fee basis, or is it a lawyer who does any plaintiffs' work at all?
      We are interested in lawyers for whom plaintiffs' work done on a
contingency fee basis accounts for a substantial part of their business. For
our mail survey (conducted in late 1999 and early 2000), we drew from a list
of 5284 Texas lawyers provided by the TILA in late 1999. What makes the
list especially useful for our purposes is the fact that it included more than
just TTLA's current members. It included current TrLA members, former
'ITLA members, and lawyers identified by TILA as "prospects"-lawyers
thought by its members on the basis of their local knowledge to be practicing
at least some amount of plaintiffs' work and who have never been TrLA
members. While not an ideal source, it represents the best available estimate
and list of the population of Texas plaintiffs' lawyers at the end of the
 1990s 12
      More specifically, we limited our study to lawyers for whom plaintiffs'
work done on a contingency fee basis accounted for at least 25% of their
caseload at the time of our survey or at some time during the five previous
years. Table 1 presents data, as reported by our survey respondents, on the
percentage of current business made up of plaintiffs' work. It shows that the
bulk of the lawyers in our survey are not simply lawyers who occasionally do
 some plaintiffs' work; they are plaintiffs' specialists who devote most of
their practices to such work. The largest percentage (131, or 23.7%) does
plaintiffs' work exclusively, and only one-quarter of them have more than
 50% of their business in something other than plaintiffs' work. For the
lawyers we interviewed, none devoted less than 50% of their caseload to
plaintiffs' work, and some reported a concentration as high as 90%. In short,
it makes sense to talk not only of an identifiable Texas plaintiffs' bar, but to
 talk of one comprised of lawyers who have chosen to specialize in this
particular legal market.




   11. See CAROL L. CANNON & KEVIN J. PRIESTNER, STATE BAR OF TEXAS, STATISTICAL
PROFILE OF THE STATE BAR OF TExAS MEMBERSHIP (2000-01) 5 (June 2001), available at
http:llwww.texasbar.comlmembers/buildpractice/researcb/profile.pdf (last visited Apr. 25, 2002).
The profile reported 1660 Texas lawyers certified in personal injury law. Id.
     12. According to the State Bar of Texas, there were 61,662 in-state lawyers practicing in 2000.
The TrLA list, then, represents 8.6% of the in-state lawyers in 2000. Even if we assume that this
list misses some lawyers who consider themselves to be plaintiffs' lawyers, the percentage of Texas
lawyers who are plaintiffs' lawyers is unlikely to be more than 10% or 11% of in-state lawyers. Id,
at 6 n.3.




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                                        TABLE I
              PLAnMiFFS' WORKAS CURRENT PERCENT OF CASELOAD (n=552)
Percentile            10th           25th            50th            75th         90th
%Plaintiffs' Work    25.0%           50.0%           90.0%           99.0%        100%
Mean: 74.47% Median: 90.0% Mode: 100% (n=131)

      Texas plaintiffs' lawyers do not see themselves as fungible. There is a
structure and a hierarchy within the plaintiffs' bar, and the best way in which
to describe this structure is to categorize lawyers on the basis of the value of
their average contingency fee case. Doing so will not capture everything that
is important, such as a lawyer's reputation for professionalism and integrity,
but it does seem to capture the most important indicator in the eyes of
plaintiffs' lawyers of where someone is situated in the hierarchy. For
instance, in talking about the unsavory reputation of a well-known Texas
plaintiffs' lawyer with a record of winning big cases, a Houston lawyer said,
"He's a good lawyer .... I don't know if he chased that airplane or not
[getting clients], but if I was on that airplane, I'd want him to be my lawyer.
If I walk out of here and get hit by a truck... then I would like to have X
take it [the case]." One way to illustrate this attitude is to look at what
factors draw referrals of big cases to some lawyers rather than others. As one
lawyer said:
      In order to get that big case, what's going to happen is some lawyer is
      going to bring it to you. And the reason he brings it to you is because,
      at least in his mind, you have a reputation for being equipped to deal
      with it, and equipped to get a good result, which is important to him
      because he's going to get a referral fee. And so what you'll have, I
      think, in just about any community... is a handful of what everybody
      considers to be the "heavy hitters." The ones that for some reason
      always end up with the big cases .... And the reason one of those
      guys gets it is because it is taken to him or her by some other lawyer
      because of their reputation. The legal community has to see the firm
      in such a way that they believe the firm will get a good result and can
      finance the case .... People have to know you have the money.
When it comes to defining the pecking order, then, it is the size of the cases
successfully handled that counts most.
      Table 2 presents data on the average value of the contingency fee cases
handled by the survey respondents over the twelve months prior to the
survey. While the mean is just over $1 million, 90% of the averages are
under that amount. The median value is a far more modest $37,000, which
indicates that most plaintiffs' lawyers' practices are not built on big, complex
cases involving millions of dollars. They are built on more modest cases.




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                                              TABLE 2
     VALUE OF AVERAGE CONTINGENCY FEE CASE            12 MONTHS PRIOR TO SURVEY (n=546)
Percentile                 10th            25th            50th            75th             90th
Case Value               $5,000          $15,000         $37,000         $200,000       $1,000,000
Mean: $1,002,181 Median: $37,000

      Since we want to describe the Texas plaintiffs' bar in terms of its
structure, a straightforward way of doing so is to categorize lawyers by
quartiles calculated on reported average case value. The first group, 138
lawyers, includes those with average case values of $14,999 or less. The
second group, 141 lawyers, includes those with average case values between
$15,000 and $37,000. The third group, 134 lawyers, includes those with
average case values between $37,001 and $200,000. The last group, 139
lawyers, includes those with average case values greater than $200,000. We
will label lawyers with average case values below the median as "bread and
butter" lawyers and divide them into two groups representing the first two
quartiles-bread and butter 1 (BB1) and bread and butter 2 (BB2). The
lawyers above the median we call "heavy hitters," and we divide them into
two groups representing the third and fourth quartiles-heavy hitter 1 (HH1)
and heavy hitter 2 (HH2).
      A closely related aspect of a lawyer's place in the plaintiffs' bar
structure is the geographic market in which he works.13 The variation in
geographic scope of markets follows the average case size. In the survey we
asked lawyers to place their practices into one of three simple geographic
markets: local, meaning most cases come from the county in which a
lawyer's principle office is located or from adjacent counties; regional,
meaning a substantial number of cases come from one or more Texas
counties non-adjacent to the principle office site; and state-wide/national,
meaning a substantial number of cases come from all over Texas or from
other states. Table 3 shows the variations among the four groups of
lawyers.' 4 As we go up the hierarchy, geographic markets become broader in
scope. Few lawyers in the lower two groups work statewide or beyond.


    13. Throughout this Article we will refer to Texas plaintiffs' lawyers in the masculine because
they are overwhelmingly male. Among the respondents to our survey, 85.7% are male. In 2000,
73.0% of members of the State Bar of Texas were male. Id. at 2.
    14. Throughout this Article we use simple tests of statistical significance when we present data
on relationships and differences, like those involving geographic scope of market and a lawyer's
place in the plaintiffs' bar hierarchy. Such tests are used to determine whether the observed
relationships and differences among respondents to a survey like ours actually reflect the larger
population, or whether the observed relationships and differences could have happened by chance.
What is important are those relationships and differences among the respondents to our survey that
are not likely to have occurred by chance. The associations found in Table 3 are statistically
significant using the standards typically found in social science research, meaning that they are
unlikely to have occurred by chance. For an explanation of tests of statistical significance, see the
discussion of the Texas plaintiffs' lawyers survey in the Methodological Appendix, infra Part V.




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Their practices may be so localized that they concentrate on a particular
neighborhood or ethnic community. A San Antonio lawyer provides an
example: "I think over time I've had a good many calls from people simply
saying, 'I live in this area' or 'I pass your office,' et cetera. So I'm trying to
                                                                  5
build something more in terms of tapping the neighborhood."

                                           TABLE3
                                    GEOGRAPHIC MARKMS
                     Bread & Butterl     Bread & Butter2     Heavy Hitterl      Heavy Hittcr2
                         (n-138)             (n=141)            (n=134)               (n=139)
  % Local                  81.7                68.9               52.2                 32.4
  % Regional               16.8                27.3               31.3                 28.8
  % State/Nation            1.5                 3.8               16.4                 38.8
chi square 115.010, sig. .000

     The heavy hitters are less likely to be so localized. HH1 lawyers, for
instance, try to expand their markets by developing geographic niches. They
target particular parts of the state either because they see a market
opportunity or because they believe juries are more pro-plaintiff. For
instance, a medical malpractice firm in Central Texas has targeted East Texas
and the Panhandle as market opportunities. One of the partners said:
     We file a lot of suits and get a lot of cases from the Lubbock/Amarillo
      area [the Texas Panhandle] and from the Jasper/Lufkin area [East
     Texas] and we don't work too much down in South Texas .... Of
      course, Lubbock has got a big medical community up there and things
     happen. The East Texas area has terrible medical care period, so bad
     things happen there.
A San Antonio lawyer talked about a regional practice that is based, in part,
on places with friendlier juries. He described his geographic market as "San
Antonio and the counties within fifty or one hundred miles, except we do a
bunch of border work which is Eagle Pass, Del Rio, and Laredo. Because
there aren't very many lawyers there and those are very good counties for
plaintiffs." Another San Antonio lawyer works in the same area for much the
same reason: "It's still a decent place to try a case."
     Lawyers handling larger, more complex cases may need an even
broader geographic market in order to find enough of the cases in which they
specialize. An HH2 lawyer located in San Antonio described his geographic
market as, "Well, it's Texas." At the extreme end of this spectrum, some of


    15. A lawyer whose practice concentrated for years on one minority area in Dallas provides
another example. He spoke with some pride about his commitment to the community: "Most of my
clients are minority. The reason that is so is because it has always been so. I represented
granddaddy. He sent his kids and his relatives and his friends, and I represented them. Now, I'm
working on the grandkids."




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these lawyers have no real geographic boundaries to their market. Said one
about his caseload: "The pharmaceutical is national, and aviation is
national." A lawyer specializing in serious injuries suffered by oil rig
workers has cases from almost anywhere, even those involving injuries
occurring in the North Sea.

B. The Lawyers
     The examples above all help to illustrate the differentiation and
hierarchy in the Texas plaintiffs' bar. To flesh out the structure a bit more
we will describe some key practice characteristics of the lawyers in each of
our four groups, and we will rely upon Table 4, which presents data on those
characteristics for each group. The data are organized to allow easy
comparisons among the four groups.

     1. The Bread & Butter 1 Lawyer.-This is the lawyer at the bottom of
the plaintiffs' bar hierarchy, for whom the average value of contingency fee
cases is quite modest (see Table 4). Among the four groups of lawyers, he is
the most likely to be a solo practitioner and to work in a local geographic
market (see Table 3). 16 While his practice is almost exclusively plaintiffs'
work done on a contingency fee basis, it is less concentrated on this type of
work than the practices of lawyers in the other three groups.
      As Table 4 shows, the BB 1 lawyer has the highest volume of open
cases, but again these are cases of lower value. While he does not get
substantially more calls than lawyers in the other groups, he does sign a
higher percentage of those calls to a contingency fee contract. 17 The largest
percentage of the BB1 lawyer's cases come through referrals from former
clients. As a San Antonio solo practitioner described it, "you represented
somebody, did them a good job and their brother or sister, friend at church
has an accident, and they say, my lawyer did a good job, call him," Unlike
the other three groups of lawyers, the second largest percentage of cases for
this group comes from advertising (see Table 4, row labeled "% of Cases
From"). Among all forms of advertising, the largest percentage of business
comes from the Yellow Pages (14.8% of cases). 18 Lawyer referrals, though
tied with advertising for the second largest source of business, are less


    16. Of all Texas lawyers in private practice, 36% are solo practitioners, 24% work in firms of
two to five attorneys, and 18% work in firms of more than 60 attorneys. CANNON & PRIESTNER,
supranote 11, at 3.
    17. In his study of Wisconsin lawyers who handle contingency fee cases, Herbert Kritzer found
that "lawyers reported accepting cases from a mean of 46% (median 45%) of the potential clients
who contacted them." Herbert M. Kritzer, Contingency Fee Lawyers as Gatekeepers in the Civil
Justice System, 81 JUDICATURE 22, 24 (1997).
    18. For a comparative picture focusing on Wisconsin lawyers, see Herbert M. Kritzer & Jayanth
K. Krishnan, Lawyers Seeking Clients, Clients Seeking Lawyers: Sources of Contingency Fee Cases
and Their Implicationsfor Case Handling, 21 LAW & POL'Y 347, 350-62 (1999) (finding that
contingency fee lawyers get most of their business from referrals rather than from advertising),




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important for the BB1 lawyer compared to the lawyers in the other three
groufps. This is indicated in Table 4 by the small percentage of BB1 lawyers
who Use mailings to other lawyers as a way of generating business. 19

                                              TABLE4
                          PRACTICE CHARAcrERiTCS AND PLACE IN THE MERARCHY
                          - 2BBIlle                      A-=38 -'I
                                                             fii~
                                                          1HCn             H                      Cn'tl39)
                         Mean: S6,828"         S22,863*                $76.515*              $3.8Ml
Average Case Value       Median: $7.250"*      S25.000**               S71.000**             S750K**
% Solo Practitioner      55.8%                 45.9%                   32.8%                 15.8%

%2-5 Lawyers in Firm 35.5%                     40.9%                   45.5%                 50.5%
                     70.0%*                    72.5%*                  73.3%*                82,0%*
% Plaintiffs' Work   85.0%**                   80.0%**                 90.0%**               95.0%**
                         116.2"                49.5*                   48.6*                 482*
Number of Open Cases     45.0**                35.0**                  25.0**                20.0"*
Number of Calls per      21.9"                 18.3"                   18.5'                 16.8'
Month                    12.5"*                10.0**                  10.0**                8.0"0
% of Calls Signed to     35.1%*                27.0%*                  26.8%*                17.9%*
Contract                 30.0%**               20.0%**                 20.0%**               10.0%**
                         Clients: 36.4%
% of Cases From          Advertis'g: 20.0%     Clients: 34.1%          Lawyers: 42.2%        Lawyers: 553%
(top two by %)           Lawyers: 20.0%        Lawyers: 31.9%          Clients: 26.2%        Clients: 18.2%
% Who Advertise          72.5%                 71.2%                   65.7%                 71.2%
(top two for those who   YellowPage:60.9%      YellowPage: 6.8%        YcllowPage:50.7%      YellowPage:48.9%
advertise)               Internet: 18.1%       Internet: 21.1%         Internet 20.1%        Intemet:28.1%
% Using Mail to Other
Lawyers                  2.9%                  6.5%                    6.7%                  252%
                         Auto: 51.2%           Auto: 40.0%             Auto: 27.1%           Med Mal: 20.7%
% of Caseload (top       Domestic: 7.7%        Domestic: 7.3%          Med Mal: 13.1%        Auto: 14.7%
three by %)              Criminal: 4.8%        Med Mal: 6.9%           Products: 8.8%        Commercl: 12.9%
% of Caseload Medical
Malpractice              3.2%                  6.9%                    13.1%                 20.7%
% Handling No Auto
Cases                    7.4%                  8.8%                    18.2%                 44.9%
%Certified               23.9%                 39.4%                   34.1%                 40.1%
%Who Claim a
Specialization         Auto: 47.8%             Auto: 41.3%             Auto: 37.3%           Med Mal: 31.3%
(top two by %)         Litigation: 21.0%       Litigation: 26.8%       Litigation: 26.1%     Litigation: 26.9%
                       Settle Before Filing:   Settle After
                       51.2%                   Filing/Before Trial-    Settle After          Settle After
                       Settle After            33.9%                   Filing/Before Tria:   Fiing/Before Tria:
% of Cases Disposed by Fding/Before Trial:     Settle Before Filing:   41.3%                 43.3%
(top two by %)         22.4%                   31.6%                   Mediation: 31.5%      Mediation: 40.7%
% Disposed by
VerdictrTrial        6.7%                      6.1%                    8.5%                  12.1%
Net Income from Law
Practice             $100.000-124,999          S100.000-124.999        125.000-149.999       S 150.000-199.999
'designates mean **designates median




    19. In contrast to lawyers in the other groups, the BBI lawyer is the most likely to use
television advertising-13% do.




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      The BB1 lawyer handles simple, mundane issues. Table 4 shows, for
instance, that a very small percentage of the BB1 lawyer's caseload is made
up of medical malpractice cases. A number of these lawyers said they pri-
marily handle "vanilla car wreck cases," meaning low-value cases without
serious injury or death that will not go to court. In fact, the BB1 lawyer's
practice is built on automobile accident cases. This is perhaps best illustrated
in Table 4, which shows that just over one-half of the BB 1 lawyer's caseload
is made up of such cases (row labeled "%of Caseload"), more so than for the
other three groups. 20 As one such lawyer described his practice, "We do
anything from car wrecks to on-the-job injuries as long as its not workers'
compensation-we exclude that .... Probably on a percentage basis, 70%
of my cases are car wreck .... It can be as small as $2,000." The only other
area accounting for 5% or more of his docket is domestic relations. If he
claims any particular specialization within the broad area of a plaintiffs'
practice, it is most likely in automobile accident cases-more so than for the
other three groups (Table 4, row labeled "%Who Claim a Specialization").
The BB 1 lawyer is the least likely to be certified as a specialist by the Texas
Board of Legal Specialization. 21
      In short, the BB 1 lawyer is a plaintiffs' practice generalist who handles
relatively simple, mundane cases in somewhat greater volume than his
counterparts higher in the plaintiffs' bar structure. He takes very few of his
cases all the way to a court verdict, and consistent with the nature of his
caseload, just over one-half of his cases are settled before filing. The next
largest percentage is settled after filing, but before trial. His net income from
his legal practice fell between $100,000 and $124,999.22

    2. The BB2 Lawyer.-Some differences begin to appear as we move up
the hierarchy to the BB2 lawyer. Table 4 shows that he is less likely to be a
solo practitioner than the BB 1 lawyer, but more likely than the lawyers in the
two groups above him in the hierarchy. Like the BB 1 lawyer, his practice is
almost exclusively plaintiffs' work done on a contingency fee basis, but
Table 3 shows that his geographic market is not as narrowly local as that of
the BB 1 lawyer.



   20. Table 4 shows that only 7.4% of BB 1 lawyers said they handle no auto cases (row for "%
Handling No Auto cases"). This is the smallest percentage among the four groups of lawyers.
   21. As a point of reference, the State Bar's statistical profile reports that only 9% of the
membership is certified by the Texas Board of Legal Specialization. See CANNON & PRIESTNER,
supra note 11, at4.
   22. For 2000, the State Bar reported a median income of $109,282 for all lawyers in private
practice in Texas. DEP'T OF RESEARCH & ANALYSIS, STATE BAR OF TEXAS, 2001 PRIVATE
PRACTITIONER INCOME REPORT 4, available at http:llwww.texasbar.com/memberslbuildpractice/
research/2001PPIR.pdf (last visited Apr. 25, 2002). A figure is reported for plaintiffs' lawyers, but
there were only 13 respondents for this category. id. at 14.




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      This lawyer has fewer open cases than the BB1 lawyer, meaning a
smaller practice. He receives fewer calls per month from potential contin-
gency fee clients than the BB1 lawyer, and a smaller percentage of those
calls result in a signed contingency fee contract. Like the BB1 lawyer, the
largest percentage of the BB2 lawyer's cases come through referrals from
former clients. Unlike the BB1 lawyer, however, the BB2 lawyer gets almost
an equal percentage of cases not from advertising, but from lawyer referrals.
This is a conscious strategy. A younger BB2 lawyer from Austin said: "My
partner and I have established relationships with about eight or ten firms
around town that regularly send us cases, and we have both made a bit of an
effort to promote ourselves within the community and among lawyers."
Consistent with these efforts, the BB2 lawyer is a bit more likely to use
mailings to other lawyers in the effort to attract referrals.
     Like the BB1 lawyer, the largest percentage of the BB2 lawyer's
caseload is made up of automobile accident cases. The percentage, however,
is not as large. The BB2 lawyer is a bit more likely to try handling more
complex matters-like medical malpractice-than is the BB1 lawyer. 3 If
the BB2 lawyer claims any particular specialized expertise within the broad
area of a plaintiffs' practice, it is most likely in automobile accident cases
(although the percentage is lower than that for BB1 lawyers). Litigation is
the next most likely specialization (at a higher percentage than the BB1
lawyer). He is not likely to be certified by the Texas Board of Legal
Specialization, but more likely than the BB 1 lawyer.
     The BB2 lawyer takes very few of his cases all the way to a verdict.
Unlike the BB 1 lawyer, however, the majority of his cases are not concluded
by a settlement before filing. The largest percentage is settled after filing but
before trial; his practice, while mundane, is not as commonplace as the BB 1
lawyer's. Regardless, the subtle differences between BB1 lawyers and BB2
lawyers do not translate into a higher net income. Like the BB1 lawyer, the
BB2 lawyer's net income from his legal practice fell between $100,000 and
$124,999.

     3. The HHJ Lawyer.-The HH1 lawyer is different, in several key
respects, from the lawyers in the lower two groups of the plaintiffs' bar
hierarchy. As Table 4 shows, his cases are worth much more. He is less
likely to be a solo practitioner and more likely to work in a small firm of two
to five lawyers. While his practice is almost exclusively plaintiffs' work
done on a contingency fee basis, Table 3 indicates that he is less likely to



   23. The BB2 lawyer is somewhat more likely than the BBI lawyer to handle medical
malpractice cases (53.7% do not handle them, compared to 65A% of BBI lawyers), commercial
cases (71.3% do not handle them, compared to 80.1% of BBI lawyers), and products cases (59.6%
do not handle them, compared to 69.9% of BB1 lawyers).




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work primarily in a local geographic market than either of the BB lawyers
and more likely to work in a statewide or national market.
      The HH1 lawyer's practice is modest in size. He may have as many as
fifty open cases, but probably fewer, and he receives an average of fewer
than twenty calls per month from potential clients. Only a minority of those
calls results in a signed contingency fee contract, the rate being about the
same as that for BB2 lawyers and lower than that for BB 1 lawyers. In con-
trast to both BB1 and BB2 lawyers, the largest percentage of the HH1
lawyer's cases comes from lawyer referrals. In fact, some of these referrals
may come from lawyers lower in the plaintiffs' bar hierarchy. For instance,
one HH1 lawyer said:
      There are plaintiffs' lawyers that may not want to get into litigation.
      The gentleman who was just here talking to me is a friend from law
      school. He'll take a case until he has to file suit on it. Once he files
      suit, he sends it to us. A lot of lawyers are like that. They don't want
      that. They want to see if they can flip them with the insurance
      company and get them done. If it involves anything more, they will
      get rid of them. We have a ton of referring lawyers just like that.24
Consistent with a greater reliance on lawyer referrals, the HH1 lawyer is
more likely to use mailings to other lawyers as a marketing tool and less
likely to rely on advertising, especially in the Yellow Pages.
      Again, the largest percentage of this lawyer's caseload is made up of
automobile accident cases, but at a rate much lower than that for the BB 1 and
BB2 lawyers. Cases involving more complex matters, like medical mal-
practice and products liability, comprise a larger percentage of this lawyer's
business than is the case for BB1 or BB2 lawyers.25 In short, the HH1
lawyer handles fewer simple, mundane issues and is more likely to handle
more complex matters. If he claims any particular specialized expertise
within the broad area of a plaintiffs' practice, it is most likely in automobile
accident cases, but again at a rate lower than that reported for BB 1 and BB2
lawyers. Like them, however, he is not likely to be certified by the Texas
Board of Legal Specialization.
      The HH1 lawyer takes very few of his cases all the way to a verdict, but
he is slightly more likely to do so than BB 1 or BB2 lawyers. Unlike the BB 1
lawyer, the majority of his cases are not concluded by a settlement before
filing. Consistent with a caseload less reliant on simple, mundane cases, the


     24. This is reminiscent of the BB1 lawyer-just over one half of his cases are settled before
filing (51.2%). See Table 4.
     25. Compared to BB 1 and BB2 lawyers, criminal (3.9%) and domestic relations cases (3.2%)
are less important for the HH1 lawyer. A larger percentage of HH1 lawyers do not handle any of
these cases. Of HH1 lawyers, 83.3% handle no criminal cases and 84.8% handle no domestic
relations cases. By comparison, 77.2% of BB1 lawyers do not handle any criminal cases and 65.4%
do not handle domestic relations cases. For BB2 lawyers, the percentages are 77.2% and 70.6%.
Most HH1 lawyers (53.4%) also say they handle at least some medical malpractice.




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largest percentage is settled after filing, but before trial, and mediation is
more important for the HI1 lawyer. The differences between the HH1
lawyer and the BB1 and BB2 lawyers do translate into a higher net income.
His net income from his legal practice fell between $125,000 and $149,999.

     4. The HH2 Lawyer.-The HH2 lawyer is different from those in the
lower echelons of the plaintiffs' bar hierarchy, and in some respects he is
also different from the HI1 lawyer. He is unlikely to be a solo practitioner
(see Table 4). Rather, he is likely to work in a small firm of two to five
lawyers. His practice is almost exclusively plaintiffs' work done on a con-
tingency fee basis, more so than lawyers in any of the other groups. Table 3
shows that he is the least likely to work primarily in a local geographic
market and the most likely to work in a statewide or national market. One of
these "heavy hitters" described his practice as "pretty well statewide... in a
two-week period I tried three cases. I tried a legal malpractice case for the
plaintiff... in Dallas; I tried a personal injury case in Amarillo involving
two pick-ups that came together on a country road; and I tried an intentional
infliction of mental distress case in Austin .... these were big cases."
                                                   All
      The HH2 lawyer's caseload is modest in size. He may have fewer than
fifty open cases. He receives the lowest number of calls from potential
clients per month and reports signing the lowest percentage to a contingency
fee contract. He can do this because the average value of his contingency fee
cases is far larger than the values for the other groups. Over one half of the
HH2 lawyer's cases come through referrals from other lawyers,2 6 and he may
invest heavily in cultivating lawyer referrals and in marketing himself and his
firm. Said one HH2 lawyer:
      Last year ... spent about $80,000 on programs that were designed
                   we
      to touch our former clients--our referring lawyers-and make sure
      that we were, you know, they were sure that we wanted their
      business ....If my referring lawyers go away, I'm in trouble ....
      I'll always have to be thinking about new referring lawyers ....
      That's why we're spending a lot of time, energy, and money on
                 We
      them .... have this year a new business development program in
      which each lawyer sat down with... our consultant and said, okay,
      where am I most likely to be able to improve my business
      sources .... We've been working to tailor a new business
      development program around each lawyer [in the firm] and then a
      couple of programs around the partners, like we're going to do a little
      golf tournament with some of tried-and-true referring lawyers. We're


   26. For HH2 lawyers with highly specialized practices, almost all of their business may come
from lawyer referrals. For instance, one Houston medical malpractice specialist said that "probably
90% of our cases are from other lawyers." The lawyer who is quoted above about his three trials in
two weeks said that "over 75% of my practice was and is referrals from other lawycrs."




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      mentioning them in2 7 newsletter .... They really get stroked for
                            our
      sending us business.
      Consistent with this, as Table 4 shows, the HH2 lawyer is by far the
most likely to use mailings to other lawyers as a way of generating
          a
business.2 As we might expect, referrals from former clients are much less
important for the HH2 lawyer. Advertising is even less important, producing
only 6.9% of cases. He is the most likely among the four groups of lawyers
to use the Internet for marketing purposes, which is consistent with a greater
                                          29
reliance on lawyer referrals for business.
      Unlike lawyers in the other three groups, this lawyer does not have the
largest percentage of his caseload in automobile accident cases. In fact, as
Table 4 shows, over 40% of HH2 lawyers handle no automobile cases. The
largest percentage of his caseload is made up of medical malpractice cases,
followed by automobile cases and commercial matters. Cases that are
important for lawyers in the lower echelons of the hierarchy comprise only a
small proportion of this lawyer's business. Criminal and domestic relations,
for example, each comprise less than 2% of his caseload. Over 90% of 14112
lawyers handle no criminal work (91.9%) and no domestic relations work
(91.2%).30 The HH2 lawyer, in short, handles very few simple, mundane
issues, focusing instead on a smaller number of more complex and higher
value cases. If the HH2 lawyer claims any particular specialized expertise
within the broad area of a plaintiffs' practice, it is most likely in medical
malpractice, rather than automobile. The next most likely reported area of
specialization is litigation. While he, too, is not likely to be certified by the
Texas Board of Legal Specialization, the HH2 lawyer is the most likely
among the four groups to be certified.
      The HH2 lawyer takes few of his cases all the way to a verdict, but is
more likely to do so than the lawyers in any of the other three groups.
Consistent with a docket made up of more serious, complex cases, few of his
cases are concluded by a settlement before filing. The largest percentage is


    27. This lawyer's description of his firm's plans for getting business is n excellent illustration
of how different the practices of HH2 lawyers are from those of BB1 lawyers.
    28. A Dallas medical malpractice specialist sent his marketing brochure to every lawyer in
private practice in Texas. A Houston medical malpractice specialist, more modestly, sent his
brochure to every lawyer practicing in areas from Houston to San Antonio and south.
    29. The lawyer who relies heavily on client referrals for business, of course, is not likely to
want to use something as impersonal as the Internet. Instead, he does things that keep his name in
the minds of his former clients, like sending birthday or holiday cards. In contrast, the HH2
attorney who relies on lawyer referrals wants information on his firm to be readily available to other
lawyers (whether they know the HH2 personally or not) who are looking to refer a case to a firm
with a successful track record.
    30. In comparison, the percentages for BB1 are 77.2% not handling any criminal cases and
65.4% not handling domestic relations cases. For BB2, the percentages are 77.2% and 70.6%. In
contrast, only 58.8% of HH2 lawyers handle no commercial cases, compared to 80.1% for BB1I and
71.3% for BB2; and 76.5% of HI-I2 lawyers handle no mass tort cases compared to 92.6% for BBI
and 88.2% for BB2.




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settled after filing, but before trial or through mediation. The differences
between the HH2 lawyer and those in the other three groups translate into a
higher net income. His net income from his legal practice fell between
$150,000 and $199,999.
      As we move up the hierarchy within the plaintiffs' bar, we find
important differences in lawyers' practices. Practices in the higher echelons
are very different than those in the lower echelons. How a lawyer gets his
business changes, moving from word-of-mouth client referrals to lawyer
referrals (and the use of marketing rather than advertising). Those in the
lower echelons work mostly in a consumer market in which the person
bringing the case to the lawyer is the injured party. Those in the higher
echelons work mostly in a referral or a lawyer's market in which the person
bringing the case to the lawyer is another lawyer-the referring lawyer. As
we go from a consumer's market to a referral or lawyer's market, the
geographic scope of a lawyer's practice broadens. The nature of business
also changes, away from the simple, mundane and low-value cases to the
more complex and higher value cases, and away from the mainstay of
automobile cases to those involving more complex issues like medical
malpractice, products liability, and commercial matters. As we move up the
hierarchy, the lawyer receives fewer calls from potential clients on a monthly
basis and signs fewer of those to a contingency fee contract. The lawyer
becomes choosier about the cases he will take. And he is more likely to take
a case to trial. As we will see in the next section, perceptions of and
judgments about changes in the market environment also vary by where in
the hierarchy a lawyer is situated. In Part Ill, we will see that the effects
those changes have on lawyers' practices vary in a similar way.

11.      Lawyers' Perceptions of Changes In The Market Environment
      Plaintiffs' practice has always been a precarious enterprise because the
market in which these lawyers work is an inherently unstable one. The one-
shot nature of their clients and an almost exclusive reliance on the
contingency fee makes plaintiffs' lawyers' practices especially sensitive to
changes in the law-both the law on the books (the formal law) and the law
in action. Most basically, the law on the books creates, alters, or obliterates
causes of action, and causes of action, in turn, define substantive markets in
which plaintiffs' lawyers choose to work.3 t Changes in the law may provide
new or enhanced opportunities for some plaintiffs' lawyers, but they can also
put others out of business. 32 For instance, a number of lawyers we
interviewed (BB1 lawyers whose practices are built on low-value automobile

      31. See Daniels & Martin, supra note 2, at 155-67; Jerry Van Hoy, Markets and Contingency:
How Client Markets Influence the Work of Plaintiffs' Personal Injury Laityers, 6 INT'L J. LEGAL
PROF. 345, 345 (1999) (arguing that plaintiffs' attorneys seek out clients based on markets that are
defined by geography and substantive specialization).
   32. See Daniels & Martin, supra note 2, at 155-57.




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cases) said that a change to no-fault automobile insurance in Texas would
                                  33
probably destroy their practices.
      Also important in shaping the practices of plaintiffs' lawyers is the law
in action or the broader legal environment in which plaintiffs' lawyers work.
Here we are talking about the processes, rules, and "going rates" that define
the ways in which most injury claims are handled. Few of these matters go
to trial. Instead, most are handled through informal processes that lawyers
and insurance companies have developed. 34 These processes have their own
standards or "going rates" for valuing cases which, in turn, are usually tied to
what juries decide in the few cases that do go to trial.35
      Lawyers may build their practices around these informal settlement
processes and "going rates" for particular types of cases. For example, a
lawyer may have a high-volume practice concentrating on lower value
automobile cases-a practice built on a particular set of informal processes
for settling cases without trial (less risk and less expense) and particular
understandings about how much and what kind of damages can normally be
expected for certain situations ("pain and suffering" being x times
demonstrated medical expenses).3 6 Changes in these informal processes and
going rates can have a serious impact on lawyers' practices. Insurance
companies, for instance, may see that plaintiffs are winning fewer of the
cases that go to trial or that juries are awarding less in those that do. As a
result, the insurance companies may take a much harder position in
negotiating settlements or offer less money to plaintiffs. The practical effect
of such a change is that less money will go to the plaintiffs' lawyer, who
relies almost exclusively on the contingency fee. A Dallas lawyer with a
higher volume practice told us, "Two years ago, the average [settlement] per
case was $1,100 more for the routine auto case. That's pretty significant
when you're doing small cases to begin with."
      The 1990s were a challenging time for plaintiffs' lawyers in Texas and
elsewhere, as this practice area became even more precarious because of tort
reform.37 The tort reform effort includes not only the formal legal changes

    33. As one such lawyer put it, "The next shoe to possibly drop is no-fault auto insurance...
and that would put me out of business."
    34. See HERBERT M. KRrrZER, LET'S MAKE A DEAL: UNDERSTANDING THE NEGOTIATION
PROCESS IN ORDINARY LITIGATION 64-66 (1991) (describing how some lawyers and insurance
companies have handled personal injury cases); H. LAURENCE Ross, SETTLED OUT OF COURT: THE
SOCIAL PROCESS OF INSURANCE CLAIMS ADJUsTMENT 5 (2d ed. 1980).
    35. For a discussion of jury verdicts and "going rates," see STEPHEN DANIELS & JOANNE
MARTIN, CIVIL JURIES AND THE POLITICS OF REFORM 62-68 (1995).
    36. For a discussion of the informal processes for settling such cases that includes the use of
such "multipliers," see Ross, supranote 34, at 144-62. It is important to note that such multipliers
are not used rigidly. Rather, they are used to provide a framework in which to settle a matter. Id
at 156-61. In private correspondence regarding multipliers, Herbert Kritzer has emphasized this
point.
    37. See generallyJames Gilbert et al., Overcoming JurorBias in Voir Dire, TRIAL, July 1997,
at 42, 42 (arguing that "potential jurors come to court already influenced by deliberate propaganda
aimed at discrediting plaintiffs and their lawyers").




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made, but also the political and public relations campaigns waged by the
reformers. Since those campaigns did much to affect the broader market
environment surrounding civil litigation, plaintiffs' law ,ers were exposed to
events that affected their practices in numerous ways. 3 ° In the next section
we will examine Texas plaintiffs' lawyers' perceptions of these changes and
their consequences through a comparison of the BB1 lawyers and the HH2
lawyers described in Part I. Examining the lawyers at the "extreme" ends of
the spectrum highlights the importance of structure within the plaintiffs' bar
and shows that changes in the environment can have a differential impact.

A. PerceivedEffects of FonnalLegal Changes
    Tort reform has been a major political issue in Texas since at least the
1980s. 39 Our interest is in the changes that occurred in Texas in the 1990s
and how they may have affected plaintiffs' lawyers and their practices. In
our survey, we asked lawyers whether each of a set of formal legal changes
tied to tort reform and instituted in the mid-1990s, plus the 1991 changes in
workers'      compensation laws, affected their practices positively or
negatively.    °   Tables 5a and 5b present the responses for BB1 and HH2



    38. Daniels &Martin, supranote 6, at476-82.
    39. See Joseph Sanders & Craig Joyce, Off to the Races: The 1980s Tort Crisis and the Lanv
Reform Process,27 HOUS. L. REV. 207,210-14 (1990) (describing mid-1980s tort reform efforts in
Texas).
    40. Specifically, we chose to focus on the six tort reform measures the Texas Department of
Insurance (TD1) focuses on in its evaluations of tort reform for rate reductions purposes, plus the
1991 changes in workers' compensation. According to the TDI:
           In conjunction with the tort reform legislation enacted by the 73rd and 74th Texas
       Legislatures, article 5.131 of the Texas Insurance Code was added by the 74th Texas
       Legislature. Article 5.131 requires that insurers pass through to policyholders the
       savings that accrue from the tort reform legislation on a prospective basis.
           Article 5.131 also requires that the commissioner of insurance hold a hearing on or
       before September 1 of each year to determine the percentage of equitable
       across-the-board reductions in insurance rates required of insurers writing lines and
       sublines of insurance addressed in article 5.131. In addition, article 5.131 requires the
       commissioner to 'assemble information, conduct hearings and take other appropriate
       measures to assess and evaluate changes in the marketplace resulting from the
       implementation of this article and to report findings and recommendations to the
       legislature' ....
           In evaluating the effects of tort reform, TDI staff primarily focused on six pieces of
       tort reform legislation: (1) changes in joint and several liability; (2) changes in
       recovery of exemplary damages; (3) penalties for frivolous lawsuits; (4) changes in the
       Deceptive Trade Practices Act (DTPA); (5) changes in venue requirements; and (6)
       medical negligence reforms (considered only in connection with medical malpractice
       insurance for doctors and hospitals).
TEXAS DEP'T OF INS., REPORT TO THE TEXAS LEGISLATURE: INSURANCE RATE REDucrnONS
RESULTING FROM TORT REFORM (2000), available at http'l/www.tdi.state.tx.usl
commish/lctortrptleg00.html (last visited Apr. 25, 2002). The TDrs website also includes an
excellent short summary of each of these tort reform measures. See TEXAS DEP'T OF INS., 1997
TORT REFORM ROLLBACK INFORMATION: TORT REFORM LAWS (1997), available at
http.//www.tdi.state.tx.us/commish/tortlaws.html (last visited Mar. 30, 2002). For a discussion of




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lawyers, respectively. While none of the changes we tested had a generally
positive effect on the practices of either group of lawyers, not all had an
especially strong negative effect either. For instance, at least three-quarters
of the respondents in these two groups reported that the institution of
sanctions for bringing frivolous lawsuits has had no effect on their
practices. 4 1 The economic realities of a contingency fee practice should
make frivolous lawsuits rare for lawyers like those in our survey who are
plaintiffs' specialists.
      Over one-half of each group also responded that the introduction of
expert witness and bond requirements for filing medical malpractice suits
had no effect on their practices.42 Once again, the economic realities of the
contingency fee may explain this. Medical malpractice cases are expensive
and risky, and as we saw earlier, BB 1 lawyers handle very few of them. As
one BB1 lawyer said about medical malpractice cases, they "are way too
technical .... Easily you can spend $100,000 without blinking., and we
don't have that kind of cash laying around." If a BB1 lawyer were to take a
medical malpractice case, we would assume that he would be careful about
choosing and preparing that case because losing it could put him out of
business. HIH2 lawyers, some of whom are malpractice specialists, do handle
more of these cases. These lawyers can afford to take higher value cases that
cost more to prepare. They screen cases very carefully and take only a small
number of the cases that come to them.

                                             TABLE 5A

                 PERCEIVED EFFEcrs OF LEGAL CHANGES ON LAWYERS' PRACTICES
                                          (BB 1 LAWYERS)

                                                       PERCENT OF RESPONDENTS

Area of Change                           Positive               No Effect              Negative
Workers' Comp (n=132)*                    5.3%                   19.7%                   75.0%
Punitive Damages (n=131)*                 2.3%                   47.3%                   50.4%
Medical Malpractice (n=131)                9.9%                  52.7%                   37.4%
DTPA (n=129)                               5.4%                  46.5%                   48.1%
Venue (n=129)*                             2.3%                  57.4%                   40.3%
Joint and Several (n=131)*                 5.3%                  37.4%                   57.3%
Frivolous Suits (n=131)                    7.6%                75.6%              16.8%
* indicates that the difference in responses between BBI lawyers and 12 lawyers are statistically
significant at .05 or better.



the 1991 workers' compensation changes, see generally Tony Korioth, Workers' Compensation
Law, 45 Sw. L.J. 697 (1991).
    41. There is no statistically significant difference in the responses for the two groups of lawyers
for this question (chi square=4.204, sig. .122).
    42. There is no statistically significant difference in the responses of the two groups to this
question (chi square=1.233, sig. .540).




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                                             TABLE5B
               PERcEiVED EFFECTS OF LEGAL CHANGES ON LAWYERS' PRACTICES
                                     (HH2LAWYERS)
                                                     PERCENT OF RESPONDENTS
Area of Change                          Positive              No Effect               Negative
Workers' Comp (n=139)*                    5.0%                  46.0%                   48.9%
Punitive Damages (n=139)*                7.2%                   24.5%                   68.3%
Medical Malpractice (n=136)              5.9%                   58.1%                   36.0%
DTPA (n=136)                             4.4%                   45.6%                   50.0%
Venue (n=135)*                            6.7%                  31.9%                   61.5%
Joint and Several (n=139)*               5.6%                   13.7%                   80.6%
Frivolous Suits (n=139)                     5.0%       84.9%             10.1%
* indicates that the difference in responses between BBI lawyers and HH2 lawyers arc
statistically significant at .05 or better.


    The only other formal change generating a similar response pattern from43
both groups of lawyers is the Deceptive Trade Practices Act (DTPA).
However, neither group of lawyers handles many of these cases; for both, the
mean percentage of caseload composed of these matters is under 4%. If,
however, we look at those lawyers among all respondents to our survey
(lawyers from all four groups) for whom DTPA cases make up 10% or more
of their caseload, the picture changes. There are eighty-one such lawyers,
and 71.6% responded that changes in the DTPA had a negative effect on
their practices.4
      The other four legal measures in Tables 5a and 5b did, apparently, affect
the two different groups of lawyers differently. For each measure, the dif-
ference is statistically significant. 4s The changes in workers' compensation
laws were felt more strongly by BB1 lawyers than by HH2 lawyers. Three-
quarters of the BB1 lawyers responded that those changes had a negative
effect on their practices. Although Table 5a does not include this level of
detail, almost two-thirds of BB1 lawyers (65.2%) said it had a strong



    43. Again, there is no statistically significant difference in the responses of the two groups to
this question (chi square=0.415, sig. .812).
    44. If we look at those lawyers among all respondents for whom medical malpractice makes up
10% or more of their caseload, the percentage saying that changes in medical malpractice had a
negative effect on their practices does go up. But the difference is not as great as for DTPA. For
the 164 lawyers for whom malpractice made up 10% or more of their caseload, 48.9% said the
changes in the law had a negative effect on their practices.
    45. For the difference between the two groups with regard to workers' compensation cases, chi
square=21.633, sig. .000; for punitive damages, chi square=15.791, sig. .000; for venue, chi
square=16.303, sig. .000; and for joint and several liability, chi square=20.028, sig. .000.




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negative effect. 46 Workers' compensation cases were a very important part
of the practice of lawyers in the lower echelons of the hierarchy. The 1991
changes (which among other things placed new limits on attorneys' fees and
who paid them) had a two-fold effect on the practices of these lawyers.
These cases provided a regular source of income that covered a small
practice's overhead. In addition, these cases created a client base that, in
turn, produced referrals of new business. The comments of one BB 1 lawyer
are illustrative:
      The difference was that I had at any given point in time twenty five to
      thirty five workers' comp cases. You make 25% [the pre-1991 fee] on
      it. You pay your office overhead and that funds the rest of your
      practice. That is the difference, I don't have that now [and] referrals
      from the workers' comp client base are kind of dried-up.
In comparison, under one-half of HH2 lawyers responded that the changes in
workers' compensation had a negative effect, and an almost equal percentage
                                                                   47
said their practices had not been affected by this formal change.
      Three of the formal tort reform changes-caps on punitive damages,
venue constraints, and limitations on joint and several liability-were felt
more strongly by HH2 lawyers than by BB1 lawyers. Over two-thirds of
HH2 lawyers reported that caps on punitive damages had a negative effect,
compared to one-half of BB1 lawyers. In addition, an almost equal
percentage of BB1 lawyers responded that the cap on punitive damages had
no effect on their practices. Regarding constraints on venue selection, over
60% of HH2 lawyers responded with an assessment of a negative effect,
compared to 40% for BB1 lawyers. Over one-half of the B31 respondents
said their practices had not been affected by this reform measure. Finally,
unlike the BB 1 lawyers, most HH2 lawyers said that new limitations on joint
and several liability had a negative effect on their practices.
      These differences make sense in light of the differences between the
types of cases these two groups of lawyers handle. Caps on punitive
damages, venue constraints, and limitations on joint and several liability are
likely to be more important for lawyers handling higher value, more complex
cases. The practices of RB 1 lawyers, as we saw earlier, are built on simple,
low-value cases (predominantly automobile accident cases), and BB1 law-
yers work almost exclusively in local markets. Changes in venue rules, for
instance, are not likely to pose a problem for such a practice.
      The practices of HH2 lawyers are very different. Constraints on venue
selection can disrupt established working networks and make it more


   46. For reasons of clarity, Tables 5a and 5b use a collapsed three-point scale. In the survey we
used a five-point scale: strong positive, somewhat positive, no effect, somewhat negative, strong
negative.
   47. Where there was a negative effect for these lawyers, it was probably the referral network
that brought to them third-party cases that emerged from workers' compensation cases.




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difficult to file in counties that may have been friendlier to the types of cases
an HH2 lawyer has been handling. For instance, one HH2 lawyer said when
asked how tort reform would affect his practice: "Because of the fact, at least
in the railroad end of it, that we have a statewide practice, venue has been
very important to us .... That was changed [in 1995] in such a way that it's
going to drastically affect my business. It takes me out of counties that I've
practiced in now for twenty-six years."
      Changes in punitive damages and joint and several liability affect the
settlement process for more complex cases. The same lawyer who talked
about the venue changes also talked about the caps placed on punitive
damages. First he said that he and his firm have won some punitive damage
awards, but that collection was another matter. He then went on to talk about
what he believed to be the real importance of punitive damages-their role in
the settlement process. Caps on punitive damages, he argued, could change
that process:
      You know, this is a curious thing and you are not going to believe it
      when I tell you, but in the history of this law firm I don't think we
      have ever collected but about $200,000 in punitive damages .... I
      wouldn't try to tell you we are the leading firm, we're not at all [in
      reality, they are], but we have a very solid reputation. And that's an
      astonishing fact. Now, the threat of punitive damages obviously helps
      settle a lot of cases. It's like the threat of treble damages in an
      insurance code case-very few people ever collect those treble
      damages-but the fact that you may get stuck for more than your
      policy limits, or whatever it is, is an incentive to, let's try to get this
      case resolved.
Another HH2 lawyer said the same thing about the cap on punitive damages
and about the changes in joint and several liability:
      In the days before the caps on punitive damages and the days when
      you still had new cases coming in that had joint and several liability
      on them, it let you be more intellectually creative on what you're
      willing to do with the case and how you might find a remedy with a
      happy result .... Now, what happens is you've got to ... analyze it
      in terms of the other side... they know that their liability is capped.
      Therefore they will make an offer ....         You started getting a lot
      different reaction from folks when you try to settle cases. You can't
      get the value of a case you used to be able to get .... Historically,
      you would settle a case for its... at least I would... settle a case for
      its actual dollar value because of the threat of punitive damages. Now
      you're talking about settling it for a fraction of your actual dollar
      value.
Because BB1 lawyers typically deal with low-value cases, they are unlikely
to face this kind of problem.




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B. PerceivedEffects of Changes in the BroaderLegal Environment
      Interestingly, rather than changes in the formal law, it is events which
affect the broader legal environment that seem to have the greatest impact on
plaintiffs' practices. Tables 6a and 6b show that the tort reform public
relations campaigns and the decisions of the Texas Supreme Court are
perceived as having the greatest negative influence on plaintiffs' lawyers'
practices, much more so than any of the specific, formal changes covered in
Tables 5a and 5b. On this, both BB 1 and HH2 lawyers agree-perceptions
about the effects of these changes in the legal environment seem to transcend
one's place in the hierarchy.48 The state supreme court and the public
relations campaigns impact the everyday working environment, in lawyers'
eyes, by affecting the jury or the jury pool. Perceptions about juries and jury
behavior are central to the way plaintiffs' lawyers perceive their working
environment and construct their practices. A series of Texas Supreme Court
decisions have made it more difficult for plaintiffs to successfully bring suit
for money damages, largely by taking key matters from the jury and giving
them to the judge during a time when the judiciary was becoming more
conservative and business-oriented.4 9 The public relations campaigns that
have touted tort reform are seen as especially pernicious because of their
supposed direct effect on the jury pool in many counties. As one lawyer
characterized it, "They've done a great job of poisoning the jury pool and
creating massive misinformation."

                                             TABLE6A
  PERCEIVED EFFEcrS OF CHANGES IN THE BROADER LEGAL ENVIRONMENT ON LAWYERS' PRACTICES

                                          (BBI LAWYERS)

                                                              PERCENT OF RESPONDENTS

Area of Change                                       Positive        No Effect          Negative
Public Relations Campaigns (n=133)                     3.8%             3.8%             92.5%
Local Jury Verdicts (n=131)*                           6.0%             7.5%             86.5%
Settlement Valuations by Insurers (n=133)*             3.8%             5.3%             91.0%
Texas Supreme Court (n=133)                      3.8%         5.3%         91.0%
* indicates that the difference in responses between BB1 lawyers and HH2 lawyers are
statistically significant at .05 or better.




   48. There is no statistically significant difference in responses for the two groups on these two
questions (public relations campaigns, chi square=2.071, sig. .355; Texas Supreme Court, chli
square=3.135, sig. .209).
   49. Philip Hardberger, Juries Under Siege, 30 ST. MARY'S L.J. 1, 2-13 (1998).




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                                                TABLE6B
  PERcEIvED EFECrS OF CHANGES IN THE BROADER LEGAL ENVIRONMENT ON LAWYERS' PRACTICEs

                                              (11   LAWYERS)
                                                                PERCE     OF REsPONDENS
Area of Change                                           Positive        No Effect           Ncgativc
Public Relations Campaigns (n=139)                   2.2%               7.2%            90.6%
Local Jury Verdicts (n=138)*                          13.7%             20.1%            66.2%
Settlement Valuations by Insurers (n=139)*           3.6%               16.5%           79.9%
Texas Supreme Court (n=139)                  4.3%          1.4%         94.2%
* indicates that the difference in responses between BB1 lawycrs and HH2 lawyers are
statistically significant at .05 or better.

     The impact of the tort reform public relations campaigns on juries is
crucial for understanding plaintiffs' lawyers' perceptions of changes in their
working environment and ultimately their responses to those changes-
especially for the BB1 lawyers. The logic runs roughly as follows: interest
groups pushing for tort reform have for many years engaged in aggressive
public relations campaigns to gain support for their cause and to demonize
plaintiffs' lawyers (their primary opponents) and their clients. The jury
pool-people who are potential jurors in civil cases-is one target for these
campaigns. The goal is to influence what they will do once on a jury. The
perception among plaintiffs' lawyers is that the campaign has been suc-
cessful and juries have in fact become more pro-defense, more anti-plaintiff,
and more anti-plaintiffs' lawyer. As a result, insurance companies have
toughened their stance in the settlement process that disposes of the vast
majority of cases. They are less willing to settle or settle on terms favorable
to the plaintiff and more willing to litigate. The whole process of resolving
claims has become riskier, takes more time, and costs more money. In short,
the "going rates" have changed. As a result, some plaintiffs' lawyers
working on a contingency fee basis are making far less money.s
      A Houston plaintiffs' lawyer illustrated this logic quite graphically:
      The biggest problem I've seen is the effect on juries. Tort reform, you
      can call it a legislative agenda... and you can look at it from a
      statutory standpoint .... But what I see as the most severe impact is
      right over there, when you go to pick a jury. And juries have gotten
      mean, real mean. They've been convinced that everything in their
      lives, from heart attacks to hemorrhoids, is because of a system out of
      control. And when you have a tort reform advocate on the jury panel
      and you're asking questions, all you have to do is listen to the
      phraseology.     It's all the same: too many frivolous lawsuits,


   50. See Calve, supra note 10, (observing the downturn in plaintiffs' lawyers' recoveries);
Daniels & Martin, supra note 6, at 476-82 (discussing the "worsening fortunes" of plaintiffs'
lawyers); Daniels & Martin, supranote 2, at 157-58.




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      outrageous jury awards, greedy trial lawyers. The guy is repeating the
      mantra.
      A San Antonio plaintiffs' lawyer makes a direct connection between the
public relations campaigns and jury verdicts:
      There's an organization called Texans Against Lawsuit Abuse which
      has been very, very proactive in regard to attacking the tort system.
      They have done a very effective job in doing that ....Many jurors
      have just bought the propaganda put out by the insurance industry that
      the cost of all these verdicts is driving jobs to Mexico and Taiwan.
      You know, your job is next, so you better do something about it.
      That's the subtle message ....     But right now, the climate is such, at
      least in this community, that jurors are not enamored with personal
      injury plaintiffs or personal injury lawyers. So verdicts are low.
Moreover, a Fort Worth insurance defense lawyer we interviewed provides
the link to insurance company behavior in the settlement process. The
insurance companies that hire his firm "say we ain't payin' nothing ....
Right now they're real tight with money.., because juries are real tight right
now." 51 A similar sentiment is evident in the remarks of a Houston
plaintiffs' lawyer regarding the tougher stance by insurance companies:
"[T]he insurance companies will say, 'Let me show you these Blue Sheets
[the local jury verdict reporter] and what they show."'
      With regard to trends in local jury verdicts and settlement values, Tables
6a and 6b show that the responses of the two groups of lawyers are not the
same and that place in the hierarchy makes a difference. While two-thirds or
more of each group say that jury verdict trends have had a negative impact      52
on their practices, the percentage is significantly higher for BB 1 lawyers.
The percentage responding that settlement valuations by insurance compa-        53
nies have had a negative effect is also significantly higher for 13B 1 lawyers.
These differences are very likely the result of differences in business between
the two groups-in particular, BB1 lawyers' heavy reliance on relatively
simple automobile cases. Because of the frequency of simple automobile
cases, such claims tend to be settled according to well understood "going
rates," which are tied to jury verdicts.
      As noted above, changes in jury verdicts-real or perceived-
reverberate throughout the civil litigation process because they help set the
"going rate" for settling claims. 54 In light of such perceptions, we asked a
series of more specific questions about jury behavior over the five years prior


    51. He, too, thinks the public relations campaigns have affected jurors; he calls the campaigns
his "silent helper."
    52. The difference in responses to the question regarding jury verdicts between the two groups
of lawyers is statistically significant (chi square=14.116, sig. .001).
    53. The difference is statistically significant (chi square=8.836, sig. .012).
    54. There is at least some evidence that the perceptions about juries may have some validity for
auto cases and non-economic damages. See Daniels & Martin, supra note 6, at 480-81 (finding that
verdict patterns influence settlement negotiations).




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to the survey. In discussing the responses, we will use only those from
lawyers who said they were in practice as plaintiffs' lawyers in the five years
prior to the survey. Tables 7a and 7b show that most BB1 lawyers and most
HH2 lawyers said that juries are less likely to decide in favor of the plaintiff
on liability and are less likely to award non-economic damages. 55 Changes
in non-economic damages are especially important for the BB 1 lawyer who
handles small to modest cases. As one BB1 lawyer summarized the
situation:
      I mean, when I look at these jury verdict reports, and I see that a jury
      found the defendant was in a car wreck-100% negligent, the
      defendant ran a stop sign and hurt somebody, and they award S6742 in
      property damages to the plaintiff and they award $1192.50 in medical
      bills, zero pain and suffering, zero mental anguish, zero disability,
      zero physical impairment, you know, whatever. I look at that like,
      good God, what have we come to...? They didn't give a shit, you
      know. There are people on juries who say, "I couldn't award anything
      for pain and mental anguish.... " So, that's the biggest problem I
      see, it's just in attitudes.

                                               TABLE7A
        PERCEPTIONS OF CHANGES IN JURY BEHAVIOR FOR FIVE YEARS PRIOR TO SURVEY
                 (BB 1 LAWYERs IN PRACTICE FOR AT LEAST IVE YEARS: N=1 12)

                                                             PERCETOFREsPoNDENTS
Jury Action                                        More         Same        Less        No Opinion
Liability: Likely for Plaintiff                    0.9%        10.7%       87.5%          0.9%
Economic Damages: Likely to Award*                 0.9%        11.6%       87.5%            0
Non-Economic Damages: Likely to Award            0      6.3%     92.9%      0.9%
* indicates that the difference in responses between BBI lawyers and HH2 lawyers are
statistically significant at .05 or better.


                                               TABLE7B
        PERCEPTIONS OF CHANGES IN JURY BEHAVIOR FOR FIVE YEARS PRIOR TO SURVEY
                 (HH2 LAWYERS IN PRACTICE FOR AT LEAST FIVE YEARS: N=1 14)
                                                            PERCENT OF RESPONDENTS
Jury Action                                        More         Same        Less        No Opinion
Liability: Likely for Plaintiff                    2.6%        12.3%       83.3%           1.8%
Economic Damages: Likely to Award*                 10.5%       25.4%       62.3%           1.8%
Non-Economic Damages: Likely to Award          0.9%     7.0%     90.4%      1.8%
* indicates that the difference in responses between BBI lawyers and HH2 lawyers are
statistically significant at .05 or better.



   55. The differences between the two groups are not statistically significant: liability, chi
square=l.196, sig. .550; non-economic damages, chi square=1.067, sig. .587.




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        The problem for the BB 1 lawyer is that the non-economic damages are
likely to be the source of his fee, out-of-pocket expenses, and whatever profit
there will be. He faces the prospect of taking less money for himself or
seeing his client with less money to pay medical bills and other expenses.
For most BB 1 lawyers, the second option is not an attractive one. They are
loath to cut the money going to the client in order to enhance their own
financial gain. This is because of the damage it would do to their word-of-
mouth client referrals, the source upon which they rely most heavily for new
business. Of course, a lower fee for the lawyer and/or not fully covering
expenses also has a cost. As one BB 1 lawyer said, "It takes away money that
you would normally have to finance other cases."
       For the HH2 lawyer, who works with more substantial cases and has
greater financial resources, decreases in non-economic damages are less
problematic. This is especially so in light of the significant difference in
responses between the two groups of lawyers on the question of economic
damages. 56 The percentage of HH2 lawyers saying that juries are less likely
to award economic damages is lower than that for BB1 lawyers, and the
percentages reporting no change or an increase are larger.
       More skeptical and stingier juries lead to additional changes in the legal
environment, especially in the behavior of insurers. Tables 6a and 6b show
that a majority of both groups of lawyers said that current settlement valu-
ations by insurers are having a negative effect on their practices. All the
participants in the civil litigation process-plaintiffs' lawyers, defense
lawyers, and insurance companies-look to jury verdicts to set the going
rates used to value the vast majority of matters that do not go all the way to a
trial. 57 If they believe juries are becoming more pro-defense, insurers will
toughen their approach to settlement.
        We pursued this perception of altered insurer behavior by asking
lawyers about pretrial settlement values, about the costs of bringing a typical
case to conclusion, and about the time required to bring a typical case to
conclusion-all compared to five years prior to the survey. As Tables 8a and
8b show, most BB 1 and most HH2 lawyers believe that the costs for a typical
case have increased and that a majority of each group believes that the time it


    56. Chi square=19.717, sig..000.
     57. This idea is usually associated with the work of Marc Galanter and what he calls the
"radiating effects of courts." He argues that even though jury verdicts resolve only a small
proportion of all civil disputes, they have a symbolic value and impact that extends well beyond
their frequency. They transmit signals about cases that contribute "a background of norms and
procedures against which negotiations and regulation in both private and governmental settings
takes place. This contribution includes, but is not exhausted by, communication to prospective
litigants of what might transpire if one of them sought a judicial resolution. Courts communicate
not only the rules that would govern adjudication of the dispute but also possible remedies and
estimates of the difficulty, certainty, and costs of securing particular outcomes." Marc Galanter,
The Radiating Effects of Courts, in EMPIRICAL THEORIES ABOUT COURTS 117, 121 (Keith 0.
Boyum & Lynn Mather eds., 1983).




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takes to bring a typical case to conclusion has also increased 5 8 As we might
expect from the findings so far, there is a difference between the two groups
with regard to pretrial settlement values. While over 70% of both groups say
the value has decreased, the percentage is much higher for BB1 lawyers.5 9
Again, the difference is likely tied to their heavy reliance on automobile
cases. Routine automobile cases are likely to be settled using "multipliers"
(e.g., x times specials-medical costs, etc.) without much real bargaining
based on the specifics of the case.60 According to our respondents, the size
of the "multiplier"61 has decreased, meaning a lower value for a case now
than for a case in the past with the same damages. An attorney in a high-
volume BB1 firm that handles routine automobile cases said:
    When I first started in '87, you would typically get four times the
    medical, sometimes even five times medical bills on a typical, soft-
    tissue type of case .... then moved to three times your medical,
                              We
    pretty steady. You know, you got that in and it was no big deal. You
    didn't even have to argue over it. Now, if we're getting 1.7 to 2 times,
    we feel like we're doing real good.
More complex, higher value cases are not as likely to be settled in this way.
Compared to routine automobile cases, which focus only on the money
damages, these cases have many more issues that need to be resolved in the
settlement process, as well as a greater number of interested parties. 6




    58. The differences between the two groups in Table 8 for these two matters are not statistically
significant: cost, chi square=5.529, sig. .063; time, chi square=3.042, sig. .218.
    59. The difference is statistically significant: chi square=15.080, sig. .001.
    60. For a discussion of multipliers and bargaining, see ROSS, supra note 34, at 144-62. For a
discussion of the intensity of bargaining, see KRrrZER, supranote 34, at 30-41.
    61. Both BB1 and HH2 said it decreased, but the percentage for BBI lawyers was higher.
92.9% versus 73.3% for HH2 lawyers. Interestingly, the mean multiplier according to both groups
of lawyers said that the current multiplier (at the time of the survey) was the same: 1.7. The mean
for the multiplier five years prior to the survey was also essentially the same for the two groups:
3.1-3.2.
    62. See KRrrLzER, supra note 34, at 3-14. To illustrate the differences in settlement processes
for routine versus complex cases, Kritzer presents an anecdotal comparison. He contrasts the
extended, multi-party processes that settled the Agent Orange Case and Pennzoil's famous case
against Texaco with the simple, straightforward processes that settled two real-life, low-value
automobile cases. He notes, among other things, an 80-page document prepared by a special master
for use in the Agent Orange settlement discussions. Id. 80. In contrast, he describes the series of
                                                            at
activities needed to resolve one of the automobile accident cases in relatively little time without an
                              at
attorney's involvement. Id. 12-13.




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                                          TABLE 8A
                    LAWYER PERCEPTIONS OF SHIFrs IN SETTLEMENT PROCESS

               (BB 1    LAWYERS IN PRACTICE FOR AT LEAST FIVE YEARS: N=1     12)
                                                          PERCENT OF RESPONDENTS

Aspect of Process                               Increased      About the Same        Decreased
Pre-Trial Settlement Value*                        5.3%              1.8%             92.9%
Cost for Typical Case                             82.3%              11.5%             6.2%
Time to Settle Typical Case                     59.3%        29.2%          11.5%
* indicates that the difference in responses between BB1 lawyers and HH2 lawyers are
statistically significant at .05 or better.


                                             TABLE 8B
                    LAWYER PERCEPTIONS OF SHIFS IN SETTLEMENT PROCESS
               (HH2     LAWYERS IN PRACTICE FOR AT LEAST FIVE YEARS: N= 14)

                                                            PERCENT OF RESPONDENTS
Aspect of Process                               Increased       About the Same       Decreased
Pre-Trial Settlement Value*                       16.5%              9.5%             73.9%
Cost for Typical Case                             92.2%              6.0%              1.7%
Time to Settle Typical Case                     62.1%        20.7%          17.2%
* indicates that the difference in responses between BB1 lawyers and HH2 lawyers are
statistically significant at .05 or better.

      At least in Texas, then, the perception among plaintiffs' lawyers is that
the legal environment in which they work has been changing in ways that
threaten their ability to prosper, or in some cases even to survive. The BB1
lawyer's perceptions of the environment are the most dire. In the next
section we will examine how these perceived changes are affecting their
practices. Again we will see that there are differences between the two
groups of lawyers, with the BB 1 lawyer facing the bleaker future.

 I1. The Effects On Lawyers' Practices
      We would expect lawyers to alter their practices if, in their judgment,
the key factors structuring the market in which they work are changing.
Most simply, if they perceive changes that provide more opportunities for
financial success, we might expect an expanding market. On the other hand,
if they see the changes as negative in character, meaning an environment
with fewer opportunities for financial success, we might expect a contracting
market. The perceptions we have described portray an environment with
fewer opportunities-a contracting market-at least for some lawyers.




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      How is this reflected in lawyers' practices? Perhaps the best indicator
would be the percentage of caseload comprised of plaintiffs' work. Given
their generally negative view of the market environment, we should see BB I
lawyers as a group with a lower percentage of caseload in plaintiffs' work
compared to the past. Table 9a, which presents data on the lawyers in our
survey who were in practice as plaintiffs' lawyers for at least five years,
shows that the mean percentage of plaintiffs' work for BB 1 lawyers did
decrease. 63 In contrast, there was no change for the HH2 lawyer, whose view
of the environment, while not positive, is not as negative as the BB1
          64
lawyer's.
      This finding, however, does not tell us about the change in individual
lawyers' caseloads, and this is the more pertinent question. Are individual
lawyers doing more or less plaintiffs' work in the face of a changing
environment? Again, we would expect individual BB 1 lawyers to be han-
dling a smaller percentage of plaintiffs' work, and Table 9b shows this to be
the case. The largest percentage (almost 50%) are doing less plaintiffs' work
compared to five years before the survey, and the smallest percentage (about
15%) are doing more. Reflecting their somewhat less pessimistic view of
their working environment, a majority of HH2 lawyers are doing about the
same amount of plaintiffs' work. An almost equal percentage of HH2 law-
yers are doing more plaintiffs' work as are doing less plaintiffs' work. 65 In
short, Tables 9a and 9b suggest a steady or shrinking market for plaintiffs'
lawyers' services, at least to the extent that most lawyers said they were
doing about the same amount of plaintiffs' work or less. Few claim to be
doing more in the current environment.

                                             TABLE9A
                         PLAINTIFS' WORK AS PERCENTAGE OF BUSINESS

                                     BB1 Lawyer (n=1 16/116)           HH2 Lawyer (n=1 16/116)
                                            mean:73.6%                        mean: 82.0%
At Time of Survey                         median: 90.0%                      median: 95.0%
                                           mean: 82.8%                        mean: 81.0%
Five Years Prior                           median: 90.0%                     median: 95.0%




    63. The difference in means for BB1 lawyers is significant at .000 (t- -4.683, 115 dl) using a
matched-pairs difference of means test. See HUBERT M. BLAI.OCK, SOCIAL STATISTICS 233-35 (2d
ed. 1972) (describing matched-pairs testing methods). For further discussion of the statistical
methods, see the Methodological Appendix, inffra Part V.
   64. The differences in means for the HH2 lawyer are not significant: t=0.539, 115 df, sig. .591
(using a matched-pairs difference of means test).
    65. If the scores (more, same, less) for BB1 and HH2 lawyers for changes in lawyers'
percentage of business are placed in a single crosstab, the differing patterns are significant at .001
(chi square=13.903, 2 df).




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                                             TABLE 9B
                 CHANGES INPLAINTIFFS' WORK AS PERCENTAGE OF BUSINESS:
                     TIME OF SURVEY COMPARED TO FIVE YEARS PRIOR
                           (PERCENTAGES READ FROM TOP TO BOTTOM)

                                       BB 1 Lawyer (n=1 16)               HH2 Lawyer (n=1 16)
% with More                                    15.5%                              24.7%
% Same                                         37.9%                              56.0%
% with Less                                    46.6%                              23.3%


      There are, of course, other possible explanations for the patterns in
Table 9 aside from lawyers' reactions to their working environment. One
obvious alternative is increased competition-that there are simply more
lawyers out there chasing the available cases. 66 We did ask our respondents
what effect the growing number of lawyers is having on their practices.
While the largest percentages of both BB 1 and HH2 lawyers said the effect
was negative, the percentage of negative responses was much higher for the
BB1 lawyer: 71.4% versus 55.3%. Another alternative would be less de-
mand for the services of plaintiffs' lawyers, either because there are fewer
accidents and injuries or because of a greater reluctance to make a claim for
compensation. 67 In the case of either alternative, we would expect lawyers to
have a lower percentage of their caseload composed of plaintiffs' work. One
or both of these alternatives could work in conjunction with lawyers'
perceptions of the environment. They are not mutually exclusive.
      The lawyers' responses to a series of questions in our survey about their
practices will help us gauge the effects of perceived changes in the working
environment on the two groups of lawyers as well the possible effects of
other factors. One question we asked lawyers was whether the number of


    66. For trend data on the number of lawyers in the state, see CANNON & PRIESTNER, supra note
11, at 1. We have no hard data on whether the percentage of lawyers in private practice who are
plaintiffs' lawyers has increased.
    67. Of course, there is a substantial literature suggesting that a reluctance to sue, generally
speaking, is nothing new and certainly not an artifact of the latter 1990s. See DEIBORAH HENSLER
ET AL., COMPENSATION FOR ACCIDENTAL INJURIES INTHE UNITED STATES (1991); David Engel,
The Oven Bird's Song: Insiders, Outsiders and Personal Injuries in an American Community, 18
LAW & Soc'y REV. 551, 552 (1984) (discussing the public criticism of personal injury lawsuits and
its impact on claims); Richard Miller & Austin Sarat, Grievances, Claims and Disputes:Assessing
the Adversary Culture, 15 LAW & SOC'Y REV. 525, 532 (1980-81) (summarizing arguments that
contemporary American society is relatively uncontentious and not particularly litigious). Whether
there has been a decrease in accidents and injuries is difficult to determine. At least for automobile
accidents with injuries, Texas Department of Public Safety data indicate that there was no decrease
in the latter 1990s. While the number of injuries caused by medical professionals is not available,
statistics for the number of medical malpractice claims filed (lawsuits and non-lawsuits) are
available from the Texas Board of Medical Examiners. From 1995 to 1999, the number of claims
filed went as follows: 5396, 3532, 3314, 4538, and 5333. See Professional Liability Statistics for
Physicians Practicing in Texas, Table A-1, http:lwww.tsbme.state.tx.us/statistics/pls200l.pdf (last
visited Mar. 17, 2002).




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calls per month from potential contingency fee clients had changed compared
to five years earlier. Arguably, the perceived changes in the working
environment described earlier would have little, if any, effect on the number
of calls. The two alternative explanations, however, could have some effect.
Table 10a shows that the picture is essentially the same for both BB1 and
HH2 lawyers-the mean number of calls per month declined.6 When the
question is whether individual lawyers were actually receiving more calls or
less, Table 10b indicates that a majority of each group reported receiving
less. For BB1 lawyers, however, the change was more dramatic, with two-
thirds reporting that they are receiving fewer calls, which is consistent with
their sense of increased competition.

                                               TABLE 10A
                CALLS PER MONTH FROM POTENTIAL CONTINGENcY FEE CLIENTS
                                    BB 1 Lawyer (n=1 12/110)            HH2 Lawyer (n=107/107)
                                             mean 21.3                          mean: 16.2
At Time of Survey                          median: 15.0                        median: 8.0
                                             mean: 32.4                         mean: 25.2
Five Years Prior                           median: 22.5                        median: 10.0


                                             TABLE 108
          CHANGE INCALLS PER MONTH FROM POTENTIAL CONtnNGENCY FEE CtErs
                           (PERcENTAGES READ FROM TOP TO BOTTOM)

                                       BB1 Lawyer (n=1 10)                HH2 Lawyer (n=107)
% with More                                    15.6%                              17.8%
% Same                                         16.5%                              29.9%
% with Less                                    67.9%                              52.3%


      If competition (or less demand for services) was the key or sole factor
affecting lawyers' practices, we might predict that lawyers would become
less choosy, taking a higher percentage of the calls they do receive. This
would allow them to maintain the same level of business. And, given the
BB1 lawyer's predicament with regard to calls coming in, we would espe-
cially expect him to take a larger percentage of calls compared to five years
earlier. In fact, just the opposite is the case. According to Table 1 the
                                                                      la,
mean percentage of calls resulting in a signed contingency fee contract
declined for both sets of lawyers.6 9 Perhaps more importantly, and contrary


   68. Each of the differences in means in Table 10a is significant at the .008 level or better (using
a matched-pairs difference of means test).
   69. The difference in means for BB1 lawyers and for HH2 lawyers are both significant at .000
(BBI: t-5.168; 112: t= -4.951, 108 df).




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to expectation, the decline appears greater for the BB 1 lawyer, as Table 1 lb
suggests. 70 Over one-half of BB 1 lawyers report signing fewer calls com-
pared to just over 40% of HH2 lawyers. The largest percentage of HH2
lawyers say they are signing about the same percentage of calls. Still, fewer
than 10% of either group said they are signing up a higher percentage of
calls, which would be the response expected if competition or simply a
decrease in demand for their services were the issue. Something else is at
work here.

                                            TABLE 1IA
         PERCENTAGE OF CALLS PER MONTH SIGNED TO A CONTINGENCY FEE CONTRACT

                                    BB1 Lawyer (n=1 12/119)           HH2 Lawyer (n=112/109)
                                          mean: 37.9%                        mean: 18.4%
At Time of Survey                        median: 37.5%                      median: 10.0%
                                           mean: 48.7%                       mean: 26.5%
Five Years Prior                         median: 50.0%                      median: 15.0%


                                            TABLE 11B
         CHANGE IN PERCENTAGE OF CALLS SIGNED TO A CONTINGENCY FEE CONTRACT

                          (PERCENTAGES READ FROM TOP TO BO'rOM)

                                      BB 1 Lawyer (n=109)                HH2 Lawyer (n=109)
% with More                                    9.3%                              8.3%
% Same                                        34.3%                             50.5%
% with Less                                   56.5%                             41.3%


     Plaintiffs' lawyers seem to be choosier, despite the decline in calls, as a
response to their perceptions of the changing environment in which they
work. Many say they need to be more careful which cases they take in the
current environment. As one simply put it, "We're getting increasingly
selective because the process of taking a case to court is getting enormously
expensive .... I front the costs and if we lose, I eat the costs." Does this
mean that lawyers might be more willing to take a more lucrative case? In
other words, being more choosy would translate into a willingness to take
fewer little cases and to take those with the potential of a higher return. This,
perhaps, could be a response to competition.
     In our survey, we asked lawyers if they would take a medical
malpractice case involving severe brain damage to a newborn resulting from
alleged negligence by the attending physician or whether they would refer


    70. If the scores (more, same, less) for BB 1 and HH2 lawyers for changes in percentage of calls
signed up are placed in a single crosstab, the differing patterns are significant, at .050 (chli
square=5.985, 2 df).




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the case to someone else. Would lawyers, especially BB1 lawyers, be more
willing to take such a case compared to five years earlier? Even if the
change was not a large one, we would predict that some proportion of
lawyers would try to deal with the problems of fewer calls and the felt need
to be choosier by taking a case with more monetary potential. Given that the
HH2 lawyer already has a practice consisting of more valuable cases, we
might expect less change (but still some) from him.
      Interestingly, we found no significant change in the percentage of BB 1
or HH2 lawyers who would take the case. As Table 12a shows, just over one
quarter of BB1 lawyers said they would take the case described in our
hypothetical at the time of the survey, with an almost equal percentage
saying they would have taken it five years earlier. While the percentage of
 IHH2 lawyers who would take the case is much higher (as we would expect),
that percentage did not change significantly either !'

                                             TABLE 12A
       PERCENT OF LAWYERS WHO TAKE A MEDICAL MALPRACtICE ("BAD BABY") CASE
BB1 Lawyers                                 Take the Case                    Refer the Case
At Time of Survey (n=1 16)                     28.4%                              71.6%
Five Years Prior (ne110)                       27.3%                              72.7%
HH2 Lawyers                                 Take the Case                    Refer the Case
At Time of Survey (n=113)                      60.2%                              39.8%
Five Years Prior (n=106)                       57.5%                              42.5%


                                             TABLE 12B
             CHANGE IN PERCENT WHO WouLD TAKE A MEDICAL MALPRACTICE CASE
                            (PERCENTAGES READ FROM LEFrTo RIGHT)
BB1 Lawyers (112)                             Yes Now                           No Now
Yes Before                                   63.3% (19)                        36.6W (11)
No Before                                .... 1)(0                             85.0% (68)
HH2 Lawyers (107)                             Yes Now                           No Now
Yes Before                                   80.3% (49)                        1,9.7% (12)
No Before                              "3          (15)
                                                 1W6                           67.4% (31)


      The risk, cost, and complexity of the case might explain the general
patterns in Table 12a and why lawyers generally would not take such a
medical malpractice case at either point in time. How many lawyers changed
their minds about taking the case? Table 12b shows that most lawyers-BB1


    71. Using a matched-pairs difference of proportions test, neither of the differences in Table 13a
are significant: BB1, t--.208, 109 df, sig..836; H-12, t=-.576, 106 df, sig. .566.




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or HH2--did not change their minds. 72 The cells for lawyers who changed
their minds one way or the other are shaded in Table 12b. Of the thirty BB 1
lawyers who said they would have taken the case five years ago (the row
labeled "Yes Before"), over one-third changed their minds and said they
would not take the case now. Of the eighty BB1 lawyers who said they
would have not taken the case five years ago (the row labeled "No Before"),
only 15% changed and said they would take it now. Most HH2 lawyers did
not report a change in their willingness to take such a case. However, a
higher percentage, compared to the BB1 lawyers, changed from not taking
the case five years before to taking it now-about one-third. And a smaller
percentage, compared to BB1 lawyers, changed from yes to no. In other
words, BB 1 lawyers seem more cautious and less willing to take the risk for
a higher potential return even in the face of fewer calls coming in and a
smaller percentage being signed up. HH2 lawyers appear a bit more likely to
take the case. While they too are getting fewer calls and signing up a smaller
percentage, they appear more willing to take the risk on a case with a larger
potential return, but they may be in a better position financially to take that
risk.73
      We also asked lawyers if they would take a simple car wreck case that
involved only soft-tissue injuries worth $3000 and minimal property damage
if the liability appeared to run to another party who was adequately insured.
In particular, we were interested in whether BB 1 lawyers would be less likely
to take the kind of "bread and butter" case their practices have been built on.
The remarks of an Austin lawyer reveal the importance of such cases: "[T]he
kinds of cases I have, the 'bread and butter,' so to speak, clay-in day-out
cases are auto cases. They pay the bills and carry me between big cases."
Similarly, a San Antonio lawyer said, "Auto basically covers the
overhead ... keeps the salaries paid and that sort of thing."
      If perceptions about competition (or simply less demand for services)
were most important in driving lawyers' decisions, we might predict a
greater willingness by BB 1 lawyers to take such cases-or at least the same
willingness-compared to five years earlier. Even if they are becoming
choosier in general, we might not expect to see them cut back substantially
on their "bread and butter" cases. Yet, in the current environment, these
kinds of cases are very problematic, as illustrated by the following comments
of a San Antonio BB1 lawyer:
      Low-impact, soft-tissue cases, we're very selective with because the
      insurance companies are not paying for those cases as well as juries


   72. Each of the crosstabs in Table 13b are significant (Fisher's exact) at .000.
   73. Though not directly involving a medical malpractice case, the comments of one HH2
lawyer illustrate this. He said, "[W]e got a wonderful verdict down in Corpus [Christi] after a ten-
week trial for a million and half dollars. The people took bankruptcy and we never got a dime. We
spent $105,000 of our own money. So that's the nature of the plaintiffs' business." This lawyer
could absorb the loss. It would probably put many BB1 lawyers out of business.




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      are not giving money for those cases ....                 In today's climate, if
      someone goes in with that type of case, they're automatically cast out
      as a person that's only there for the money, regardless of the
      injury .... There's a very good chance that you're just not going to
      be able to achieve your full fee as per the contract.
And "today's climate," of course, is in their view the result of the public
relations campaigns and their effect on the jury pool.

                                           TAnLE 13A
             PERCENT OF LAWYERS WHO TAKE A SIMPLE (SOFT TISSuE) AuTo CASE
BB 1 Lawyers                             Take the Case                   Not Take the Case
At Time of Survey (n=1 14)                   64.9%                             35.1%
Five Years Prior (n=114)                     93.9%                              6.1%
HH2 Lawyers                              Take the Case                   Not Take the Case
At Time of Survey (n=1 14)                   18.4%                             81.6%
Five Years Prior (n=1 12)                    47.3%                             52.7%


                                           TABLE 13B
                   CHANGE IN PERCENT WHO WouLD TAKE AN           AuTo CASE
                            (PERCENTAGES READ FROM LEFTTO RIGHT)
BB1 Lawyers (112)                          Yes Now                            No Now
Yes Before                                 33.3% (35)                       66.7% (70)
No Before                                  28.6% (2)                         71.4% (5)
HH2 Lawyers (107)                          Yes Now                            No Now
Yes Before                                 37.7% (20)                       62.3% (33)
No Before                                   1.7% (1)                         98.3 (53)


     Table 13a shows, as we would expect, that almost all BB1 lawyers
would have taken the case before. However, at the time of the survey the
percentage willing to do so was down to just under two-thirds. This is a
significant change, and since these are the "bread and butter" cases for BB1
lawyers, it is one that could make it much harder for the BB1 lawyer to
remain profitable. We would not expect most HH2 lawyers to be interested
in the "bread and butter" car wreck case, especially in the current envi-
ronment. Few of them would take the case today; however, almost one-half
would have taken it five years ago.74
     The change in whether a lawyer would take the "bread and butter" cases
is even more evident in Table 13b. The cells representing a change in
whether an individual lawyer would or would not take the auto case are


   74. One reason for taldng such cases would be to give younger lawyers in the firm experience.




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shaded. 75 The table shows that most lawyers who would have taken the case
before would not take it now. This is especially so for BB1 lawyers. Two-
thirds of the 105 BB1 lawyers who would have taken the case five years
earlier (the row labeled "Yes Before" for BB 1 lawyers) would not take the
case now. We might assume that the explanation for this is something close
to that given by the San Antonio lawyer quoted above. But if such "bread
and butter" auto cases become problematic, these lawyers are in trouble. As
an Austin lawyer said, "If I didn't have car wrecks... I'm out of here!"
Again, these are the cases that pay the overhead-that "keep the lights on."
Fewer calls, a smaller percentage of calls signed up, and less willingness to
take "bread and butter" cases make financial survival less likely unless there
is some other type of case to rely upon.
      We would not expect most HH2 lawyers to be interested in the "bread
and butter" car wreck case, especially in the current environment. Few of
them would take the case today. If anyone changed his mind about the case,
it would be to not take the case today. Of the fifty-four HH2 lawyers who
would not have taken the case five years ago (the row labeled "No Before"
for HH2 lawyers), only one changed his mind and said he would take it now.
Most of the fifty-three HH2 lawyers who would have taken the case before
would not take the case today. Of course, passing up such cases is not likely
to make much difference for the HH2 lawyer's fortunes. Instead, he appears
more willing to take the potentially more lucrative cases, like the medical
malpractice case discussed above.
      The patterns regarding the car wreck case suggest that the lawyers are
not simply responding to more competition or less demand for their services.
In either situation, we would expect lawyers, especially BB 1 lawyers, to be
more likely to take such a case in order to maintain the same level of
business. At the very least, we would expect them to be as willing to take the
case as in the past. Instead, lawyers appear to be responding to the changes
in the legal environment that they, in turn, tie to the tort reform campaigns.
To pursue this idea further, we asked lawyers whether they would take the
hypothetical car wreck case if particular types of clients were involved. If
increased competition or less demand for their services were the primary
problems in their eyes, we might predict a greater willingness to take clients
they would have not taken in the past (again, to be less choosy). At the very
least, we would not expect them to become more choosy. We asked if they
would take such a case if the client were unemployed, if the client had a
criminal record, or if the client had been a personal injury plaintiff in the
past. In contrast to the simple competition or demand arguments, the idea is
that not only might some kinds of cases become problematic in the current



    75. Each of the crosstabs in Table 13b is significant at .050 or better (Fisher's exact). For
further discussion of the statistical methods, see the Methodological Appendix, infra Part V.




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environment, but so might certain kinds of plaintiffs. If lawyers believe they
must respond to the problem of a changed environment, we would expect
them to be less likely to take such clients.
      The view that the environment is the problem is aptly illustrated in the
way one Houston lawyer explained his approach to screening clients:
      We look for a client with no prior problems. It makes a good
      impression .... Those are the types of cases we've gone there, tried,
      got verdicts. Because we found that people [jurors]-that as long as
      you don't have somebody up there that has a lot of prior claims, and
      makes a good impression, is a working person-they'll award them
      some money .... What they [jurors] don't want to see is Joe Blow
      who has a soft tissue back injury, but also had a soft tissue back injury
      two years ago, and four years ago, and doesn't work and is
      unemployed, has three kids and is on welfare. And those are a lot of
      cases that get tried [and lose].
And again, in the view of many plaintiffs' lawyers, the reason juries are more
skeptical of the plaintiffs themselves is the tort reform public relations
             76
campaigns.
      When asked if they would take that simple car wreck case today if the
client were unemployed, more than a majority of BB 1 lawyers indicated that
they would do SO. 7 7 However, this percentage is lower than five years prior
to the survey, when three-quarters would have taken such a client. Less than
a majority would take the person with a criminal record, but over 60% would
have before. Just over a majority would take the person who had been a
plaintiff before, but almost three-quarters would have done so five years
earlier. Compared to HH2 lawyers, BB1 lawyers are much more likely to
take each of these potential clients; however, five years prior to the survey,
even more of these lawyers would have done so. In one sense, the fact that
BB1 lawyers would be more likely to take such clients should not be
surprising. Often, their clientele is comprised of some number of people who
do not fit a middle-class stereotype. This is what makes the increasing
reluctance of BB 1 lawyers to take these clients important.




   76. The empirical literature would agree with the skepticism. but not necessarily for the same
reasons. See VALERIE HANS, BusINEss ON TRIAL: THE CIVIL JURY AND CORPORATE
RESPONSIBILrY 70-71 (2000) (noting that many scholars believe that media reporting of civil
lawsuits has at least as much impact on people's perceptions of plaintiffs as tort reform advertising
campaigns).
    77. See Table 14a. All the differences in Table 14a for "at time of survey" and "five years
prior" are significant, using a matched-pairs difference of proportions test, at .002 or better.




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                                       TABLE 14A
        PERCENTAGE WHO WOULD TAKE SIMPLE AUTO CASE WITH DIFFERENT CLIENTS

                                            BB I Lawyers Would Take Person as Client
Potential Client is                     At Time of Survey              Five Years Prior
Unemployed (n=1 15/113)                       62.6%                         77.0%
Has Criminal Record (n=1 15/113)              43.5%                         62.8%
Previous Plaintiff (n=114/112)                56.1%                         74.1%
                                            HH2 Lawyers Would Take Person as Client
Potential Client is                     At Time of Survey              Five Years Prior
Unemployed (n=1 16/115)                        18.1%                        28.7%
Has Criminal Record (n=1 16/114)               11.2%                        21.1%
Previous Plaintiff (n=1 16/114)                19.0%                        29.8%


                                       TABLE 14B
                  CHANGE IN PERCENT WHO WOULD TAKE DIFFERENT CLIENTS

                                                       BB I Lawyers
Unemployed (113)                        Yes Now                            No Now
Yes Before                             74.7% (65)      ::.25.3%                    (22)
No Before                               23.1% (6)                        76.9% (20)
Criminal Record (113)                   Yes Now                            No Now
Yes Before                             64.8% (46)                        -35.12% (25)
No Before                                7.1%(3)                         92.9%.(39)
Previous Plaintiff (111)                Yes Now                            No Now
Yes Before                             68.7% (57)                        31.3% (26)
No Before                               17.9% (5)                         82.1% (23)
                                                       HH2 Lawyers
Unemployed (115)                        Yes Now                            No Now
Yes Before                             57.6% (19)                        42.4% (14)
No Before                                2.4% (2)                         97.6% (80)
Criminal Record (113)                   Yes Now                            No Now
Yes Before                             45.8% (11)                        54.2% (13)
No Before                                 0% (0)                          100% (90)
Previous Plaintiff (114)                Yes Now                            No Now
Yes Before                             61.8% (21)                         38.2% (13)
No Before                                13% (1)                          98.8% (79)




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      When we turn to how many lawyers changed their minds about these
three types of clients, Table 14b shows that most BB1 lawyers did not! 8
Still, there were substantial minorities that did change their minds from "yes
before" to "no now." Fewer changed their minds from "no" to "yes." This is
especially so with regard to the potential client with a criminal record. Just
over one-third switched from "yes" to "no," and only three lawyers went
from "no" to "yes." Nonetheless, the BB 1 lawyer is still more likely to take
some problematic clients than the HH2 lawyer, but he may not have the
opportunity to get "better" clients.
      HH2 lawyers, of course, are not likely to take a simple car wreck case
with any of these clients, and they are taking even fewer with these clients.
No one who said "no before" for the person with a criminal record said "yes
now." Only two changed from no to yes for the unemployed person and only
one would so change for the person who was a plaintiff in a case in the past.
In short, the HH2 lawyers were choosy in the past and remained so-they
can afford to operate this way. As a result, the problematic client with a
legitimate claim may have a hard time getting a better lawyer to handle his
case.
      It would seem, then, that increased competition or less demand for
services may not be the primary driving force behind changes we are seeing
in plaintiffs' lawyers' practices. Instead, lawyers are reacting to the events
they see as most important-changes in the legal environment in which they
work. They are doing so by retrenching (especially the BB1 lawyers), by
limiting the supply of services in an effort to cope with this new
environment. Given this pattern, we might expect to see a restructuring of
their mix of business, including movement away from areas that are
becoming problematic in the changing environment and a search for new
market opportunities.
      We asked lawyers about changes in the nature of their business over the
five years preceding the survey, looking both for shifts within the
contingency fee arena and movement to cases outside of it. As Table 15
shows, there were few substantial changes in the mix of business for either
group of lawyers. What is interesting is that there are any noticeable changes
at all for the relatively short period of time covered by the survey's
questions. Table 15 presents data on the mean percentage of business made
up by each of nine types of cases at the time of the survey and five years
earlier. It also includes the percentage of lawyers who were handling more,
less, or the same amount of each of those nine types of cases. 9



    78. All of the crosstabs in Table 14b are significant at .000 (Fisher's exact).
    79. The nine types were taken from a larger list of 18 types of cases, and they represent those
for which the mean percentage of caseload changed by at least one percentage point for either BBI
lawyers or HH2 lawyers.




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                                           TABLE15A
                          CHANGES INBUSINESS-SELECTED AREAS
                                                         BB I Lawyers
                               Mean %of               Mean % of
                               Business at Time       Business Five
                               of Survey              Years Prior            Change in % of
Area                            (n=1 15)              (n-105)                Business
                                                                             more: 31.3%
                                                                             same: 21.9%
Automobile                     53.6%                  55.0%                  less: 46.7%
                                                                             more: 9.5%
                                                                             same: 85.7%
Commercial                      2.6%                  2.1%                   less: 4.8%
                                                                             more: 10.5%
                                                                             same: 79.0%
Criminal                       4.6%                   3.1%                   less: 10.5%
                                                                             more: 24.8%
                                                                             same: 66.7%
Domestic Relations *            8.1%                  4.5%                   less: 8.6%
                                                                             more: 15.2%
                                                                             same: 76.2%
Medical Malpractice             3.6%                  2.5%                   less: 8.6%
                                                                             more: 16.2%
                                                                             same: 82.9%
Nursing Home*                   1.4%                  0.3%                   less: 1.9%
                                                                             more: 19.0%
                                                                             same: 46.7%
Premises Liability*             5.0%                  6.7%                   less: 34.3%
                                                                             more: 19.0%
                                                                             same: 80.0%
Probate/Estates*                2.6%                  1.4%                   less: 1.0%
                                                                             more: 5.7%
                                                                             same: 74.3%
Workers' Compensation*            2.8%                  6.9%                  less: 20.0%
* indicates significant at .05 or better using a matched-pairs difference of means test.




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                                            TABLE 15B
                           CHANGES INBusnqEss-SFLEcrED AREAS
                                                          HH2 Lavycrs
                                Mean %of                Mean %of
                                Business at Time        Business Five
                                of Survey               Years Prior            Change in % of
Area                            (n=1 12)                (n=101)                Business
                                                                               more: 5.9%
                                                                               same: 51.0%
Automobile*                     14.6%                   20.7%                  less: 43.1%
                                                                               more: 20.6%
                                                                               same: 72.5%
Commercial*                     13.6%                   8.7%                   less: 6.9%
                                                                               more: 2.0%
                                                                               same: 94.1%
Criminal                        1.8%                    1.9%                   less: 3.9%
                                                                               more: 2.9%
                                                                               same: 91.2%
Domestic Relations              1.2%                    1.6%                   less: 5.9%
                                                                               more: 27.5%
                                                                               same: 61.8%
Medical Malpractice*            20.5%                   15.5%                  less: 10.8%
                                                                               more: 11.8%
                                                                               same: 81.A%
Nursing Home                    2.8%                    1.4%                   less: 6.9%
                                                                               more: 7.8%
                                                                               same: 70.6%
Premises Liability              3.9%                    4.9%                   less: 21.6%
                                                                               more: 2.9%
                                                                               same: 96.1%
Probate/Estates                 1.2%                    0.8%                   less: 1.0%
                                                                               more: 4.9%
                                                                               same: 94.1%
Workers' Compensation             0.1%                  1.3%                  less: 1.0%
* indicates significant at .05 or better using a matched-pairs difference of means test.




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      Although Table 15a shows that automobile cases make up the largest
percentage of the BB1 lawyer's caseload, the percentage did not increase.
There appear to be six growth areas: commercial, criminal, domestic
relations, medical malpractice, nursing home, and probate/estates. None of
the increases are large, but they indicate that BB 1 lawyers are doing more of
these cases than before. Three of these growth areas are outside of the
plaintiffs'/contingency fee market: criminal, domestic relations, and
probate/estates. Two of these three changes in percentage are statistically
significant: domestic relations and probate/estates. They are safe havens of a
sort, far less risky areas that generate regular income that can help cover the
overhead. As one BB1 lawyer said, "I know how to do divorces. I don't
want to do them, but to be a lawyer you might still have to. And I think a lot
of personal injury lawyers are coming to that conclusion." Another said,
"I've got to have an economic base to live ....        We've tried to basically
maintain cash flow from wills, divorces, bankruptcy and then continue with
the PI as much as we can .... We pay our bills and heat from the hourly
work." One-quarter of the BB1 lawyers said they are doing more domestic
relations than before, and fewer than 10% said they are doing less. Almost
one-fifth said they are doing more probate/estates, and almost none are doing
less.
      The only other statistically significant shift in the mix of business for
these lawyers is an increase in nursing home cases. Rather than a safe haven,
these cases represent a new opportunity within the plaintiffs' market that may
be immune from the tort reform campaigns. One lawyer's comments suggest
why:
      [T]he nursing home cases seem to be one area of personal injury work
      that really strikes a more responsive chord with our local
      community .... The verdicts have gone up substantially for elderly
      people compared to what it's been in the past .... We thought that
      might be true after we worked on a couple of them .... We thought
      there's got to be more of these cases out there.
Nursing home cases will not be a high-volume area for this lawyer, but they
may be the moneymaker for his modest firm. Consistent with this
possibility, 16% of BB1 lawyers said they are doing more nursing home
cases than before, and almost none are doing less.
      BB 1 lawyers experienced a decreased emphasis in three areas:
automobile, premises liability, and workers' compensation. The changes
were statistically significant for premises liability and workers'
compensation. Just over one-third of BB 1 lawyers said they are doing less
premises liability work, and one-fifth are doing less workers' compensation.
Although the difference in percentage for automobile cases is not significant,
it is worth noting that about one-half of BB1 lawyers said they are doing less
than before.




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      The picture is quite different for HH2 lawyers in Table 15b, and there is
no evidence of a move to safe havens as there is for BB1 lawyers. The
percentage of caseload increased in four areas: commercial, medical
malpractice, nursing home, and probate/estates. The changes in percentage
for commercial and medical malpractice work are statistically significant,
and both increases are greater than the increases for the significant changes
in Table 15a for BB1 lawyers. Although it is a risky area, medical
malpractice is also a potentially lucrative one. BI112 lawyers deal with the
risk by carefully screening these cases, taking only the best cases, and then
thoroughly preparing them. It is also an area in which a number of HH2
lawyers have developed expertise. When we asked lawyers if they had any
particular specialty areas of practice, the largest percentage of HH2 lawyers
(29.6%) said medical malpractice was their specialty area. Commercial
cases taken on a contingency fee represent a new area of opportunity largely
immune from the tort reform campaigns. One lawyer who re-oriented his
practice towards commercial cases handled on a contingency fee basis said,
"Commercial litigation is appealing in this environment. We're in a
Republican, pro-business, pro-industry, anti-plaintiff environment. The
environment is much more conducive to that [commercial cases] than to
traditional plaintiffs' work." One-fifth of 1H2 lawyers said they are han-
dling more commercial work, and less than 10% said they were doing less.
      The percentage of caseload decreased in five areas: automobile,
criminal, domestic relations, premises liability, and workers' compensation.
Only the decline in automobile cases is statistically significant, and it is a
relatively substantial decrease. Over 40% of 1H2 lawyers are handling
fewer automobile cases, and fewer than 10% said they were handling more.
The changes in the percentage of their caseloads made up of domestic
relations, criminal, and workers' compensation were negligible since HH2
lawyers handled little work in these areas either at the time of the survey or
five years before. Over 90% of HH2 lawyers reported no change in the per-
centage of caseload for these areas. In short, HH2 lawyers increased their
focus on areas with more valuable cases and moved away from those that
                              80
might be more problematic.
      Perhaps the best summary indicators of what all of the changes mean to
plaintiffs' lawyers' practices are whether the average value of their
contingency fee cases has increased and whether the net income from their
legal practice has grown. For BB1 lawyers, the situation is not encouraging.
Their median case value declined from $10,000 to $7,500 over the five-year
interval. Almost all BB1 lawyers (85.3%) saw the average value of their


   80. One HH2 lawyer said he is moving into oil and gas lease cases: "We're into oil and gas big
time now. We were not five years ago; we didn't have any ....          Now I'm into it big time ....
There are big dollars in it. I mean if it's not a case involving probably two to three million dollars,
we wouldn't even look at it.... We do everything on contingency fee."




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typical contingency fee case decline. Their net income also fell from
between $125,000 and $149,999 to between $100,000 and $124,999; and
almost one-half (49.1%) saw their net income go down (alternatively, 30.6%
saw income increase). As one BB 1 lawyer said:
      I made less money last year than I have made the five years preceding
      that. Since about... well since about '93 to '94 it's gone down each
      year. Last year it went down significantly. I like practicing law; I like
      helping people, and at one time I thought you could make some
      money doing it. There is the independence part about it I like-I like
      owning my own office (there is that part of it). But frankly, I question
      how much longer I can do it. Really, that is the reality of it.
For some lawyers, then, the late 1990s may indeed have been the worst of
times.
      For HH2 lawyers, the situation was quite different. Their average case
value increased from a median of $400,000 five years before the survey to
$700,000 at the time of the survey. Most HH2 lawyers (61.2%) saw their
average case value increase, and the largest percentage (43.4%) saw their
income increase (26.5% saw it decline). While the late 1990s may not have
been the best of times for all HH2 lawyers, in general they were still
relatively good times.
      Plaintiffs' lawyers' practices, at least in Texas, are a precarious
enterprise. They are exquisitely sensitive to changes in their market
environment-especially changes to the informal norms and processes that
determine the way in which the vast majority of matters are handled by these
lawyers. Alter that environment in ways that may affect profitability and you
can change plaintiffs' lawyers' practices. Changing those practices, in turn,
can create real change in the civil justice system as lawyers move to new
practice areas and away from older ones. Whether intentionally or not, the
tort reform movement seems to have altered the working environment for
most plaintiffs' lawyers. Individual lawyers are essentially powerless in
affecting the working environment. They can only react to the changes they
encounter. Those in the lower echelons of the plaintiffs' bar seem to be the
least able to react successfully. Their need for a constant cash flow to "keep
the lights on" makes them especially vulnerable. The late 1990s have been
hard for them. Lawyers higher in the structure, perhaps because of superior
financial resources and a different case mix, are better able to react
successfully.

IV. Conclusion
      Our discussion of Texas plaintiffs' lawyers and their practices has a
number of possible implications for the civil justice system and for how we
look at it. Most obviously, our findings show that these lawyers are doing
less plaintiffs' work. This may mean that fewer tort cases will be filed in the




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state's trial courts. In fact, filings for tort cases in Texas' district and county
courts combined fell during the second half of the 1990s, both in terms of the
rate of filings per 1000 population and the raw number of filings.3 ' Perhaps
there were fewer injuries and deaths because of accidents, but our findings
point to an alternative explanation that must be considered as well-
alterations in the markets in which plaintiffs' lawyers work that make this
type of practice more or less attractive. Similarly, the findings suggest that
the plaintiffs' bar itself may shrink as lawyers leave for more lucrative areas
or do not enter this area at all. To the extent plaintiffs' lawyers function as
gatekeepers, this raises questions about meaningful access to the legal system
and about representation.8 At least some studies show that those represented
by a lawyer do better in personal injury matters than those who represent
themselves, and those with experienced or specialist lawyers do better than
those represented by inexperienced or generalist lawyers.8 3 On the other
hand, those lawyers who remain in this market may become more proficient
and specialized. While this may benefit people with more serious injuries, it
may also make it more difficult for those with legitimate, but more modest,
cases to find adequate representation. And shrinkage in the plaintiffs' bar
could also have political consequences to the extent that political groups who
rely upon plaintiffs' lawyers for monetary support find that support
diminishing.
      Our findings also point to the importance of certain kinds of interest-
group political activity for understanding what happens in the civil justice


    81. The decline in the raw filings is most surprising. Texas' population continued to increase
throughout the 1990s, and there could be a decline in the rate of tort filings if the population
increased faster than filings. But we would probably expect the raw number of filings to continue to
increase. It did not, and the decrease occurred in both auto torts and non-auto torts, the two
categories used for reporting purposes by the Texas Office of Court Administration. The number of
tort filings increased each year from 1985 (the first year for which complete figures for both levels
of trial courts are available) through 1987. Filings dropped in 1988 and 1989 (less than 10%), and
then began increasing again in 1990, reaching a peak of 65,262 in 1995, an increase of 41.3% from
1989 to 1995 (rate per 1000 population increased 26.6%). Starting in 1996, the number of filings
began steadily decreasing to 49,346 in 2000-a decrease of 24.4% (the rate decreased 31.7%). See
T-x. JUD. SYS. ANN. REP. for years 1985-2000.
    For annual statewide filing statistics for tort cases, see the 57th through 72nd Annual Reports of
the Texas Judicial System (1985-2000). Each Annual Report will contain a table entitled District
Court Statewide Summary of Reported Activity or Summary of Reported Activity. The figures
used in this footnote for the annual number of tort filings are taken from these tables for each year.
We then combined the annual District and County totals to get a grand total for tort filings for each
year. From these raw numbers, we calculated simple percent-change figures for tort filings (the
percentage increase or decrease in the number of filings). For statements on the change in the rate
of tort filings per 1000 population we first divided the number of filings for a given year by the
state's population for that year and then multiplied by 1000; we next calculated percentage-change
figures for these rates.
    82. See Kritzer, supra note 17, at 28-29.
  83. See Ross, supra note 34, at 166-70; STEPHEN DANIELS Er AL, WHY KILL ALL THE
LAWYERS? REPEAT PLAYERS AND STRATEGIC ADVANTAGE IN MEDICAL MALPRACTICE CLAM4S
6-9 (Am. Bar Found., Working Paper, 1992).




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system. In thinking about political activity that shapes the civil justice
system, we typically think first of activities like lobbying and supporting
favored candidates-activities focused on decisionmakers and changing
some set of formal rules in the civil justice system. The plaintiffs' lawyers'
view of the tort reform public relations campaigns, and the effects of those
campaigns on the informal market environment in which they work, suggests
that change may come without any alteration in the formal rules. We know
too little of the dynamics of these markets, and too little about efforts to
lobby the "public mind" and the general attitudes that help structure those
markets. We need to know more. 84
                               85
V.     Methodological Appendix

A. Interviews with Texas Plaintiffs' Lawyers
      We conducted in-depth interviews with ninety-six plaintiffs' lawyers in
Texas over the past several years. Only thirteen lawyers declined to give us
an interview. Of the ninety-six interviewees, twenty-two are from Austin,
twenty-eight are from the Dallas/Fort Worth area, twenty-one are from
Houston, twenty-three are from San Antonio, and two are from small towns
in East Texas. The four urban centers represent the largest concentrations of
lawyers in the state, and we presume that they also include the largest
numbers of plaintiffs' lawyers. We also interviewed a small number of non-
plaintiffs' lawyers-defense lawyers and judges.
      To create a pool of plaintiffs' lawyers to interview, we started with two
lists. The first was created through discussions with past and present offi-
cials of the Texas Trial Lawyers Association (TTLA). They were asked to
identify lawyers they recognized as leaders in the plaintiffs' bar as well as a
range of plaintiffs' lawyers with differing practices, abilities, reputations, etc.
Where appropriate, these conversations were supplemented by similar
discussions with leaders of local plaintiffs' lawyers' groups. The second list
came from published sources: Yellow Pages directories, Martindale-Hubbell,
West's Legal Directory, the Texas Legal Directory, and the Texas Board of
Legal Specialization Directory. Where available, published jury verdict
reporters were also used to identify lawyers. Names were then randomly
chosen from these two lists. Additional interview subjects were identified
through a "snowballing" technique of asking lawyers interviewed for the
names of others who would be worth interviewing (as we put it, "the names
of the good, the bad and the ugly"). We used this disparate set of sources


   84. See Daniels & Martin, supra note 6, at 456 ("Whether the reformers' efforts to lobby the
public mind have been.., successful is unclear....'). See generally DEBORAIi STONE, POLICY
PARADOX: THE ART OF POLITICAL DECISION MAKING (1997).
   85. This is a modified version of a methodical appendix that appeared in Daniels & Martin,
supra note 6, at 494-96.




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because our goal was to interview as wide an array of plaintiffs' lawyers as
possible, not just the big, well-known names handling the newsworthy cases,
and not just the members of plaintiffs' lawyers' organizations.
      The attorneys interviewed devote a substantial proportion of their
practices (50% or more, with a number as high as 90%) to handling
plaintiffs' cases for a contingency fee. The interviews were in-depth and
semi-structured, lasting on average for about 1.5 hours. In addition to their
perceptions of tort reform and its impact on their practices, the lawyers were
asked about their personal and professional background; their reasons for
choosing a plaintiffs' practice; the nature of their practice; the nature of their
clients; how their clients are obtained; their views on advertising and other
ways of attracting clients; their firm or office organization; their approach to
case screening, case resolution, and case financing; and their professional or
political activities.

B. Survey of Texas Plaintiffs' Lawyers
     Based upon the results of those interviews, we conducted a mail survey
of Texas plaintiffs' lawyers during the fall of 1999 into the winter of 2000.
The survey was sent to 2642 lawyers in Texas identified as likely plaintiffs'
lawyers. They were chosen from a list of 5284 provided by TTLA. That list
included current TTLA members, former TTLA members, and lawyers
identified by TTLA as "prospects"-lawyers thought to be practicing at least
some amount of plaintiffs' work who have never been TTLA members.
      In order to get the broadest possible sample from this list, we organized
all the lawyer (not firm) names first by zip code and then alphabetically
within zip code. The zip code ordering ensured at least some degree of
geographic dispersion, and the alphabetical ordering of lawyer names within
zip codes ensured at least some degree of dispersion among firms (otherwise
larger firms might have been over-represented). To select a sample, every
other lawyer name was chosen. Each lawyer was sent a questionnaire, and
those not responding within four weeks were sent another questionnaire as a
follow-up. Of the 2642 surveys sent out, forty-two were returned as
undeliverable, and a total of 720 lawyers responded (27.3% of 2642), with
554 useable responses (21.0% of 2642). A useable response is one from a
lawyer who either currently or in the past five years devoted at least 25% of
his or her practice to plaintiffs' work on a contingency fee basis. The 166
(720 minus 554) non-useable responses were from lawyers who did not meet
this threshold, and this represents 23.1% of the 720 surveys that were
returned. If we were to presume that this roughly represents the percentage
of lawyers in the original list of 5284 that would have not met the threshold,
then the adjusted population should be 4063. In order to achieve a
confidence interval of plus or minus four percentage points for a question
with two possible answers, we would need at least 524 useable responses for




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population of 4063. For the original number of 5284, the number of
responses needed for this confidence interval is at least 540.
      Throughout this Article, we use tests of statistical significance in
discussing the results of our survey. Tests of statistical significance are used
to determine whether observed associations in some sample reflect associ-
ations in the entire population from which the sample was drawn or whether
the observed associations happened by chance. To provide an example, we
can turn to Table 3 from the Article. In Table 3, we used the chi square
statistic to test the null hypothesis that there is no relationship between
geographical market and place in the hierarchy. What is important is not
simply the chi square test itself, but its level of statistical significance. We
can reject the null hypotheses and say that geographic scope of market and
place in the hierarchy are related if the significance of the chi square statistic
is less than .05. This figure (.05) is the standard level of statistical
significance used in the social sciences. According to one widely used
textbook: The level of significance of an observed association is reported in
the form of the probability that the association could have been produced
merely by sampling error. To say that an association is significant at the .05
level is to say that an association as large as the one observed could not be
expected to result from a sampling error more than 5 times out of 100.86
      The chi square in Table 3 of 115.010 is significant at the .000 level.
This means that the relationship found in the table between geographic scope
and place in the hierarchy for our survey's respondents is highly unlikely to
have happened by chance (less than one time in a thousand). It is important
to note, however, that tests of statistical significance do not say anything
about the strength or importance of the relationship-they speak only to the
probability that the relationship occurred by chance.87
      In addition to chi square, we used other statistics which are appropriate
for the particular data being discussed. Regardless of the statistic used, what
is important is the level of statistical significance. In reading those other
statistics, the logic described above for chi square about rejecting the null
hypothesis of no relationship should be used.




   86. EARLE BABBIE, THE PRACTICE OF SOCIAL RESEARCH 458 (6th ed. 1992).
   87. For a more extended discussion of these matters, see id. at 348-59.




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