For barristers and solicitors high profit margins are a good thing. Even judges benefit, in as much as high lawyer earnings support claims for judicial salary increases.
In fact, the lawyering game is hugely profitable compared to other businesses.
According to the Australian Bureau of Statistics firms of solicitors attain, on average, profit margins on turnover of almost 30 percent, with barristers exceeding 60 percent.
By comparison, accounting practices have to make do with less than 20 percent. Of course, many law firms are doing it tough, but that must mean the big lawyer earners are raking-in phenomenal profits.
While actually welcoming litigation expense, the profession has to be seen publicly to condemn it (as inhibiting access to justice).
One is reminded of Lewis Carroll’s story of The Walrus and the Carpenter (with those two as lawyers, and the oysters as litigants):
‘A loaf of bread,’ the Walrus said, ‘is what we chiefly need;
Now if you’re ready, Oysters dear, We can begin to feed.’
‘But not on us,’ the Oysters cried, turning a little blue.
‘After such kindness, that would be, a dismal thing to do.’
‘I weep for you,’ the Walrus said; ‘I deeply sympathise’.
With sobs and tears he sorted out, those of the largest size.
‘O Oysters,’ said the Carpenter, ‘you’ve had a pleasant run!
Shall we be trotting home again?’ But answer came there none –
And this was scarcely odd, because, they’d eaten every one.
The problem of running out of oysters is very real. As I pointed out in March this year, when English litigation lawyers largely priced themselves out of the market in the 1600s they decided to focus on whatever cases could support higher fees, and then found ways to extract those fees.
We still see that today, with small cases being abandoned to largely unlawyered tribunals, and with class actions (invariably against deep pockets corporates) being made easier to run, and with private lenders being offered a slice of the litigation action (previously denied to them) in exchange for their loans.
Where does this leave the judges? They don’t want to be over-worked (by their definition) but they don’t want the system to run out of oysters either.
Earlier this month Chief Justice Gleeson (pic) said:
“The expense of civil litigation is the greatest blot on the common law system.”
But what camp are the judges in? The public interest camp or the lawyer camp?
In 2003 Monica Attard of the ABC interviewed Justice Kirby and said to him:
“Chief Justice Gleeson also said the High Court requires the confidence of the legal profession over and above that of the public. Now that would seem logical, but is it true?”
Justice Kirby replied:
“I wouldn’t myself put it that way. I think it’s more important to have the confidence of the public, of the community whom we serve. However, it’s true that it has to enjoy the support and confidence of the legal profession.”
While the word “blot” implies something unwanted that is spoiling the appearance of something, different people may see different things in a blot.
The Rorschach ink-blot test is a psychological procedure in which a person’s interpretations of abstract ink-blot designs are analysed as a measure of emotional and intellectual functioning.
One ink-blot may be interpreted as a beautiful flower by one person, while someone else may see it as a nuclear mushroom cloud.
As the Chief Justice stared at the blot he saw the expense of judicial pay. Judicial pay indirectly impacts on the expense of litigation. The CJ observed:
“The government pays for judges; and it pays them much less than many litigants pay their lawyers.”
A good administrator of a Rorschach test, in my opinion, would have followed that up with a series of questions:
- Would you prefer to see judges being paid more or lawyers being paid less?
- Should the expense of civil litigation be increased to accommodate pressure (from judges) for higher judicial salaries?
- If lawyers were being paid less, would that mean prospective judges would need less money to entice them out of private practice?
- Would you care to name a few lawyers who regularly contribute to the “greatest blot” on our common law system?
Sadly, the CJ seemed unable to discern, and certainly unable to name, any particular faces in the blot.
A ton of sympathy, but not an ounce of practical help.