Dynamex, Broken Cites, and Turbulence at the Top of the Legal Industry
Altman Weil, a management consultancy, recently published the results of their annual Law Firms In Transition survey, which collected responses from more than half of all US law firms with 50 or more attorneys. What struck me most was Altman Weil’s assessment of where the legal industry stands in 2018–ten years after the Great Recession.
As Altman Weil sees it:
- technology is a threat to the business model of these larger law firms, and
- most firms have a false sense of security because profits are currently strong.
The implication is clear: efficiency is the enemy of the current law firm business model.
Unfortunately, pretending that everything is fine won’t prevent the threat or stave off the eventual crisis. Technology-driven change is coming, and it’s coming far faster than most lawyers realize.
The reason is simple: lawyer quality is far below the standard clients think they’re paying for. The Dynamex lawsuit — a case where the California Supreme Court recently upended the “gig economy” at the heart of Silicon Valley — demonstrates this in spades.
The California 20
First, a little background. Earlier this year we ranked the litigation departments of the 20 largest law firms in California:
We did this by analyzing briefs filed by those firms in California state court. The analysis was performed by Clerk, a program we developed to evaluate briefs across three main dimensions — Arguments, Drafting, and Context — and across various sub-dimensions within those.
Clerk is powered by advanced software and a detailed map of California law. These were developed over five years, and although far from complete, Clerk has far more knowledge of the law than any lawyer ever had or ever will.
Nevertheless, I was recently discussing Clerk and our law firm ranking with a friend of mine — a retired litigator from one of the 20 firms in our analysis — and his perspective was exactly what one would expect after reading the Altman Weil report.
My friend noted that he was personally a stickler for typos, but he didn’t think we could judge law firm litigation quality based on typos. More importantly, the law firm was doing well financially, and even expanding. In other words, business was booming, so what could be wrong?
First, his doubt was grounded in a significant distortion: the reduction of Clerk to a product that measures just a single menial-seeming task. Second, he was mistaken. Yes, you actually can judge a law firm’s litigation quality based on their typos.
The Broken Cites Theory
The underlying idea is simple:
Briefs that make small mistakes are more likely to make big mistakes.
I call this the “Broken Cites” theory, a legal writing analogue to the “Broken Windows” theory of criminology:
“visible signs of crime, anti-social behavior and civil disorder create an urban environment that encourages further crime and disorder, including serious crimes.”
While there’s considerable debate surrounding the Broken Windows theory (primarily around the proper police response), the Broken Cites theory has strong evidence supporting it — both statistical and circumstantial.
On the statistical side, our law firm analysis showed two important correlations:
- The lower a brief scored on Clerk’s cite checking component (i.e., the “typo” checker), the lower the brief scored on Clerk’s other, independently graded, components.
- For each of the dimensions and sub-dimensions Clerk evaluates — including the cite checking component — the lower the score, the more likely it was the brief would lose.
In other words, the more small mistakes a brief had, the more big mistakes the brief had. And the more big mistakes the brief had, the more likely it was to lose.
But that’s not all. 40% of the law firms in our analysis had misspelled the name of their judge in a brief, and the lower a firm’s rank, the more likely they were to have misspelled their judge’s name. This was despite the fact that Clerk’s scoring doesn’t incorporate whether the judge’s name was spelled correctly or not.
In other words, our determination of a law firm’s rank and their propensity to misspell a judge’s name are independent, which means the correlation between the two likely derives from a deeper cause: the law firm’s lax standards.
The thing is, none of this should be a surprise. Judges — the audience to whom these legal briefs are being directed — tell us that small mistakes matter.
In an article titled Tips from Justice Liu on brief writing, Daniel U. Smith and Ben Feuer identify nine tips from Justice Goodwin Liu of the California Supreme Court for writing effectively and persuasively.
The very first tip — a lesson Justice Liu learned while clerking for Justice Ruth Bader Ginsburg of the Supreme Court of the United States — is “Let perfection be the ally of the good.” The article explains that this means:
“be a careful writer and avoid even the smallest mistakes, so the reader will infer that you are also a careful thinker.”
But it’s not only judges that think this way — it’s a sizable portion of the world. There’s a reason The New York Times isn’t riddled with grammar mistakes. Yet lawyers continue to argue that despite having written language at the center of their profession, they are somehow different.
Lest I get bogged down on the topic of typos, it’s important to be clear that judges also think lawyers do a poor job in other ways. Our friends at Casetext recently reported — in a post titled “You’re Bad at Legal Research, and Your Judge Knows It.” — that judges discover precedent missed by the litigants all the time and it matters:
“A survey of over 100 federal and state judges revealed some pretty shocking statistics. First, every single judge we surveyed said that they or their clerks have discovered relevant precedent that the parties before them missed. Over a quarter of judges (27%) said that they or their clerks catch missing precedents the attorneys should have cited “most of the time” or “almost always.” The vast majority of judges (83%) say that they see this problem at least some of the time. A small minority (16%) say they rarely, but still sometimes, catch litigators missing cases they should have cited in their submissions. And again, literally not one of the more than 100 judges surveyed said this wasn’t a problem at all.”
Putting these together, the Broken Cites theory tells us that issues with missing precedent are linkable to errors with citations — as well as other serious mistakes.
A walk through the California Supreme Court’s recent decision in Dynamex Operations West, Inc. v. Superior Court — and the Dynamex brief arguing its case — suggests just how intertwined and damaging these errors can be.
Dynamex
The Dynamex decision is perhaps the most consequential California Supreme Court opinion of the year. It changed the test for whether an individual is an employee or an independent contractor (in certain circumstances), and its impact on “gig economy” companies such as Uber, Lyft, and Instacart is going to be huge.
While adding Color to the Dynamex decision, we decided to run the parties’ briefs through Clerk to see what it uncovered.
The results were shocking.
Dynamex — the defendant — was represented by two of the lower ranked law firms in our analysis: Littler Mendelson (rank #17) and Sheppard, Mullin, Richter & Hampton (rank #20). (The team from Sheppard Mullin later moved to McDermott Will & Emery, which took over the representation of Dynamex.) Incidentally, both firms had misspelled the name of their judge in a brief in our prior law firm analysis.
One of the first things we noticed when we ran Dynamex’s opening brief through Clerk was the Drafting score. It was one of the lowest Drafting scores we’d ever seen — falling in the bottom 5% — with numerous citation errors like:
and misquotations like:
But, as we’ve seen before, the drafting errors were accompanied by other more substantive missteps.
Clerk also checks to see if a brief is sufficiently balanced in its argumentation: does the brief both present arguments that support its side and also present arguments that attack the other side?
Since Dynamex was the defendant and petitioner (i.e., the appealing party), Clerk expected to see more discussion of relevant plaintiff-winning cases (that support Dynamex’s opponent) than it found. Clerk suggested Guerrero v. Superior Court — a plaintiff-winning case not addressed in the brief:
Guerrero ended up playing a big role in the Supreme Court’s decision. Moreover, reading between the lines, it looks like the Supreme Court felt Dynamex’s counsel — Littler Mendelson and Sheppard Mullin — should have addressed the Guerrero opinion since the Court of Appeal decision they were appealing had discussed it:
This is precisely the type of missing-precedent mistake that the judges surveyed by Casetext identified. And the Dynamex case shows it even happens before the California Supreme Court.
In relying on Guerrero, the Supreme Court distinguished Dynamex’s preferred cases: Arnold v. Mutual of Omaha Ins. Co. and Arzate v. Bridge Terminal Transport, Inc. (shown in yellow in the above Color-ized excerpt) — as well as a few cases that the court chose not to name. One of those unnamed cases was Monarrez v. Auto. Club of S. Cal. (2012) 211 Cal.App.4th 177.
Clerk notes that Monarrez is “not citable,” which makes Dynamex’s citation to it concerning:
That is because prior to July 1, 2016, California Court of Appeal decisions were automatically depublished when the California Supreme Court granted review (pursuant to California Rules of Court, rule 8.1115).
The California Supreme Court granted review of Monarrez on February 13, 2013, automatically depublishing Monarrez and making it a nullity — a case with no precedential value, and which lawyers are prohibited from citing in their legal argumentation:
Checking whether a case like Monarrez is still good law is one of the first tasks students learn to do in law school. That’s because judge-made precedent is the cornerstone of our Common Law legal system, but the precedent evolves over time.
It’s hard to overstate the importance of verifying the citability of a case — and the severity of counsel’s mistake here. The clearest expression of it is the language California judges use when addressing this type of error — using words like “evil” and “sanctions”:
Taking a step back from the brief, there’s a bigger problem here.
Dynamex lost. So the law firms can’t argue, “the mistakes don’t matter — we won.” They could argue, “it was a lost cause, so the mistakes still don’t matter.” But will they?
Did Dynamex think they were fighting a lost cause? Dynamex was the appealing party, which makes it doubtful they believed they were plowing money into a hopeless fight. But if they thought they could win, did they get the quality of legal representation they expected?
From Here To Eternity
By now it should be clear to lawyers that two big changes are beginning to cascade through the legal industry.
First, automation is raising the standard of care for lawyers. Simple errors like typos are evidence that one of two things has happened: the lawyer didn’t care to avoid the errors, or the lawyer did, but performed a sloppy job. The former indicates a level of carelessness no client wants to pay for; the latter adds both insult and injury — having to pay for the low quality manual work.
Clients won’t put up with either.
Second, now that software such as Clerk can perform this kind of objective evaluation automatically, the quality of lawyer work product will increasingly be monitored. Courts will be doing it. Clients will be doing it. And they’ll be doing it with technology — bypassing the traditional bottlenecks and expenses that kept lawyers in the clear for far too long.
While this may scare lawyers, it’s good for society and ultimately the legal industry.
As Justice Louis Brandeis famously wrote:
“Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”
Lawyers don’t want to hear that their current practices are outdated and unacceptable, but they are. One of Altman Weil’s recommendations is that law firms “Pick up the pace.” I think we’re going to see that.
