Counsel, Your Crystal Ball Is Busted…

So you met with a new litigation client.

Your first take on her proposed lawsuit was that liability was a virtual slam-dunk and that her damages would be assessed in the area of $25,000, maybe $30,000 if you “hit a home run.”

Conservatively, you advised your client of your opinion that her claims appeared to have a great deal of merit and that a court’s assessment would likely be in the $20,000 to $25,000 range.

So imagine your client’s shock – and yours – when a pre-trial judge ultimately opined that this claim wasn’t very strong at all.  In fact, the judge’s view was that if liability could be established, which was by no means certain, damages were likely to be assessed at approximately $5,000. Perhaps $10,000 on a very fortuitous day.

So what happened?

Well, possibly the judge’s view wasn’t correct.

But more likely, what happened was “the predictable.” In fact, we can safely predict that the legal profession’s predictions aren’t always so safe, at all.

In fact, when it comes to predicting outcomes, lawyers, as as class,  tend to be unrealistically overconfident.

At least, that’s what the research tells us.

A 2010 study compared lawyers’ litigation forecasts with actual file results and found a significant proportion of lawyers were notably over-optimistic in their case assessments.  As the study’s authors noted in Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes:

Lawyers’ litigation forecasts play an integral role in the justice system. In the course of  litigation, lawyers constantly make strategic decisions and/or advise their clients on the basis of their perceptions and predictions of case outcomes. The study investigated the realism in predictions by a sample of attorneys (n
481) across the United States who specified a minimum goal to achieve in a case set for trial. They estimated their chances of meeting this goal by providing a confidence estimate. After the cases were resolved, case outcomes were compared with the predictions. Overall, lawyers were overconfident in their predictions, and calibration did not increase with years of legal experience. Female lawyers were slightly better calibrated than their male counterparts and showed evidence of less overconfidence. In an attempt to reduce overconfidence, some lawyers were asked to generate reasons why they might not achieve their stated goals. This manipulation did not improve calibration.

…In 32% of the cases, the final case outcome matched the goal set by the lawyers. Among the remaining cases, 24% of the outcomes exceeded the lawyers’ minimum goals, and 44% of the outcomes were less satisfactory than the minimum goals set by the lawyers. A number of lawyers who did not achieve the predicted goal erred on the side of underconfidence, because their minimum goals were too modest. However, a larger proportion of the prediction deficits came from lawyers who erred in the direction of overconfidence.

The take-away from this research is that  legal professionals appear to tend toward optimistic, but unrealistic bias in favour of our own clients’ positions.  We should thus exercise caution in assessing – and relying on – our own predictive abilities. 

Our early impressions about the merits of our clients’ claims may be coloured by the professional blind spots identified in this research.  We may also be swayed by our natural empathy for our clients or by incomplete information on opposing parties’ positions that may be available at early stages. 

In short, we should manage our own expectations about results – and the client expectations they generate – with extreme care.

Which brings us  to today’s Practice Tip:

Before predicting outcomes, take a closer look. Reality checking ought to start with us, not with pre-trial judges, months or years after the fact.

– Garry J. Wise, Toronto (@wiselaw on Twitter)