There’s an old saying; the only winners in a messy trial are the lawyers.
It’s not strictly true. Litigants often have fantastic wins in the courts, righting wrongs thanks to the hard work of dedicated lawyers. But we need to acknowledge that trials can be very expensive.
As a rule most decent lawyers will do everything to steer a dispute away from court as the costs can quickly eat-up whatever money the litigants were fighting over in the first place.
The news this week that rugby star Israel Folau is raising a $3 million to fight his sacking by Rugby Australia has, understandably, divided the nation.
Without offering an opinion on Folau’s beliefs, social media posts or subsequent sacking, my reaction as a lawyer has centred on the money he’s seeking.
$3 million for legal fees is a lot.
Given most people don’t understand “where the money goes” in a trial, I thought I’d offer some insight into what might be going on behind the scenes in this very high-profile dispute.
Firstly, Folau would have engaged a top-flight law firm, the kind you find among the clouds in a skyscraper. So right off the bat, take whatever you thought you were going to spend and double it.
Big law firms can get great results, but they charge like wounded bulls. Every six-minute increment of the day is billed back to the client without fail. Every phone call, every email opened, every document browsed, every scribble on a sticky note, checking your phone at lunch … it’s all getting billed.
Then there’s disbursements; court lodgement fees, photocopies and the like.
There’s a joke that some big law firms refer to their photocopier as the “Senior Partner” as it generates so much income for their business (as much as $1 per page) and a case like Folau’s will require plenty of paperwork. It’s not uncommon in a blockbuster trial to see research and a brief that’s 10,000 pages long.
Copy that eight times to share with the team and it’s easy to see where the money starts to get eaten up.
Next expense is the lawyers themselves.
Solicitors charge between $350 to $600 per hour for their services, and upwards of $700 for a top gun, so it’s not outrageous to think Folau is paying about $4000 a day per Solicitor. It’s a fair assumption he’s got a team of three or more on his case, too.
Now that you’ve got your team it’s time to go to trial, and that means hiring a Barrister (or team of Barristers) to argue your case through the courts. For a top-notch lead Barrister working out of Sydney, expect to pay upwards of $10,000 a day during the trial.
So for a team of three Solicitors, a Barrister and a lead Barrister, you’d be lucky to get much change out of $40,000 per day of the trail.
As a rule of thumb, for every $1 you spend in the trial, you match it with $1 spent in preparation. So a week-long trial at $40,000 per day? That’s $400,000 including preparation.
Add to that $80,000 in copying and disbursements (which is extreme) and another $50,000 just for the sake of it and it’s still almost impossible to see where the other $2.4 million is going.
I’m not suggesting that Folau is profiteering from this fundraising effort, because there’s other costs to consider too.
This battle is as much about hearts and minds as it is the law, so there’s probably a PR firm engaged too, whose job it is to paint Folau in the best light possible given he’s also being tried in the “court of public opinion”.
You could easily see another $500,000 eaten by a PR firm worth their salt which still brings our total to just over $1m.
Let’s add another $500k to be generous, bringing the total bill to $1.5 million – half what he’s raising.
So what happens to the rest of the money? Does he keep it? Here’s the question nobody’s asking … what if Folau loses?
Rugby Australia, who’re defending their right to shred Folau’s contract would have a similarly powerful legal team on their side, also likely to spend upwards of $500k to $1M and it’s a loser pays system.
So Folau, who has chosen to fight his sacking (which is every bit his right) not only has to cover his own legal bills, but potentially those of his former employer should he lose his case.
Would that be limited to $3m? Hard to say. It’s worth noting that Rebel Wilson was ordered to pay $4.1 million in costs in her battle with Bauer Media … enough to quickly shrink a property empire, that’s for sure.
It just goes to show that in this case, the only winners might indeed be the lawyers.