Friday, February 21, 2014

Why Lawyers Should Learn How To Count

There is an old running joke that lawyers can't count. A joke that lawyers themselves embrace in good nature, so much so that many may even believe it to be true. 

What load of nonsense! Lawyers should know how to count, and count well. If they don't, then they suck as lawyers. There are no two ways about it. Previously, when I was in practice, I took meticulous care in breaking down a client's claim (or claim against my client) into hard numbers. Right now, I get annoyed when external counsels fail to spot anomalies or keep pushing back queries to me, on things that can be detected and resolved by anyone who has basic grasp of logic and mathematics.

This is not a rant against lawyers. Rather, this is a timely, well-intentioned open message to the lawyers (so that they treat their ability to count seriously) and to the layman (so that they be wary of lawyers who don't).

1. Law is based on logic

1+1=2. That's mathematics. Drop the numerical digits, and the result will not differ. If I have one apple on my right hand, and another apple in my left, I therefore have two apples. That's logic.

People often lament that studying law is hard, since it involves heavy memory work. That's not quite true. Yes, most legal principles are laden with tons of legal authorities (full judgments of previous cases - that can run from 10 to 50 pages on average - written by judges to explain the reasoning behind their decisions). But when you think about it, most legal principles are ultimately based on logic.

Take contract, for instance. If a person breaches a contract, such person must compensate the other person, usually by doing something (such as paying money) to restore the innocent person to the position had the contract been properly performed. If they sign a written contract, then later verbally agree to make changes and act on these changes, neither person will be allowed to go back on their second verbal agreement and insist on the strict terms of the original written contract.

Next, take tort. If you buy a bottle of ginger beer, only to find a dead snail inside, you are entitled to sue the manufacturer. If you enter a supermarket, and the ceiling collapses onto your head, you can sue the owner. In both cases, there is no need for the victims to prove that the manufacturer or the owner neglected to take steps to maintain the safety of their products or premises. The facts speak for themselves. The burden shifts to the defendants to explain why they should not be held responsible.

Take away all the fancy jargons like 'estoppel' and 'res ipsa loquitor', and law becomes simple to understand. A former boss once told me that where you perceive there is injustice, there is surely a legal authority to address such injustice. That's how a legal mind ought to function. Start with what you think the legal principle is, then search for the legal authority to support it - and not vice versa. Or in scientific terms - start with a hypothesis, then find the proof.

Complex principles are simply made up of basic principles. Legal solutions are deduced by weighing the facts of the case and legal principles together. It's not exactly an arithmetic exercise (unless you're calculating damages), but it's certainly an exercise grounded on logical thinking.

A great lawyer is a master of logic. A master of logic certainly knows how to count. Work that logical chain backwards, and it follows that a lawyer who doesn't know how to count well makes a poor lawyer.

This is Lord Atkin, in the famous case of Donoghue v Stevenson (1932), essentially telling us peeps that look here, it ain't cool to hurt your neighbour, capish? 

2. Law involves probabilities and predictions

In real life, legal issues aren't exactly like mathematical problems, in that there is not necessarily one right answer to every legal issue (although Ronald Dworkin begs to differ). Take the supermarket example. What if the victim was a burglar who broke into the supermarket in the dead of night? Would it be right for him to demand compensation for his injuries? 

The hardest part of a lawyer's job is not so much to identify the applicable legal principles (for and against his client's case), but to inform his client with a high degree of confidence, if not certainty, the relative strength of the client's case. Some lawyers shirk from giving firm answers, often taking refuge behind vague catchphrases like "good, arguable case" and "remote likelihood of liability".

What do these phrases even mean? Can they not be expressed in raw numbers, like percentages, which everyone can relate to? "No," lawyers doth protest, "because there are too many variables and permutations". Fair statement, but isn't it a lawyer's job to sift through legal complexities? So what if there are conflicting legal authorities and scarcity of evidence (internal factors), or that the judge is hopelessly incompetent and the opposing party is represented by a sneaky lawyer (external factors)? No matter how many variables are there, probabilities of legal outcomes can always be quantified, if one analysed hard enough.

Whenever queried by a client, I have never held back from expressing my estimation on the success rate of a case. Either I specify a number (60%) or at the very least, a narrow range (60%-70%). If the case is complex - say, it involves five issues - and if the client really wants to know, I could even go a step further and predict which way the judge will rule on all five issues. That's how meticulous and confident I can be. 

Not all my predictions turn out to be accurate, of course. Nevertheless, I do make many more right calls than wrong ones. A few of my superiors have remarked that I have a good sense of judgment and intuition. Occasionally, they even frame their strategies loosely based on my predictions.

A great lawyer dares to make bold predictions on legal outcomes. After all, what every client really wants to know is not what the law is, but what does he stand to win or lose.

Every lawyer should have this. It's called a "calculator". C-A-L-C-U-L-A-T-O-R.

3. Law is about managing risk and client expectations

Law is not built on absolute formulas and fixed variables. There is always information hidden from us, and outcomes happening beyond our control. No legal solution is completely free from the element of risk.

Risk - now, that's a concept that everyone understands. To the layman, law is merely a means, not an end by itself. There is a host of legal instruments created specifically for the purpose of risk-management, such as mortgage (managing the risk of a debtor defaulting) and insurance (managing the risk of one falling sick or injured). 

For example, take a simple contract of goods. Your client is the buyer. He pays a deposit to the foreign seller. The seller fails to deliver the goods, and absconds with the deposit. Your client is livid. He instructs you to sue the seller. But you advise him not to sue, write-off the loss, and move on with life - your preliminary detective work revealed that the seller is a shell company devoid of any assets. Your opinion does little to placate him. "Is there no way the law can help me recover my money?" he rages. 

Actually, there is. Or rather, there was. For this transaction gone bad, it's a bit too late. But for future transactions, there are a few legal devices that could be used to avert this from happening again. The easiest way is not to pay a deposit, and agree on cash-on-delivery (COD) terms. Or instead of a deposit, your client could have provided the seller a letter of credit (LC) issued by a bank which undertakes to pay the seller only if the conditions of the contract are fulfilled. Of course, there are drawbacks - the seller may hike up the price for COD transactions, procuring an LC would incur additional cost.

It is not enough for a lawyer to identify risks, but also to compare and quantify them. Saying that risk-management is not within your expertise is poor excuse. Lawyers are expected to have multi-disciplinary skills. A lawyer is mindful of practical matters - the effectiveness of foreign courts to enforce judgments, the reliability of trustees or stakeholders handling your client's assets, and the behaviourial traits of your client's counter-parties. Through a mixture of common sense and experience, a lawyer must warn his client of all possible pitfalls on a specific matter, flagging key areas with varying levels of risk (e.g. green, yellow or red).

A great lawyer is able to see the multiple facets to a legal problem, and not just the legal technical facet. He appraises his client of legal risks in practical and economic terms, and recommends cost-effective solutions to minimise those risks.

This is how a courtroom battle plays in the mind of a true lawyer. You can't change the cards that you're dealt with. But you can play with the stakes and opponent's mind.

Beyond The Law

Why are lawyers so averse to numbers, probabilities and risks? Perhaps it's because lawyers, by their very nature, tend to be perfectionist. They fear the unknown, and hate to lose and be proven wrong.

Nothing ventured, nothing gained. Fortune favours the brave. Win some, lose some. That's life. Lawyers should not be afraid to take chances in making bold predictions and strong recommendations. If one is truly sound in logic, one will eventually make more right calls than wrong ones, and help more clients prosper than suffer. After all, according to the law of large numbers, results of random events will even out close to average expected value over the course of numerous attempts. If you're good, statistics will be on your side.

So lawyers, please stop thinking that you don't need to count, and start learning how to count. The better you count, the more your clients will count on you.

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