The 5 Biggest Reasons Expert Witnesses Don’t Get Paid
The 5 Biggest Reasons Expert Witnesses Don’t Get Paid
Steven Babitsky, Esq.
As a consultant to expert witnesses, I receive calls about assistance in deposition and trial preparation, report writing, Daubert issues, etc. However, by far the most frequent issue expert witnesses call about is their failure to be paid promptly and in full by retaining counsel. Here are the 5 biggest mistakes expert witnesses make which lead to their failure to be paid:
1. Lack of a well drafted retention contract
Many expert witnesses start an assignment without having a signed retention agreement. When retaining counsel fails to pay promptly, the expert’s legal rights to insist on payment are complicated due to the lack of a written agreement spelling out the financial terms of the assignment.
A computer expert witness accepts an assignment from retaining counsel after a telephone call. The expert does 30 hours of work ($400/hr.) and submits his invoice. Counsel, after benefitting from the expert’s work complains about the invoice, quality of work, excessive research etc. and offer to pay $4,500. They finally agree on $6,000, or 50% of the invoice.
Have a well-drafted retention contract spelling out retainers, billing, billing rates, and collection before starting your assignment.
Many experts are so excited to receive a new, challenging, and potentially lucrative assignment they fail to obtain a reasonable retainer before they begin working. This is a serious mistake. Having a retention agreement plus a reasonable retainer is even better. Experts should estimate how much time it will take to start the assignment and obtain a retainer sufficient to pay them their hourly rate (i.e. 5 hours at $500/hr = $2,500.) When the retainer is depleted, they should replenish the retainer so they do not fall far behind in payment. The further you fall behind, the more likely it is you will not be paid in full.
A psychologist expert witness agrees to her standard $1,500 retainer. Counsel ships her 2 banker boxes of records to review. She puts in 6 hours of work at $400 per hour. When she bills the retaining lawyer, he refuses to pay, citing various excuses, lack of money, poor outcome, excessive work, etc. The expert witness suffers serious financial problems due to the lack of payment.
Obtain a retainer sufficient to do your preliminary work. Here, the expert should have definitely requested a much larger retainer before even starting to work on the assignment.
3. Beware of some expert witnesses services
There are many well-established and honest expert witness services and referral agencies. Unfortunately, not all of them make a priority of getting the expert witness paid. Expert witnesses, unfortunately, are on the losing end of these arrangement.
A patent expert witness is approached by a referral service with a new assignment. He does 90 hours of work at $500 per hour. The service, then informed the expert witness that the retaining lawyer will only pay $15,000 for the work performed. When the expert expresses his outrage, the expert witness service reminds the expert that:
His contract with the service says he will get paid only if and when they get paid.
Under the contract he is not permitted to contact the retaining lawyer.
The expert cuts his bill by 60% to get paid.
Be wary of arrangement such as the one above, especially where you do not have an ongoing relationship with the expert witness service.
4. Accepting last minute assignments
Expert witnesses who accept last minute “rush” assignments stand a much better chance of not being paid in full. Due to the compressed time, the normal protocol of the expert (i.e. retention agreement, retainer, replenishing retainer, etc.) is waived often with devastating results.
Orthopedic expert witness accepts a large rush assignment which needs to be completed within 7 days. Counsel promises his expert fees will be “expedited.” The physician drops everything, works nights and on the weekend, and puts in 50 hours on the assignment at $600 per hour. He sends his lengthy detailed report to counsel, who uses it to settle the case. The lawyer then expresses “outrage” over such a large bill for only 7 days of work and threatens the physician with legal action. With little other recourse, the physician compromises his bill for 50% of the invoice.
On rush assignments, remember it is counsel who is in a rush and needs help. Experts should demand a substantial retainer before starting to work, even on rush jobs. This is one of the benefits of FedEx or electronic transfers. In these circumstances experts should bill daily, not at the end of the assignment to avoid any confusion about the time spent on the assignment.
5. Price sensitive retaining lawyers
Expert witnesses who accept assignments from price sensitive retaining lawyers do so at their peril. How can the expert tell if the lawyer is price sensitive?
The lawyer complains about the retainer.
Counsel needs “time” to pay the retainer.
The lawyer advises the expert that the case is a small one so the expert needs to hold down his bill.
Counsel restricts the expert’s work to hold down expenses.
A financial expert witness is retained. She is told she does not have to look at tax returns and will be provided with excerpted portions of key depositions to hold down costs. The expert proceeds with these restrictions and is severely embarrassed at deposition when her opinions are ripped to shreds due to the documents she was not provided. The case is lost, the expert’s reputation is damaged, and counsel uses this as an excuse not to pay her bills.
Expert witnesses should walk away and decline assignments when they know or suspect retaining counsel is price sensitive. These assignments can result in ruined reputations and large outstanding unpaid bills.