The Litigation Boom: When Lawsuits Become the Default Solution

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The Litigation Boom: When Lawsuits Become the Default Solution
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This article explores the rise of litigation in modern society, highlighting the impact of advertising on the legal profession and the unintended consequences of laws that encourage lawsuits. It argues that while litigation serves a purpose, it has become the default solution for resolving disputes, often at the expense of efficiency and amicable solutions.

The legal landscape has transformed dramatically in recent decades. Once, lawyers adhered to a self-imposed ban on advertising, considering it unprofessional. This changed in 1977 when the Supreme Court declared such bans unconstitutional, paving the way for the deluge of legal advertisements we see today. Lawyers in the U.S. now spend an estimated $2.4 billion annually on advertising, a testament to the profitability of litigation.

In Colorado alone, law firms invested over $40 million in advertising in 2023. This expenditure isn't born out of desperation but rather a calculated strategy. Litigation has become increasingly attractive, fueled by a growing number of laws that encourage lawsuits. Over the past two years, Colorado's legislature has passed 53 bills that create new avenues for legal action.While lawsuits are sometimes necessary, they should be the last resort. Often, disputes can be resolved amicably without involving a lawyer. Unfortunately, the current system incentivizes attorneys to escalate matters, prolonging conflicts and driving up costs. Consider a scenario where an employee loses their job and believes they are owed $20,000 for unpaid commissions. They could attempt a direct resolution with their former employer or involve the Colorado Department of Labor. However, hiring a lawyer often leads to an expansion of the claim, with accusations of retaliation and illegal discrimination added to the mix. This increases the legal fees and damages sought, ultimately benefiting the lawyers at the expense of the original parties involved. Similarly, construction defects in multi-family housing often become fodder for lawsuits. While legitimate issues may arise, the involvement of lawyers and engineering firms often leads to inflated claims and unnecessary litigation. The goal of a lawyer is to resolve the problem and secure their fee, typically 40-45% of the total recovery. This creates a system where lengthy legal battles become more profitable, even when a simpler, quicker solution exists

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