Attorney Lawrence Silver has been making a living representing injured workers for a long time 32 years. During that period, the sole practitioner served thousands of clients and built up a sizeable staff.
Although the Los Angeles lawyer has had to tolerate the “ambulance chaser” label often heaped on plaintiffs’ attorneys, he acknowledges he made a good living.
Those were the days.
Silver saw his business drop 30 percent from Sept. 2004 to Sept. 2005, causing him to lay off six members of his 20-person staff. That was particularly painful because his most “junior” staff member had been with him for 15 years.
“It’s been scary,” said Silver of Goldschmid, Silver and Spindel PC. “And I don’t think we’re out of the woods by any means. I have real concerns (about the practice) and I have real concern about my clients.”
Employers carry workers’ compensation insurance to cover costs of employees who are injured on the job. Employers claimed in the past that the system had gotten out of control, with premiums rising uncontrollably and lawyers looking for cases to press.
The workers’ compensation reforms that were passed by the state Legislature in 2003 and 2004 have had some of their desired effects, mainly by lowering insurance premiums. But in the process they have also put the squeeze on plaintiffs’ attorneys who made their living representing injured workers.
The reforms were intended to eliminate overspending on medical care, root out fraud and lower the system’s overall costs.
Lawyer’s fees are capped at 15 percent of the payout to injured workers. Since the payouts have been reduced, lawyer’s fees have been sliced accordingly. But lawyers only get paid if they win their case, which also is harder now.
Disputed claims in California the kind handled by plaintiffs’ attorneys were down 20 percent in 2005 to 121,083 out of approximately 1 million injury claims filed.
“Cases that were winners a few years ago are losers now,” said David Rockwell, a partner at Modesto-based Frailing, Rockwell & Kelly and president of the California Applicants’ Attorneys Association, a trade group representing workers’ comp lawyers. “And some attorneys won’t take the cases.”
Little sympathy
The plight of plaintiffs’ attorneys does not draw much sympathy from business groups and others with a stake in the system.
State Democratic leaders recently have talked about scaling back some of the reforms, which Gov. Arnold Schwarzenegger heavily backed, but groups such as the National Federation of Independent Business, which represents small businesses, have said they will fight any changes.
Arthur Silbergeld, a partner at Los Angeles-based Proskauer Rose LLP, who heads the firm’s labor practice and represents businesses in workers’ compensation disputes, said the reforms have been right on the money, allowing for criminal sanctions against workers who file false claims and by lowering awards to the workers. Even so, he said, there are plenty of cases to go around.
“I think the Legislature has seen the light and made it more difficult to file false claims,” said Silbergeld. “I think if you go to the workers’ comp courts which are not pleasant places to visit they’re still packed. There are still claims, but I think the claims are being managed better.”
Indeed, Rose Klein & Marias LLP, a Los Angeles law firm with 40 lawyers that has established itself as one of the region’s leading workers’ compensation firms, still reports plenty of work. But partner Marvin Shapiro acknowledged some other smaller-name firms aren’t doing as well.
“I’m not doing anything different than I did before. If a case has merit, then I take it,” he said. “If it doesn’t, then I don’t.” But Shapiro added, “I’ve seen the fortunes of the respective players ebb and flow.”
Count among those Ronald R. Dauzat, a sole practitioner in Glendale, who said he has seen his practice drop off 90 percent after the reforms were enacted. He had three staff members in 2004, but had to cut back to one.
“We had to stop taking cases basically because we were unsure of what the outcome (of the case) was going to be,” said Dauzat, who is now branching into sexual harassment and other employment litigation to make up the difference.
Like other plaintiffs’ attorneys, a key concern for Dauzat is the reduction in what permanently injured workers are paid for their disability.
The lawyers contend the lower award does not properly compensate workers.
Hanging on
As a result of the complaints, the California Applicants’ Attorneys Association is now drafting legislation that would raise payments for injuries and permanent disabilities. However, given the political climate, they are not expected to seek to raise the 15 percent cap on their contingency payments.
The association is specifically targeting new medical guidelines that are used to measure an injured workers’ overall impairment. For example, while carpel tunnel injuries once rated a 20- to 25-percent impairment they now only rate a 5 percent. That means workers who win receive less money. Dauzat said a back injury that was worth $23,000 in 2003 is awarded about $7,000 today.
In the meantime, attorneys are cutting staff and branching out to other fields, among other measures.
“We’re very careful,” said Silver. “There used to be things you knew you could win which are problematic now.”
Over the last few months, Silver said he has seen his caseload pick up again. He theorizes that workers may have been scared to file claims immediately after the reforms because they feared losing their jobs. Still, business is not at the level it was prior to the reforms and the firm is struggling to hang on to its remaining 14-person staff.
“From 2000 to 2004 you weren’t having those thoughts of ‘Am I going to be able to exist? How am I going to be able to pay the tuition for my kids?’ It’s a lot of pressure,” said Silver, who is bracing himself for upcoming college tuition bills from his two teenage children.
