Legal Affairs: COMMENTARY
COMMENTARY: STEVE MEYERS: HE LOWERED THE COST OF JUSTICE
I admit it's hard to feel gratitude toward the man regarded as the father of tacky law-firm TV ads. But anyone who hires a lawyer today--whether a strip-mall divorce specialist or a $500-an-hour corporate litigator--owes some thanks to Stephen Z. Meyers.
The co-founder of Jacoby & Meyers, who died in a car crash on Apr. 19 at 53, never got much respect. Critics claimed that by peddling their services over the airwaves, the aggressive Meyers and his laid-back partner, Leonard D. Jacoby, induced people to file frivolous lawsuits. Perhaps. But the team also made it easier for people intimidated by lawyers to file genuine claims. More important, they were among the first to apply basic business principles to the practice of law. Two decades after the founding of Jacoby & Meyers, the legal Establishment that once tried to kill the firm has belatedly embraced many of its innovations. At a time when everyone complains about the high cost of justice, Meyers deserves recognition for injecting the first shot of competition into a monopolistic, frequently arrogant profession.
In 1972, when Jacoby & Meyers opened its first outlet in Van Nuys, Calif., most law firms were luxuriously inefficient. Attorneys billed time for tasks that paralegals could handle. Firms considered advertising beneath their dignity and operated as strict partnerships, requiring a cumbersome decision-making process. Many state bars "suggested" rates for standard services, discouraging price competition.
SLASHED COSTS. By reinventing the law firm, Meyers believed he could build the H&R Block of the legal world. Rather than inhabiting remote office buildings, Jacoby & Meyers hung out its shingle in shopping malls thick with potential customers, offered $15 initial consultations, and stayed open on weekends. It adopted a corporate model of governance whereby a small number of partners presided like executives over a large number of salaried employees. Model forms slashed the cost of standard services. Result: Jacoby & Meyers charged $150 for a simple divorce, compared with a State Bar of California suggested fee of $500.
Allegedly for the sins of advertising and accepting credit cards, the California Bar tried to boot out Meyers and his cohort. But the young lawyers fought back--risking their money and their license to practice. "It took a tremendous amount of courage to take on the bar. Very few people are willing to take that kind of risk," says U.S. Commerce Secretary Mickey Kantor, who became Meyers' friend in the early 1970s, when the two were legal-aid lawyers.
CROWDED FIELD. Jacoby & Meyers eventually won its fight with the California Bar. But things didn't turn out the way the firm's founders had hoped. With U.S. law schools pumping 50,000 graduates a year into the job market by 1990, the firm couldn't compete in an increasingly crowded field of outfits offering assembly-line wills, bankruptcies, and divorces. In 1994, the firm closed more than 40 offices and changed its focus to higher-paying personal-injury work. Then, Jacoby sued Meyers for breaching their partnership agreement last October. They quickly mediated the dispute, but it subjected the two to another round of merciless mockery.
That's a shame, because time has proved the firm's founders to be visionaries. Pressured by the oversupply of lawyers, law offices are adopting many of the innovations Jacoby & Meyers developed years ago. The starchiest firms are hiring consultants to teach them a friendly service ethos. Most are also taking steps to centralize management power. Large outfits such as Nynex Corp. save millions by training nonlawyers to crank out computerized forms. Others such as Chrysler Corp. eschew billable hours and pay fixed fees for legal work. Corporate legal spending is actually shrinking.
Steve Meyers was not a huge financial success as an attorney. And while he loved to portray himself as a champion of Naderite consumerism, he was just as much a hustler as an idealist. But in this he was a rarity: a lawyer who was also a gutsy, imaginative entrepreneur. The profession could use more of those.By Mike France