Thursday, July 14, 2005


In the Albuquerque Journal, in an op-ed July 13, 2005, Professor Alan Reed opposes the proposed minimum wage which may be considered in Albuquerque. He criticizes (Democrat Party Chairman) John Wertheim’s op-ed supporting a referendum on a minimum wage increase. He says that Wertheim's article ". . . trots out images of suffering people without the slightest evidence that such suffering occurs. . . ." He refers to Wertheim's support of an increase in minimum wage (even if it has to be by the City) as ". . . Wertheim's old socialist gambit...," and says it appeals to ". . . the lowest human instincts."

In the nuclear family, we follow the rule, from each according to her ability, to each according to her needs, to paraphrase the socialist. Those are not low human instincts. They are unwise beyond the nuclear family, as unworkable, just as advice to the rich man to sell is property and give the proceeds to the poor, is unworkable and discourages production of goods and services. But, Professor Reed, with due respect, they are not low instincts. The minimum wage law is government interference with the right to contract, and with the free market; but so is the forty-hour week, and workers' compensation legislation. So are the sugar tariff, farm subsidies, and the oil and gas depletion allowance (27% is okay until you reach 100%, but it keeps on going).

Professor Reed says the market sets wages. Maybe the market should be allowed to set wages, but the law can also set (a floor) under wages. He states that the original reason for such laws was not to [merely] share the wealth, but "... They are a statement that exploitation of workers, often new immigrants, would not be allowed...." Is such legislation (to increase the minimum) wrong? Or is it right, as just raising the minimum to keep up with inflation? Of course, if the principle of a minimum wage itself is wrong, then there should be no new legislation, by the City or otherwise, raising that minimum.

Reed says there is only so much money in a business. If minimum wage earners under today’s minimum get more under a new minimum, then some higher paid wage earner must take a cut. Does that necessarily follow? How about management (read that CEO) taking a cut? How about the owner (promoter, or stockholders) taking a cut? If Reed means that every additional dollar paid to the present minimum wage earner, must come from somewhere in the business, then he is correct. But it is not accurate to say that it necessarily comes from higher wage earners.

Is it all right for people to hire others to work and pay them any wage the worker is willing to work for? Even if the wage is below what is necessary to live in decency and health? Maybe so. A good argument can be made against minimum wage laws. But Professor Reed does not forthrightly come out and say he is against all such laws. He speaks of part-time immigrants without much education or language skill, being minimum wage earners. Is he speaking of part-time in the sense of seasonal, or does he think the immigrant only wants to work a few hours a day? That immigrant would probably be willing to work with a short hoe, cultivating the chile in Southern New Mexico; but should our government allow an employer to work a person that way?

Reed seems to be against the principle of minimum wage laws. However, he does not say so. He says not many people are forced to work for the minimum wage we presently have, and that those are probably not breadwinners. That does not answer the question as to whether such a statutory minimum, a mandatory floor, a government interference with the right to contract, is justified in any case. Why does he not address that issue?

With due respect, Professor Reed, it would seem to me that we should have no minimum wage, or we should increase the minimum to keep up with inflation.

Tuesday, July 12, 2005


We lawyers in New Mexico have been reminded of our obligation to report lawyers who charge unreasonable lawyer fees. In an Ethics Advisory Opinion issued May 30, 2005 (State Bar Bulletin, Vol. 44, No. 21), the State Bar of New Mexico Ethics Advisory Committee referred to a case that was reported to it by an attorney representing an insurance company. The facts of the case were recited by the Committee:

“Two minor members of a family are injured in a motor vehicle accident. The lawyer representing the two injured parties requests from the insurance carrier immediate payment of one million dollars ($1,000,000.00) based on the lawyer’s understanding of the insurance policy limits. The insurance carrier, through no work of the lawyer representing the injured parties, informs the lawyer that the policy is actually three million dollars ($3,000,000.00), which the carrier immediately agrees to pay.”

The lawyer representing the insurance carrier questioned the reasonableness of a potential $1,000,000.00 contingent fee for work believed mostly involving phone calls, which was in an uncontested matter, and was not novel, difficult nor time-consuming.

The Committee gave the reported case as an example of the type of case that should be reported if a lawyer believes a fee that she charges, or the fee that another lawyer charges, is unreasonable because excessive. In other words, a lawyer should report herself if she charges an excessive fee; and she should report any other lawyer who charges an excessive fee. To fail to do so is a breach of a mandatory duty of a lawyer, and such failure also violates the public trust.

The question was posed as follows: "QUESTION PRESENTED: Does a lawyer have an obligation to report what the lawyer believes to be an unreasonable fee charged by another lawyer?" The answer was stated as follows: "SHORT ANSWER: Yes. A lawyer has a mandatory duty . . . to report professional misconduct. Charging an unreasonable fee is misconduct . . . ."

I understand and of course will be governed accordingly. Report yourself if you charge an excessive fee; report the other attorney if she charges an excessive fee.
I do have a question, however. It has to do with cases in which the lawyer represents the State of New Mexico or its political subdivisions in litigation (say suing the tobacco companies) or legal work (say handling bond issues), and purportedly gets her fees from a party other than the State or political subdivision.

For example, two firms are hired to assist the State in suing the tobacco companies. They negotiate a settlement as part of a national settlement. They get a fee of $24 million dollars for 18 months’ representation. They recover for the taxpayers, the sum of $1.5 billion. My question is not whether the $24 million fee is excessive, but whether it is a fee paid by the taxpayers. Some say it does not cost the taxpayers anything, because the tobacco companies pay it.

Another example. The lawyer is hired by the County Commissioners to handle a bond issue. The agreement is that the lawyer will get her fee from the company which seeks the backing of the Commission so the bonds can be issued to help the company with a project. Say it is an industrial revenue bond. Say it is a huge issue, and the company wants it so badly that the company is willing to pay millions to the County if the bond issue is approved by the Commission. The Commission, with the services of the lawyer, negotiates a deal. The deal is that the taxpayers get $86 million; and the lawyer gets $400,000. My question is not whether the lawyer did $400,000 worth of work, or whether the fee is excessive, but whether the fee is actually paid by the taxpayers. Some say it does not cost the taxpayers any money, that the developer (the company) pays it.

Before we attorneys can know whether to report what we consider to be excessive fees, it would help us to know whether the taxpayers are in essence being charged the fee in these cases. Does Big Tobacco care whether they pay the private counsel hired by New Mexico to assist the Attorney General in joining the national lawsuits, or whether they pay the taxpayers? Does Intel, for example, care whether it pays $400,000 to the attorney hired by Sandoval County Commissioners, or whether Intel pays the money to the taxpayers?