The results of the Report Card are grim. Of the 51 jurisdictions surveyed, 38 states received grades below C. No state earned an A. Three—New Hampshire, Vermont and West Virginia—flunked outright. Another eight states, including some with large lawyer populations like Illinois and Ohio, were sent home with Incompletes because they do not offer any sort of statewide system for resolving lawyer-client bill conflicts. Taking top honors were the District of Columbia and Maine, followed closely by arbitration programs in New Jersey, New York and California. But even some of the best systems are in need of substantial reforms.

After interviewing fee arbitration administrators across the country, analyzing statistics from the American Bar Association and examining court and state bar rules, HALT's Report Card based each state's overall grade on these categories:

Mandatory and Binding for Lawyers—No state requires clients to participate in fee arbitration, but eight programs are mandatory for lawyers and received an A in this category. In Alaska, California, the District of Columbia, Maine, New Jersey, New York and South Carolina, a lawyer must always submit to arbitration when a client files a claim. Lawyers in Wyoming must participate in arbitration if the client challenges the attorney's bill within 120 days. Voluntary fee arbitration programs, by contrast, will not proceed unless both parties agree to participate. Binding arbitration provides parties with a final ruling that can only be challenged if a procedural error was made. Most mandatory programs make their decisions binding on lawyers, with the exception of California, where the lawyer must participate at the client's request, but if one party does not want the decision to be binding, only an advisory opinion is issued.

Ease of Filing Claim—Our Report Card found that most fee dispute resolution systems host Web sites and many provide helpful online tools, brochures and assistance on the telephone. But seven states—Delaware, Hawaii, Kentucky, New Hampshire, North Dakota, Vermont and West Virginia—still make it difficult for consumers to initiate the fee dispute resolution process when an attorney has overcharged them. The North Dakota State Bar, for example, makes no mention of fee arbitration on its Web site.

Publicity of System—One of the most critical problems facing state fee arbitration forums is that so few consumers realize they exist. To achieve visibility, states such as Massachusetts, Minnesota and Washington advertise their programs in the local telephone directory, community publications and public venues, such as county courthouses. Unfortunately, numerous states, including Connecticut, Michigan and Missouri, refused to tell the American Bar Association where they publicize information about their fee arbitration programs. And Nevada and New Hampshire were among the many states that reported that they only include information about their fee arbitration programs in lawyer publications and venues frequented by attorneys.

Access to Non-Lawyer Arbitrators—Arbitrators ruling in lawyer-client fee disputes are usually lawyers themselves. If the money at stake exceeds a specified amount, however, a panel that includes at least one non-lawyer typically decides the case. The best systems are those that use lay arbitrators to help resolve most disputes. One state earned an A in this category. In Minnesota's Hennepin County, all cases are decided by two non-lawyers and one attorney. A staggering 15 states, including Maryland, New Mexico and North Carolina, do not ever allow non-lawyers to serve on arbitration panels and received Fs in this category.

Mediation Option—Mediation is a process in which a trained moderator does not issuing a ruling but helps guide clients and lawyers toward an amicable, non-binding resolution. Many states offer fee mediation as an alternative to binding arbitration, but our Report Card found that a handful, including Alabama, Idaho and West Virginia, actually require mediation before the parties are permitted to engage in arbitration. Consumers, who have typically already exhausted approaches for informally resolving the fee dispute, often report that they view the mediation pre-requisite as an undue obstacle toward obtaining a final resolution through arbitration.

Enforcement Methods—The fee arbitration process is valuable when the system uses formal methods to enforce awards. The most successful forums, such as those in Rhode Island and Washington State, hold the disputed amount in an escrow account pending the arbitration ruling and impose disciplinary sanctions when a lawyer fails to abide by the arbitrator's decision. But more than half the states told the American Bar Association that they do not use any formal methods to assist clients in collecting awards.

"By allowing lawyers to refuse participation in the fee arbitration process, hiding information from the public about the system, placing roadblocks in front of consumers wishing to resolve a fee dispute, stacking arbitration panels with attorneys and refusing to assist clients in recouping their money, fee arbitration programs across the country are routinely failing to provide a much-needed service to American legal consumers," stated Blonder. "Until there is meaningful reform, the legal profession has only itself to blame for the widespread public belief that lawyer fees are out of control and going unregulated."