Sometimes you run into lawyers and clients who just don’t seem to have any idea of proportionality. I won’t name names, but a couple of national firms are that way. So they might take case worth a few thousand and a) hire investigators to check out the other side, including credit checks and interviews with others to deal with them; b) spend unlimited amounts of money on depositions, research and other discovery; and c) litigate rather than settle even though the amount in question is far exceeded by the legal bills. After a while you know who these lawyers and clients are and (at least I can) warn the client about how the estimated costs of the case just went through the roof.
This seems to be unbusiness-like. So why do they do it? Well, some clients take the attitude that they will spend whatever it takes to win, but never settle (pay tribute). Sometimes this strategy is deliberate as it is intended to frighten off other disputants. Sometimes it is driven by the lawyers. In either case, the client needs to be aware of it.
But does a lawyer have an obligation to tell his client that the client is engaging in overkill? I think the lawyer has to tell the client that this use of their money may not be cost-effective. Ultimately however it is the client’s decision as to how hard to fight.