Fed. R. Civ. Proc. 53 permits a judge to appoint a "special master" to resolve complicated pretrial matters that the judge does not have time to do; most state courts have similar procedures. Such special masters are typically experienced attorneys who charge the full billing rate of experienced attorneys; rather than being put out for competitive bid, judges often pick a friend for the lucrative assignment. The existence of a rule as a safety valve allows courts to handle heavier dockets, but that in itself has its own distorting effects. A judge has reduced incentive to narrow the scope of discovery; heck, the privilege log disputes alone can generate hundreds of thousands of dollars, and create unreasonable standards that add tremendous expense to litigation beyond what is paid to the special master.
A recent scandal in New York reported by the Daily News suggests other possible problems: in 1999, Manhattan Supreme Court Justice Sherry Klein Heitler appointed Laraine Pacheco special master in a series of asbestos cases, and in 2005, Pacheco was making $368,000 a year overseeing settlement discussions. Pacheco lost her lucrative position last week when it was learned that she had overbilled parties—including city and state taxpayers—$400,000. Pacheco had previously come under fire for wanting to hold these settlement discussions near her vacation home in Tucson, Arizona, inviting lawyers to do so as a junket (and suggesting they shop at her daughter's jewelry store).
This is an area that merits much more study by the legal reform community.