Contingency Fees

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Contingency Fees

We never charge hourly fees.

All of our work is done on a contingency fee basis – our fee is a percentage of the recovery we obtain for our client. If we don’t get money for our client, we don’t get a fee, and we lose the money, the costs we’ve paid to prosecute the claim.

If you have a personal injury or wrongful death claim and a lawyer asks you for an hourly fee, you are talking to the wrong lawyer! A lawyer who asks for a hourly fee is either unschooled in personal injury law, has no belief in the merits of your claim, and/or is just dishonest. Never pay an hourly fee to a lawyer in a personal injury claim. If you do you are probably “throwing good money after bad.”

Contingency fees are very attractive to clients who do not have the resources to pay a lawyer to represent them. Even very wealthy people usually don’t want to pay a lot of money in a case that may not work out. The contingency fee protects the client from a double injury, the first physical injury caused by the negligent defendant, and the second financial injury having paid a lawyer for an unsuccessful case. Contingency fee lawyers advance the costs of prosecuting the claim (and lawsuit) and are reimbursed for those costs only when the case is settled or won at trial.

At the end of the case the picture can look a lot different. Now the case has been won or a settlement reached. The risk is gone. And the attorney’s fee looks like way too much, usually one-third, or 40% if the case settles at trial or there is a judgment following trial. Clients need to remember that the fee is warranted because of the risk the lawyer takes in making a commitment to the client to spend the time, effort and money necessary to get the best result possible in a case that may result in no fee at all, and a loss of the costs spent to prosecute it, sometimes tens of thousands of dollars, or more.

In California, contingency fees must be in writing. If not written, the lawyer cannot charge a contingency fee, and is limited to “a reasonable fee” for the work done on the case. (Business & Professions Code §6147.) If a lawyer has a dispute with a client about a fee, the lawyer must notify the client of their right to Mandatory Fee Arbitration (Business & Professions Code §6201.) Fee arbitration is a chance for the client to get the dispute resolved without having to hire another lawyer and face the prospect of paying fees to two lawyers.

I just finished a case where I represented some clients, who live out of State, in a dispute with their former attorney over his contingency fee. The case involved the fair division of a wrongful death settlement between a step-mother/widow and three adult children, and whether the lawyer was entitled to a contingency fee – a percentage of the settlement. It was an eye-opening experience for me. The power imbalance in the attorney-client relationship, even where one of the clients was also an attorney (but not a personal injury attorney) allowed the attorney to really bully his clients. Their only chance of standing up and resisting the pressure of this lawyer was to hire another lawyer – me – and potentially pay two personal injury lawyers’ fees!

The former lawyer had no written fee agreement for the contingency fee he was seeking. He had not notified the clients of their right to fee arbitration. And worse, he had not disclosed in writing the potential and actual conflicts of interest presented by him representing the widow and her estranged step-children, which is a very serious ethical violation prohibited by California Rules of Professional Conduct, Rule 3-310 (C).

I didn’t like what I saw happening and I agreed to represent the clients for a reduced fee, one that made sense for them in light of the risk that the dispute would be decided in the former lawyer’s favor, resulting in way too much of the settlement going to attorneys’ fees. I was jumping into a dispute involving a colleague in the Bay Area plaintiff’s personal injury bar, a partner in a well respected law firm here, on behalf of clients who lived half way across the country.

Now the case is over and I am so glad I did it! I got a great result for three deserving people who lost their father. And I saw the attorney-client dynamic from the clients’ perspective. I saw a lawyer misuse his power to make more money, and it made me more sensitive to the way I treat my clients. It also made me think again about contingency fees and how they look to clients, in the beginning and at the end of the case.