. . .Carolyn Elefant at MyShingle reports this morning on a law suit out of Utah, where a successful fen-phen plaintiff is attacking, among other things, the 40% contingency fee charged by her attorney — arguing that the attorney did very little work and faced very little risk in the case, making the percentage charged unreasonably high. (Salt Lake Weekly, “Contentious Contingency,” by Shane Johnson, Jan. 29, 2004)
You don’t have to come to this site very often to know that I believe a contingency fee must relate to the apparent risk to the lawyer (e.g., click here), so I will be looking closely to the results of this suit. Carolyn asks what I believe is a frequent but inapt question about the choice facing p/i clients. Here’s her statement and my Comment:
“I can’t help but wonder this: if the clients had been given the option up front of paying, say, $10,000 out of pocket to retain Barton to pursue their claim or alternatively, to pay nothing and allow him to recover 40 percent, which would they have taken? Of course, that didn’t happen, so we’ll never know. However, I often wonder how willing clients would be to risk a decent sum of their own money for a purportedly “sure thing.” If a client isn’t willing to take this risk, shouldn’t the attorney then be compensated at a higher-than-typical average rate for assuming risk in the form of fronting case costs and working on contingency?”
DAG Comment:
The client should not have to choose between a large upfront payment to a p/i lawyer and an unreasonably large contingency percentage fee. The ethical lawyer gives the fully informed client the choice between (a) paying an hourly fee, after being given a good faith estimate of the likely number of hours the firm will put into the case (and perhaps the chance to pay on credit, if a recovery is highly likely), AND (b) a contingency fee level that is related to the perceived risk for the lawyer, and not simply a “standard” rate. See, e.g.,Fiduciary Duties and Contingency Fees [harvard.edu].