Agreement for Legal Services - Contingent Fee/More Info

Agreement for Legal Services - Contingent Fee 
 Additional Information 
Ethical Considerations 

The Model Professional Rules of Conduct for the legal profession recommend that new clients be advised, preferably in writing, about the basis or rate of legal fees within a reasonable time after the law firm begins to represent them.  Many states have more stringent requirements.  For example, the state of New Jersey requires that the basis or rate of the fee be put in writing and if the services are for personal, family or household purposes, the agreement must be written in plain language.   

Contingent Fee Arrangements 

All states have some rules that regulate contingent fee arrangements.  Contingency fees are often limited in personal injury cases, and often in medical malpractice suits.  These limits vary widely.  However, it is rare to see contingent fees in any case in excess of one third of the total recovery.   

Some lawyers may suggest that these very laws dictate how much they must charge.  This is not true.  These rules set upper limits, but the final arrangement is a matter of negotiation.  
Contingent fee arrangements are not appropriate when a client is charged with a crime, if a client is a defendant (instead of a plaintiff) in a civil suit, in a divorce, in child custody matters and in other situations. For those other matters, the application includes separate agreements for hourly and flat fee arrangements. 

Other Charges 

The most important part of the arrangement between a lawyer and a client is the matter of fees. A related important matter is the lawyer's out-of-pocket expenses.  In a lawsuit, someone must pay for court costs, court reporters for depositions, travel expenses, investigators, exhibits and other matters.  In addition, a firm may desire to charge a client for more routine expenses such as secretarial services, photocopying and other items. 

One potentially serious issue is "Who pays for expenses if the client doesn't win the case?"  In many states, the firm can pay the cost of these expenses, as long as the client remains responsible to reimburse the firm even if he or she loses the case.  Even if the client is responsible, many lawyers elect not to pursue collection of expenses if their client loses his or her case, but you cannot depend that your lawyer will be so generous.   In other states, the obligation to repay the expenses can also be contingent on a successful result.   

Other Matters 

In addition to covering fees, a good agreement will address other items, such as the right of the primary attorney to delegate the client's work to other attorneys or paralegals in the firm, whether the law firm may employ outside consultants, such as investigators and experts, and a clear statement of the services to be performed.   

It is not unusual for an individual or business to have more than one law firm that provides services.  For example, a business may have general corporate work provided by one firm, its labor matters handled by another law firm, and any litigation handled by still another.  Whether you get all of your services from one large firm, or spread legal work around, is largely a matter of your discretion.  Some individuals and businesses like to know that all (or at least most) of their legal needs can be met in one place.  Others have developed their own network of individual lawyers with expertise in a particular area.   

What If You're Not Happy With Your Bill? 
Do not hesitate to talk to your lawyer if you think you have been charged too much.  Before you have that discussion, tell your lawyer that you do not want to be charged for the time spent discussing fee matters.   

If you are still not happy with the result, you may take your complaint to the state or local bar association.  There is a list of state bar association addresses and phone numbers in the Home Legal Topics.  Many bar associations have mediation or arbitration services for handling these disputes.  Ask if these services are available. 

Litigation Reform 
There has been much discussion in recent years about the need to bring reform to existing litigation rules.  Critics want to prevent groundless litigation and to put limits on how much courts can award plaintiffs in damages.  Some states have already enacted reforms, such as Oklahoma and Oregon.  In these states, a plaintiff who sues for certain kinds of torts and loses may be required to pay the defendant's court costs.  Be sure to discuss with your attorney whether any of these new rules may apply to your proposed lawsuit.