Lets Talk Contingent Fees Forum

[Veyron]

Why is a 2013 grad even asking this question?

Because its 2014 and not 2004 and firms are again willing to take things on contingency. Obvious question is obvious?

What firm is asking a first year to help them figure out what contingency cases to take? Sounds like Veyron needs real mentorship, and from an attorney barred in his state, not TLS.

No one is "asking" me. But I would like to be able to do it effectively and know my blind spots and not make more rookie mistakes. Our state rules make hybrid-contingency potentially very attractive for clients while still providing a revenue stream. And I have some small (1m/yr>) businesses that are potentially interested/have already retained.

Also, quite frankly I would like some mentorship but I don't know enough shitlawyers (in civil). I need to go find some I think. Shitlawyers are the most fun to hang with anyway.

[dead head]

What firm is asking a first year to help them figure out what contingency cases to take? Sounds like Veyron needs real mentorship, and from an attorney barred in his state, not TLS.

I assumed he hung a shingle.

And if he did find a local mentor he probably wouldn't be able to run around insulting them when they offer advice. Well, I suppose he could, but they probably wouldn't keep trying to help him like guano is here.

[Veyron]

What firm is asking a first year to help them figure out what contingency cases to take? Sounds like Veyron needs real mentorship, and from an attorney barred in his state, not TLS.

I assumed he hung a shingle.

And if he did find a local mentor he probably wouldn't be able to run around insulting them when they offer advice. Well, I suppose he could, but they probably wouldn't keep trying to help him like guano is here.

Most shitlawyers I know are fucked up bros. They think something is a little wrong with you if you don't insult them. I once blushed at a particularly vicious string of obscenity and got mocked for it for several months. This is why I prefer them as people. Biglawyers spend potentially billable hours watching sensitivity training.

[Dafaq]

As said to me by an experienced lawyer running a three person firm. If the D is simply trying to beat someone out of five figures and BK is not an option, take it. This is from someone who has attached a number of homes, real estate, boats, etc. from contingency cases. He said that he shies away from cases involving unsecured notes.

He said if the D is trying to sell, you have a better chance of collecting since most B/S agreements states the seller has to disclose pending lit and offering indemnification doesn’t always calm the buyer’s nerves. I suppose contingency is pretty well cut and dry and most times you'll be shooting from the hip.

[Veyron]

As said to me by an experienced lawyer running a three person firm. If the D is simply trying to beat someone out of five figures and BK is not an option, take it. This is from someone who has attached a number of homes, real estate, boats, etc. from contingency cases. He said that he shies away from cases involving unsecured notes.

He said if the D is trying to sell, you have a better chance of collecting since most B/S agreements states the seller has to disclose pending lit and offering indemnification doesn’t always calm the buyer’s nerves. I suppose contingency is pretty well cut and dry and most times you'll be shooting from the hip.

Golden. Have actually seen some pretty extreme examples of the later situation but never really thought of it from the other side.

[guano]

he shies away from cases involving unsecured notes

yeah, if someone's failing to make payment on an unsecured note, there's probably nothing there

[Dafaq]

That’s not particularly true.

If you fall behind in your payments the contract can be successfully litigated. You’d be surprised how quickly the D can come up with the $ when their assets are about to be auctioned. On the other hand, I know of someone holding the bag since the D managed to convey the assets to a third party. In this situation the D could successfully move forward and win…..nothing.

[kings84_wr]

In our Fee Agreement, we make it very clear that fees expenses come out after we take our fees. So for example, if its a 100k settlement with 10k in fees. We get 40k, then of the remaining 60k the fees are paid, and the client gets 50k.

Also know when (and to who) to send referral contingency cases. If a case requires too much investment/risk or if its just not something you can handle, there's a solid chance someone else will take the risk. Just make sure they aren't the type to screw you on the back end.

[Veyron]

In our Fee Agreement, we make it very clear that fees expenses come out after we take our fees. So for example, if its a 100k settlement with 10k in fees. We get 40k, then of the remaining 60k the fees are paid, and the client gets 50k.

Also know when (and to who) to send referral contingency cases. If a case requires too much investment/risk or if its just not something you can handle, there's a solid chance someone else will take the risk. Just make sure they aren't the type to screw you on the back end.

Will totally start writing the engagement letters that way. I've always just assumed that that was how we would do things but I can see how it pays to clarify.

The state bar screws me on the back end. No referral fees allowed. My general rule is that I only refer cases to people I think will refer me cases (or who already have) or have done me some other favor. If I refer you a case and you don't send one my way after that the next case goes to someone else.

[kings84_wr]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

[Veyron]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

My state has language to the effect of "fees must be proportional to the work actually performed." Is your state as strict?

[guano]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

My state has language to the effect of "fees must be proportional to the work actually performed." Is your state as strict?

So do a nominal portion of the work in exchange for a nominal fee.

alternatively, can you charge the client a consultation fee for finding the appropriate professional?

[kings84_wr]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

My state has language to the effect of "fees must be proportional to the work actually performed." Is your state as strict?

I think mine requires proportional work on the case or joint responsibility for representation. So we get around it, by including a clause in the contract that both firms are jointly responsible to the client (but in the end only the one firm does any work). We've never failed to pay an attorney who referred us a case, and I can't remember a referring attorney ever participating in the case (and frankly we don't want them near it). Generally the standard is 25% Referring atty 75% Referred.

The other state we do a lot of work in, might have language like yours. But to be honest, I have no idea. In the end if we pay out everytime, there's never going to be a fee dispute on our end.

And when it comes to MDLs and mass torts, we get cases from all over the country. Things get a little more challenging in those cases.

[Veyron]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

My state has language to the effect of "fees must be proportional to the work actually performed." Is your state as strict?

I think mine requires proportional work on the case or joint responsibility for representation. So we get around it, by including a clause in the contract that both firms are jointly responsible to the client (but in the end only the one firm does any work). We've never failed to pay an attorney who referred us a case, and I can't remember a referring attorney ever participating in the case (and frankly we don't want them near it). Generally the standard is 25% Referring atty 75% Referred.

The other state we do a lot of work in, might have language like yours. But to be honest, I have no idea. In the end if we pay out everytime, there's never going to be a fee dispute on our end.

And when it comes to MDLs and mass torts, we get cases from all over the country. Things get a little more challenging in those cases.

Edge of my seat. How do you handle the MDL/mass tort splits?

And how do you tell a client that there will be a referral fee paid?

[kings84_wr]

No referral fees is rough. I know some states require a "fee split" and joint representation language rather then a referral fee. We get around that by requiring each attorney to be equally responsible for representation. But the referred firm does all the work.

My state has language to the effect of "fees must be proportional to the work actually performed." Is your state as strict?

I think mine requires proportional work on the case or joint responsibility for representation. So we get around it, by including a clause in the contract that both firms are jointly responsible to the client (but in the end only the one firm does any work). We've never failed to pay an attorney who referred us a case, and I can't remember a referring attorney ever participating in the case (and frankly we don't want them near it). Generally the standard is 25% Referring atty 75% Referred.

The other state we do a lot of work in, might have language like yours. But to be honest, I have no idea. In the end if we pay out everytime, there's never going to be a fee dispute on our end.

And when it comes to MDLs and mass torts, we get cases from all over the country. Things get a little more challenging in those cases.

Edge of my seat. How do you handle the MDL/mass tort splits?

And how do you tell a client that there will be a referral fee paid?

We are almost always the referral firm. So Normally the referring attorney lets the client know before I ever talk to the client. But it takes some explaining. We have it explicitly broken down in the contract that 25% of the fees will go to x firm 75% will go to our firm.

MDLs are very tricky. There is a firm in our area that basically farms out cases for referrals ( I don't think they eve practice). So they run adds all over the country, screen the intakes, sign them up, and send them to us to do the work. Unless there is a state with very explicit rules, we generally use our same Contract for mass torts all over the country. Not my call, but I have a feeling there are some major ethical issues with the mass tort referrals (considering some states have very specific rules on referral fees). But I think our partners think that as long as we always pay the referring attys, and the client gets the same fee, there will never be an issue.

Another good tip if you ever go to trial , give yourself an extra 5% of the contingency if the case goes to appeal. If you get a nice verdict you need the extra 5% to hire an appellate attorney. Also don't do your own appeals.

To me the most foreign of referral fees/splits are public adjusters for property insurance/bad faith claims. I don't do this area, but my firm does. And basically the PA has some type of contingent interest in the outcome as a non-lawyer. Not sure how its ethical, but most states allow it.

[Veyron]

Another good tip if you ever go to trial , give yourself an extra 5% of the contingency if the case goes to appeal. If you get a nice verdict you need the extra 5% to hire an appellate attorney. Also don't do your own appeals.

How do I use the 5% to hire an appellate attorney. Are you saying that the D needs to pay out even if they are going to appeal?

[BVest]

Another good tip if you ever go to trial , give yourself an extra 5% of the contingency if the case goes to appeal. If you get a nice verdict you need the extra 5% to hire an appellate attorney. Also don't do your own appeals.

How do I use the 5% to hire an appellate attorney. Are you saying that the D needs to pay out even if they are going to appeal?

The 5% is a contingent fee as well, so you need an appellate atty willing to take the contingency.

More likely, the contingent fee, from the client's perspective looks like:

25% if settled before trial begins (with some definition of what "trial begins" means, in terms of briefs/answers/discovery/voir dire/etc.)
33% after trial begins
40% after a notice of appeal/appellate brief has been filed

Then you as atty use that increased contingent fee to bring in the appellate atty.

ETA: FWIW, 5% of a $3MM verdict is $150k.

[Veyron]

Another good tip if you ever go to trial , give yourself an extra 5% of the contingency if the case goes to appeal. If you get a nice verdict you need the extra 5% to hire an appellate attorney. Also don't do your own appeals.

How do I use the 5% to hire an appellate attorney. Are you saying that the D needs to pay out even if they are going to appeal?

The 5% is a contingent fee as well, so you need an appellate atty willing to take the contingency.

More likely, the contingent fee, from the client's perspective looks like:

25% if settled before trial begins (with some definition of what "trial begins" means, in terms of briefs/answers/discovery/voir dire/etc.)
33% after trial begins
40% after a notice of appeal/appellate brief has been filed

Then you as atty use that increased contingent fee to bring in the appellate atty.

ETA: FWIW, 5% of a $3MM verdict is $150k.

Thank you for all the useful info.

[smallfirmassociate]

- Is liability established? If any trial would only be on damages, this increases the value of your case and reduces the trial risk, as the trial would be short and relatively easy.

- Client credibility. If it's a PI matter or an issue where your client's testimony or statements about himself, his health, his lost wages, his efforts, or whatever, are important for the case, then it helps to have someone you can put on the stand.

- Can you defend MSJ? e.g. (1) Cause of loss. A lot of law is inching toward letting cases go to the jury (e.g. premises liability in newest restatement), but if the causal link is weak, judge will still likely grant MSJ. (2) Specificity of facts to plead. Do you have to put in a bunch of time and sunk costs to take depos to even find out what happened, or can you plead fairly specifically based on other information, documents, etc.; (3) Likelihood of retaining an expert witness. Some torts require an expert witness to survive MSJ. Do you have one who will support your case? Is he maybe at least half decent, or some expert whore from halfway across the country?

- D's reputation for paying. Some insurance companies pay out on decent claims, some prefer to litigate borderline cases. Same with healthcare providers and med mal.

I don't practice by contingency much--right now just I have one PI case--but those are some quick pieces of advice.