"CHEATING CLIENTS WITH THE PERCENTAGE- OF-THE-GROSS CONTINGENT FEE SCAM" by
W. William Hodes
Car / Auto Accident Lawyer
The rule in my office is that the client never walks away with less in his/her pocket than I do. I've used this rule my entire 35 year career.
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Criminal Defense Attorney
Have never seen the article and Google wasn't my friend in trying to locate a copy. Generally speaking though, contrary to some suggestions I have heard over the year, a client has the power in a contingency representation negotiation. He or she can always decide to not sign with an attorney if if is felt the counsel has not completely addressed any and all concerns as to how any settlement will be proportioned.
Please do your own homework assignment. In any given factual scenario it may appear as if the client or the lawyer was cheated. However, the measure of the reasonableness of a contingency fee contract is at the time it was created – not after the fact and many, many hours of work.
Not every personal injury case will put money in a client’s pocket. There are just too many variables. In fact, the client could lose a lot more than what is perceived to be the value of the case if a judgment is entered for defendant. The client could end up owing the defendant substantial costs. That is the nature of litigation.
In CA, at least, the client who enters into a contingency fee agreement with his attorney must be appraised of the method of fee calculation and be given an example of how it is computed. The client must also be advised that, except in medical malpractice cases with fee caps, the fee is not set by law but negotiable between attorney and client.
The lower the percentage contingency fee, the greater the likelihood it is computed on gross settlement amount. Most firms, and I believe most attorneys, have an informal unwritten rule that, despite the actual numbers and agreement, the firm will not take more in fees than the client receives in settlement, absent extraordinary circumstances.
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