{"id":4673,"date":"2004-01-24T20:01:07","date_gmt":"2004-01-25T00:01:07","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/formerlyknownas\/2004\/01\/24\/undergrounder-feels-under-att"},"modified":"2011-08-05T15:00:29","modified_gmt":"2011-08-05T19:00:29","slug":"undergrounder-feels-under-attack-by-ethicalesq","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2004\/01\/24\/undergrounder-feels-under-attack-by-ethicalesq\/","title":{"rendered":"Undergrounder Feels Under Attack by ethicalEsq"},"content":{"rendered":"

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I’ve spent way<\/EM> too much of my Saturday leaving Comments<\/A> to a <\/FONT>posting<\/FONT> this morning by Evan Schaeffer<\/A> <\/STRONG>of <\/FONT>Notes from the (Legal) Underground<\/FONT><\/A>.  Evan seems surprised that I could <\/FONT>respond<\/FONT><\/A> yesterday to a humorous “riposte<\/A>” by him<\/FONT>, with both a little humor and a little serious ethics discussion.    <\/FONT><\/DIV>
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Evan say he refuses to address the ethical issue concerning contingency fees, because its “not the focus” of his website.  Nonetheless, he states:<\/FONT><\/DIV>
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\"treasure  “Call me a coward, but I’m not going to take Mr. Giacalone’s bait, at least not right now, except to say the contingency fee system isn’t broken and doesn’t need to be fixed. In the real world, injured people who need a voice to speak for them often don’t have the means to pay that voice by the hour. So some of them agree to pay when the case is over, happy to allow their lawyer (that is, me) to assume the risk that the case might yield nothing at all, in which case I’ll be paying the costs. All things considered, I usually charge a third, sometimes more, sometimes less. (With that said, I recognize the benefits of Mr. Giacalone’s weblog and his commentary on legal ethics, and look forward to reading it. However, I’m not going to direct my clients to his site, as he suggests in his post, before they sign with me. Sorry.)”<\/FONT><\/DIV><\/BLOCKQUOTE>
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I’ve never attacked the basic concept or use of contingency fees, and instead support it.  (see the many listings on our Fees<\/A> resources page).  My gripe is with the use of a standard contingency fee<\/EM> — with a firm offering virtually all of its clients the same fee, with no offer to negotiate the level, regardless of the merits of their case — rather than tailoring the fee to the risk involved to the lawyer in each case.   At best, Evan’s argument above explains why a contingency fee can be good for many clients.  Well, sure.<\/FONT><\/DIV>
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As Public Citizen said last year in a filing<\/A> opposed to the Common Good “early offer” proposal:  <\/FONT><\/DIV>
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“It is widely accepted that contingency fees should vary<\/STRONG> depending on the<\/STRONG> riskiness and complexity<\/STRONG> of the individual case; indeed, that is what the ethical rules currently require (even though almost universally honored in the breach<\/STRONG>).”  [emphases added]  <\/FONT><\/DIV><\/BLOCKQUOTE>
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As we<\/A> then replied, decrying Public Citizen’s lack of action to help p\/i clients (as opposed to p\/i lawyers):<\/FONT><\/P>
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\"complaint . . .<\/FONT><\/P>
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The meaning of Public Citizen’s admission is clear:  Although the percentage rate of a contingency fee is ethically required to relate to the riskiness of each particular case, they “almost universally” do not.  Since p\/i lawyers customarily reject the most risky cases and almost always charge the maximum percentage allowed in their jurisdiction for the cases they do take, a large percentage of contingency fees are greater than can be justified<\/STRONG> by the risk taken by the lawyer of working without adequate compensation.  Put another way, in a significant percentage of p\/i cases, plaintiff’s lawyer is paid an excessive amount of the client’s award and the client is cheated<\/STRONG> out of a portion of his or her fair share.  In those cases, the lawyers receive unreasonably high fees, in violation of their ethical obligations.    <\/FONT><\/P><\/BLOCKQUOTE>
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ABA Formal Ethics Opinion 389 (described and discussed at length here<\/A> and here<\/A>) lays all this out clearly, interpreting the same ethical rule on fees that exists in Illinois<\/A> and Missouri<\/A>, where Evan Schaeffer practices.<\/FONT><\/DIV>
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The entire plaintifff’s tort-p\/i bar appears to be afraid to address those ethical issues directly.  Evan uses much of the space at his weblog to defend p\/i lawyers and the contingency fee system.  Yet he claims that the ethics of contingency fees is not his focus.  That is exactly what’s wrong with the way p\/i lawyers use contingency fees: they want to automatically apply their percentages, without any concern for whether the results unfairly and unethically take money from their clients.  I guess Denial runs Underground in the world of tort law.<\/P>
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