{"id":7961,"date":"2007-09-04T17:15:50","date_gmt":"2007-09-04T22:15:50","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/ethicalesq\/2007\/09\/04\/contingency-fees-and-the-clueless-"},"modified":"2011-08-05T14:53:43","modified_gmt":"2011-08-05T18:53:43","slug":"contingency-fees-and-the-clueless-fiduciary","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/ethicalesq\/2007\/09\/04\/contingency-fees-and-the-clueless-fiduciary\/","title":{"rendered":"contingency fees and the clueless fiduciary"},"content":{"rendered":"

\"\" A<\/em><\/strong>re personal injury [“p\/i”] lawyers virtually in the dark when they enter into contingency fee contracts with their clients — unable to tell which cases are likely<\/em> to be rather straightforward, resulting in a relatively quick, successful resolution without major expenditure of time or resources, or instead to be complex, and time-consuming with impossible to predict results?\u00a0 Does such lack of information force them to offer each client a “standard fee” (which is often one-third or 40%, and is usually the maximum permitted in their jurisdiction without court permission) rather than trying to tailor the fee offer roughly to the risk presented by each client’s case, as might be expected under professional ethics and fiduciary principles?<\/p>\n

Or<\/em>, on the other hand, can and do p\/i lawyers have sufficient knowledge and experience to make intelligent inquiries, choices and distinctions among clients, so as to greatly reduce the risk of working long and hard on a case without receiving adequate compensation?\u00a0\u00a0 That is, are they able to ask questions and make inquiries so as to have a rough idea of the risk status\/continuum of each case before they decide whether to accept it and make a fee offer to the prospective client?<\/p>\n

I refuse to believe that my p\/i lawyer brethren at the bar go around accepting clients in a clueless fashion, with no choice but to charge each client as if taking his or her case presented the highest acceptable risk to the firm’s financial viability, and with no hunch as to whether they have accepted a sure winner, a fair risk, or a true challenge.<\/p><\/blockquote>\n

My trust in the competence of p\/i lawyers is, however, apparently not shared by members of the plaintiff’s personal injury bar. (For a prior example, see this weblogger’s post<\/a>.) The latest example of Client Selection Insecurity Syndrome comes from Eric Turkewitz<\/a>, the NYC lawyer who is the proprietor of the New York Personal Injury Blog<\/a><\/em>. In his Aug. 31st Personal Injury Law Roundup #26<\/a>, Eric reacted to my recent posting “why do lawyers lie (about contingency fees?<\/a>,” which discusses whether such fees constitute value billing (Aug. 29, 2007).<\/p>\n

\"\" Moving to legal fees, Perlumtter & Schuelke wrote In Defense of the Contigent Fee<\/a> as a form of value billing — as opposed to the billable hour with its inherent conflict of interest between client and attorney. David Giacalone at f\/k\/a<\/em> didn’t like that, and attacked Perlmutter — OK, not just Perlmutter but attorneys in general who work on contingency — in a post entitled why do lawyers lie (about contingency fees)? Among Giacalone’s complaints, he asserts that “The client rarely is given essential information (such as the likelihood of success, the probable size of a recovery, and the amount of time and money that is likely to be invested by the lawyer) that would allow him or her to place a value on the lawyer’s participation.” There’s probably a good reason for that, being that the information is often unknown at the time the retainer is signed.<\/p><\/blockquote>\n

. . . . . . . . . . . . . . . . . . . . . . . . . . . ATLA: at least \"one <\/strong> bar assoc.<\/em><\/p><\/blockquote>\n

Before you start feeling sorry for the poor p\/i lawyer, who would have you believe he (or she) heroically jumps in to take your case regardless of the risk to himself (while charging you the maximum just in case<\/em>), remember a couple of facts:<\/p>\n