Civil Justice… to Fee or Not to Fee?
A 40 percent contingency fee negotiated by a Manhattan law firm retained by the widow of a real estate developer involved in a multimillion-dollar estate dispute was not “unconscionable on its face,” an appeals court ruled yesterday.
The court said that “at first blush,” the 40 percent fee — worth about $42 million — that was claimed by the law firm, Graubard Miller, from Alice Lawrence, the 83-year-old widow of the real estate developer Sylvan Lawrence, “might arguably seem excessive and invite skepticism.” (Quoted from today's New York Times )
But also quoted from the Times,
“What the courts recognize is that a fee agreement is not unconscionable simply because it can produce a big fee,” Mr. Zauderer said. “You have to look at the value rendered to the client.”
Without knowing more, I can't weigh in. The average contingency fee is somewhere around 30%. I want to know more: about the client, Mrs. Lawrence, her financial situation at the time the arrangement was made, whether it's possible she could have been taken advantage of, how much work was involved for the lawyers, the level of complexity of the issues at hand, how long they estimated the whole thing would take, chances of winning, etc., etc., etc. The new lawyers for Mrs. Lawrence say they will probably continue to challenge the old lawyers' fee, so perhaps they'll have an opportunity to get into these details.
Some more general questions for us to explore: For those who oppose the fee: is it exorbitant/unconscionable because it's 40%, or because it amounts to $40 million for the lawyers? What if the case had a 10 percent chance of success? What should be the determining factor in an attorneys fee's unconscionability? For the proponents of the fee: at what point is enough enough, no matter how complex the issues, no matter how much time the case will take, no matter how many lawyers are working on the case? Is there a contingency, percentage-wise, that is just too high, regardless of the details at hand?
Scanning the blogosphere for others' thoughts, this blawger shares his/her insights about contingencies generally:
"America awards risk and hard work. When an attorney takes personal resources, time and money, and invests in a case, the attorney deserves to be paid exactly what the employer (client) agreed to pay him. This is especially true if the employer (client) is making a large amount of money as well as a result of the attorney’s efforts."
As an aside, I wish there were a way to measure and compare the level of disdain for high attorneys' fees for plaintiffs' lawyers against disdain for the more uniform and predictable, and less risky high salaries of in-house lawyers and lawyers who work at corporate defense firms. (Disclaimer: I summered--interned--at 2 big private sector firms and really enjoyed my time there. This isn't to disparage those in that field. I'm just sayin'.)
Hmmm...I wonder what kind of arrangement Mrs. Lawrence has with her new lawyers?