Can I negotiate costs/expenses in a contingency case? Or how to keep expenses low?

[fpbear]

What is the name of your state (only U.S. law)? CA

I have a very strong case against the city whereby the city damaged my house, and a lawyer with lots of experience/expertise in this exact area I'm dealing with seems really interested to take on the case on a contingency basis.

The thing I'm concerned about is that the fee agreement, as is typical, requires me to pay for costs/expenses win or lose (and the attorney will advance some of it). Specifically, I'm concerned that the lawyers will have a way to hire very expensive consultants and expert witnesses, and they will have a lot of travel expenses in fancy hotels etc. (since they are a little bit too far to drive to my county courthouse) and the costs/expensise can eat up eating a large chunk of the potential award.

I proposed to the attorney I will sign their agreement if they pay for a percentage of the expenses/fees out of their own pocket, but they didn't go for it.

I am wondering if it would be wise for me to persist in asking them to cover a portion of the costs/expenses on their own? The idea is that I want to create some incentive so that they don't stay in 5-star hotels, hire an overpriced consultant who happens to be a "friend" and so on. If they share in the risk of running up the expenses then I'm thinking they're more likely to be prudent with the spending to prepare for the case.

In my state of CA I believe it is ok for lawyers to pay for costs/expenses and I read some articles arguing that it's perfectly ethical even though sometimes people might think otherwise in some states.

Or - is there some other way I can keep the costs/expenses in check? Right now I feel like I would just be handing them a blank check.

 

[tranquility]

Go ahead and negotiate. It couldn't hurt. If you really have a strong case, they will lower the risk to you. Shop the case around too. You might get a better deal.

Remember though, lawsuits are tough business and rarely do well on the cheap. I wouldn't necessarily go with the cheapest bidder. I'd go with the person who will win--and who will help you get reasonable recompense for your damages.

 

[Rexlan]

I agree with tranquility - good advice.

Costs/expenses can effectively reduce your award to zero even if you win. I would structure an agreement such that you get a minimum of 85% of your share of the award net and that they will pay the expenses overplus out of their cut.

Additionally, the total dollar value of the case is important. If you can possibly get an award of $100,000 and expend $125,000 in the process then there is little value in it. That obviously diminishes rapidly downward with a lesser potential award.

Example:

Say the contingency is based on a 75%/25% split/fee. You win and the award is $100,000 then you get $75K, they get $25K.

Costs/expenses run up a total of $25K reducing your portion to $50K .... unacceptable. At 85% or your original award your net would be $63,750 and they pay the remainder out of their portion which reduced theirs to $13,750. A real incentive to not run up a disproportionate amount of costs/expenses or get creative with copying charges, phone charges (at their normal rates) and so on. You can also define the costs/expenses and exclude all the small things they will typically add in.

I would fashion the agreement along those lines or find someone else. If you have a strong case you will probably have no difficulty finding a taker.

In the alternate ask what the total expected costs/expenses may be and lock a "not to exceed" figure in, else the attorney pays the overage.

 

[Tex78704]

While you feel you have a 'very strong case', and your attorney may agree you have a case worth pursuing, the city apparently feels otherwise if they would rather litigate this case than settle for whatever you are asking for. If the money you are anticipating from the city is large enough to absorb 'costs' and a 30% cut for the attorneys, you are hoping for far more than actual damages, to the extent that you presumably hope to make a decent profit.

But as things often go with folks suing city governments, the only certainty is the lawyers will make money

While one certainly has a right to try their best to keep their expenses low during litigation, and some things are negotiable, persistent efforts by a potential client to dictate and micro-manage the way a reputable law firm handles its business will almost surely be met with a polite suggestion to seek counsel elsewhere. And from their initial response, you are halfway there. If you remain adamant, don't be surprised if they simply refuse to negotiate such terms any further.

If they are good attorneys, they are better skilled at calling bluffs than you are, and if they lose a few, that's a cost of doing business.

So before you push to hard on this attorney for more concessions, and burn that bridge, speak with other attorneys first to get their opinions on how strong your case really is, and how bad they want your case, and on what terms. You may find that their terms are the best the local attorney market will bear for your kind of case... or not.

 

[tranquility]

The government always litigates. (unless it is a vendor/contractual issue)

 

[fpbear]

The attorney agreed to share expenses.

I'm glad I asked for it. I think this will keep the spending in check when the attorney has a personal stake in the out of pocket costs.

Maybe this should be more common practice than how it is currently.

 

[Ohiogal]

In many places that is UNETHICAL for an attorney to pay the expenses.

 

[Tex78704]

The attorney agreed to share expenses.

I'm glad I asked for it. I think this will keep the spending in check when the attorney has a personal stake in the out of pocket costs.

Maybe this should be more common practice than how it is currently.

Which would lead one to believe your attorney is not as good... as he is hungry.

While it will keep costs down, it will result in a much more conservative approach to litigating this, and a safer return on investment for you and your attorney.

Ultimately, at less cost to the city, and the taxpayers... which is a good thing.

 

[Rexlan]

Which would lead one to believe your attorney is not as good... as he is hungry.

While it will keep costs down, it will result in a much more conservative approach to litigating this, and a safer return on investment for you and your attorney.

Ultimately, at less cost to the city, and the taxpayers... which is a good thing.

Wow ... I disagree and any attorney worth their paper will base the case on it's merits ... not because they are "hungry" ... LOL.

Sharing costs is as simple as not charging a client $1 page for copies!

 

[fpbear]

In many places that is UNETHICAL for an attorney to pay the expenses.

Interesting comment. I read a scholarly legal journal article about this which concluded that it is NOT unethical. It described the history of financial assistance to clients and why paying their costs viewed as unethical in some locations, and why this is a mistaken viewpoint. Now I wish I could find the link to this paper.

My attorney has 30+ years experience litigating and I suppose they could have raised the ethics issue if they wanted to use that as a negotiation point with me about sharing costs, but made no mention of such thing.

And no, my attorney is not "hungry" for a case. It's just that it's a much lower risk case than others.

 

[Tex78704]

The attorney agreed to share expenses.

So what expenses did the attorney stipulate to sharing in your signed agreement and on what terms? As opposed to his stated intent to do so?

 

[fpbear]

So what expenses did the attorney stipulate to sharing in your signed agreement and on what terms? As opposed to his stated intent to do so?

The standard section in the fee contract where it says "expenses for photocopying, travel, expert witnesses, consultants ..."

Anyway I think this is a good idea because there should be some incentive to be prudent with expenses, but at the same time I still help out to pay my share of these expenses so it's not going to be a burden on the attorney in any case. By the way I doubt attorneys would do this with high risk cases.. it's just that mine is pretty solid almost like it already comes with a value before we start.