Personal Injury Contingency Fee 45%

[lkmiss]

What is the name of your state? CO

My family is involved in a personal injury case. We are on our second lawyer. Lawyer #1 didn't do much on our behalf. Our second lawyer is charging us a 45% contingency fee and fronting the money for the experts, indicating that our case is in the litigation phase and he charges more for that. He joined after the initial evidentiary disclosure phase, but before any depositions/experts. We also have another consulting lawyer on the case who has the necessary expertise who is receiving a small percentage, with the stipulation in our agreement with him that it would not cost us more to have him involved in the case. It is supposed to come out of the contingency fee of lawyer #2.

45% seems exceptionally high for lawyer #2 to be charging and I wanted to get opinions, as I know that 33-1/3% is more common in contingency cases.

 

[quincy]

What is the name of your state? CO

My family is involved in a personal injury case. We are on our second lawyer. Lawyer #1 didn't do much on our behalf. Our second lawyer is charging us a 45% contingency fee and fronting the money for the experts, indicating that our case is in the litigation phase and he charges more for that. He joined after the initial evidentiary disclosure phase, but before any depositions/experts. We also have another consulting lawyer on the case who has the necessary expertise who is receiving a small percentage, with the stipulation in our agreement with him that it would not cost us more to have him involved in the case. It is supposed to come out of the contingency fee of lawyer #2.

45% seems exceptionally high for lawyer #2 to be charging and I wanted to get opinions, as I know that 33-1/3% is more common in contingency cases.

The 45% seems high (33% to 40% is typical) but it can depend on what is covered by the fee. Contingency fee percentages are negotiable, by the way. Have you spoken to your attorney about the reasonableness of this figure?

Here is a link to Rule 1.5 of the Colorado Bar Rules of Professional Conduct on Fees (1/1/2022):

https://www.cobar.org/Portals/COBAR/Repository/10.20.22/Rule 1.5 (1).pdf?ver=uJy1SkATg7MC5B5x0z_wuA==

See Page 7 on Contingent Fees.

 

[zddoodah]

My family is involved in a personal injury case. We are on our second lawyer.

A "family" isn't a legal entity. Who is the actual client?

Our second lawyer is charging us a 45% contingency fee and fronting the money for the experts, indicating that our case is in the litigation phase and he charges more for that.

What does "charges more for that" mean? What is the nature of the case such that expert witnesses are needed?

45% seems exceptionally high for lawyer #2 to be charging and I wanted to get opinions, as I know that 33-1/3% is more common in contingency cases.

As far as what's common, contingent fee attorneys often charge X% if the case can be settled without suit having to be filed, Y% if suit is filed but the case settles before trial prep begins, and Z% if trial prep starts. What's common or customary varies from location to location, but the only thing that matters is what was agreed to between the lawyer and client(s).

 

[adjusterjack]

We also have another consulting lawyer on the case who has the necessary expertise who is receiving a small percentage, with the stipulation in our agreement with him that it would not cost us more to have him involved in the case. It is supposed to come out of the contingency fee of lawyer #2.

Does lawyer #2 know he is sharing his fee with the consulting lawyer? Anything in writing from lawyer #2 agreeing to that?

 

[quincy]

Lawyer #1 would generally have a right to a portion of the damages collected in the suit, for work he did prior to his replacement with Lawyer #2. Lawyer #2 might have been considering this split of the proceeds between him, lawyer #1 and the consulting lawyer when he set his fee at 45%.

lkmiss, make sure the terms of your attorney agreements are clearly understood by you. Speak with your lawyer to get clarification from him on anything you don’t understand, including the reason behind the 45% fee. Learn from your attorney exactly what it is covering.

 

[Taxing Matters]

Note that contingent fee arrangements vary depending on several factors, one of which is whether the client or the attorney is paying the costs in the case, like the costs for expert fees, etc. Note that costs are distinct from the fee. The fee is what the lawyer gets paid for his/her time. The costs are the other expenses of the lawsuit, like court filing fees, service of process, paying experts, the expenses of discovery, etc.

If the client pays the costs and only the lawyer's fee (what the lawyer receives for his/her time) is contingent then the contingent fee amount is less than if the lawyer pays all the costs (i.e. the fee and costs both get rolled into the contingent amount the lawyer receives). I practice in Colorado and a 45% contingent fee is not all that uncommon if the arrangement is the latter.

The most common arrangement is the former where the lawyer's fee is one-third of what is recovered in the lawsuit and that the costs are paid out of the rest of the award. If the costs are high, you may end up paying more than the 45% you are paying to have the lawyer cover costs (assuming that's what your agreement says, as I've not read it). If the costs are low, you'd do better with the one-third arrangement having costs deducted from your award/settlement. In short, these two approaches are about who bears the risk of high costs.

Make sure you read and understand the entire agreement. If you have questions about any of it, contact the lawyer and get the answers you need. The Colorado Rules of Professional Conduct that lawyers are required to follow has detailed rules about information a contingent fee agreement must contain. quincy already provided a link to those. You'll also want to be sure your current attorney knows about the consulting attorney you hired. It's extremely unusual for a client to hire an additional attorney for consulting on a case. That can cause problems if the two are not working together.