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Lack of A Retainer Can Cost Lawyers’ Their Fee

by Carolyn Elefant on February 15, 2005 · 22 comments

in Ethics & Malpractice Issues, Retainer Agreements, Setting and Collecting Fees

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Next time you find yourself thinking about letting the retainer agreement requirement slide (“I trust the client,” or “There’s no time,” are some excuses that might run through your mind), think again.  Lack of a retainer agreement one can cost you your entire fee.  That’s what happened in the case desribed in this New York Lawyer article,  No Retainer = NY Firm: $0; Client: $205,000 (2/15/05).

According to the article, client Bazerjian filed a pro se claim to the September 11th Victims Compensation Fund.   Disappointed with the amount he received, he subsequently decided to retain attorney Santucci to pursue an appeal.  A week after the initial meeting, Santucci represented Bazerjian at a hearing and recovered $205,000, $140,000 more than Bazerjian initially was given (as an aside to those who wonder whether lawyers actually add value, this is a perfect example that they do).   Subsequently, Santucci sought to collect from his client 25 percent of the increase or roughly $35,000.

When his client would not pay, claiming that he was never given a retainer or told what the case would cost, Santucci sued.  The judge sided with the client, writing that: “Plaintiff’s failure to provide a letter of engagement or a signed retainer was deliberate, and not a result of being ‘impracticable,’…”Clearly, plaintiff has not complied with [the New York Codes, Rules and Regulations].” (Klein, Calderoni & Santucci v. Bazerjian, 22351/04.)  Santucci had argued that the short time between the initial client meeting and the hearing precluded a retainer, but the client stated that he never retained the attorney and “was uncomfortable” with his presence at a hearing.  In the absence of the retainer, the judge denied Santucci any recovery.

Personally, I find this result overly harsh.  I can certainly understand the judge denying a contingency recovery in the absence of a fee agreement.  A contingency arrangement needs to be explained in detail to clients.  And when clients don’t understand all of the risks and alternatives, they may feel cheated down the line – as did this client.   Had Santucci committed the terms of the contingency to writing – that recovery would be based on the difference between what the client had recovered on his own and the appeal, that he would take 25 percent rather than the standard third, etc…the agreement would undoubtedly have been found reasonable.

But at the same time, I wonder what the client was thinking.  Did he really believe that an attorney would show up fully prepared for a hearing such that he could triple the award the client received pro se and not expect anything in return?  I would have liked to see the judge ask the client what he expected to pay.  And if the client claimed that he did not want the attorney at the hearing, I would have asked him why he didn’t say so instead of letting the attorney represent him.  At the very least, I think the client ought to pay an hourly fee because retainer agreement or not, the attorney’s participation in the case did confer a substantial benefit to the client.

The reason that there are retainer agreement requirements is to protect clients from overreaching attorneys.  But attorneys can’t forget – retainers also protect us from overreaching clients.  My gut here (and again, it’s not supported by any facts; I can’t even find the court’s opinion) is that this client was in fact advised of the terms of the contingency and conveniently “forgot them” when he saw how quickly the attorney dispatched his case.  The reason for my speculation?  First, the client had initially filed a pro se claim and thus, may have been more sophisticated than other attorneys.  Also, the language that the client used in his response to the court – “I never actually retained Mr. Santucci or his firm to represent me.”  The term “actually” is a wiggly phrase – why didn’t the client simply deny outright that he never hired the firm?

Sure, there are many bad lawyers who’ll claim clients agreed to terms that they didn’t.  But we shouldn’t forget that there are also bad clients who’ll do the same.  And that reinforces the importance of the retainer:  because in one writing, it guards both groups, lawyers and clients, from the darker sides of each other.

  • Biens

    I have no sympathy for this law firm.
    The law is weighed in favor of laypersons and individual consumers. Lawyer knows better. All fee agreements should be in writing.

  • Biens

    I have no sympathy for this law firm.
    The law is weighed in favor of laypersons and individual consumers. Lawyer knows better. All fee agreements should be in writing.

  • http://legalblogwatch.typepad.com/legal_blog_watch/2005/02/yep_i_trust_you.html Legal Blog Watch

    YEP, I TRUST YOU! NOW HAND OVER THAT RETAINER

    The next time you consider

  • http://legalblogwatch.typepad.com/legal_blog_watch/2005/02/yep_i_trust_you.html Legal Blog Watch

    YEP, I TRUST YOU! NOW HAND OVER THAT RETAINER

    The next time you consider

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    The written retainer requirement is well-known to every NY lawyer and I also believe the firm deserves no sympathy — especially in contingency fee matters. In the 9/11 Fund context, there were many lawyers offering their services for free. Those who expected to be paid should have gone out of their way to make sure a Written Retainer Agreement was signed.
    I wish the we were told how many hours Mr. Santucci claims to have worked on the file, since he was contacted only a week before the hearing and apparently did not start working until he received medical records three days before the trial.
    You may be right that a court would have approved a one-third contingency fee agreement, but that’s because court’s have virtually opted out of ever applying reasonableness standards to such agreements outside of class action cases. I contend that such a fee here would have been excessive, and that $35,000 is also too much for at most a few days’ work. Despite your generalizing about whether lawyers add value to a case, we have no idea what Santucci’s presentation added to this case.

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    The written retainer requirement is well-known to every NY lawyer and I also believe the firm deserves no sympathy — especially in contingency fee matters. In the 9/11 Fund context, there were many lawyers offering their services for free. Those who expected to be paid should have gone out of their way to make sure a Written Retainer Agreement was signed.
    I wish the we were told how many hours Mr. Santucci claims to have worked on the file, since he was contacted only a week before the hearing and apparently did not start working until he received medical records three days before the trial.
    You may be right that a court would have approved a one-third contingency fee agreement, but that’s because court’s have virtually opted out of ever applying reasonableness standards to such agreements outside of class action cases. I contend that such a fee here would have been excessive, and that $35,000 is also too much for at most a few days’ work. Despite your generalizing about whether lawyers add value to a case, we have no idea what Santucci’s presentation added to this case.

  • Eugene

    David, how can you claim we have no idea what Santucci’s presentation added to the case? I think it’s quite clear, he tripled the recovery the client got pro se. The lawyer incontrovertibly added value to the client. This is an extremely clear case of unjust enrichment of the client. Had the lawyer been a contractor or auto mechanic, and the recovery had been a house or car, the court would have awarded some equitable restitution.
    Let’s keep in mind, the quantum of compensation for services should never be solely driven by the amount of labor expended. It should also consider the amount of benefit conferred. A balance between the two must be struck, no doubt, but to focus on the former without giving consideration to the latter is against all notion of equity.
    The fact is, Santucci walked away with nothing after having done *some* work, while the client received free representation and a tripling of recovery. How can anyone possibly say that this is an equitable result? Some can see he’s entitled to hourly compensation strictly for the work he did, or others (like me) can say his compensation should correlate to the benefit he conferred, but to say he got what he deserved isn’t fair.

  • Eugene

    David, how can you claim we have no idea what Santucci’s presentation added to the case? I think it’s quite clear, he tripled the recovery the client got pro se. The lawyer incontrovertibly added value to the client. This is an extremely clear case of unjust enrichment of the client. Had the lawyer been a contractor or auto mechanic, and the recovery had been a house or car, the court would have awarded some equitable restitution.
    Let’s keep in mind, the quantum of compensation for services should never be solely driven by the amount of labor expended. It should also consider the amount of benefit conferred. A balance between the two must be struck, no doubt, but to focus on the former without giving consideration to the latter is against all notion of equity.
    The fact is, Santucci walked away with nothing after having done *some* work, while the client received free representation and a tripling of recovery. How can anyone possibly say that this is an equitable result? Some can see he’s entitled to hourly compensation strictly for the work he did, or others (like me) can say his compensation should correlate to the benefit he conferred, but to say he got what he deserved isn’t fair.

  • http://67.225.230.212/~sh1ngl3 Carolyn Elefant

    I understand David’s objection to “cookie-cutter” one third contingency arrangements. But that’s not what Santucci sought here. He asked for 25 percent of the fee – and he only sought to recover the difference between what the client had achieved on his own ($65,000) and what he was awarded after Santucci’s entry to the case ($204,000). Yes, $35,000 may have been high for a week of work. We don’t know how much work was done – and the benefit to the client was substantail – even paying $35,000, he still come out more than $100,000 ahead of where he’d have been had Santucci not handled the appeal.
    Let’s say instead that the attorney put in 10 hours on the case at $400 an hour. Would the client have been willing to pay $4000 at the outset of the case, not knowing what the result would be? I think most clients would not because they are risk averse. It’s much easier to play with someone else’s money.

  • http://67.225.230.212/~sh1ngl3 Carolyn Elefant

    I understand David’s objection to “cookie-cutter” one third contingency arrangements. But that’s not what Santucci sought here. He asked for 25 percent of the fee – and he only sought to recover the difference between what the client had achieved on his own ($65,000) and what he was awarded after Santucci’s entry to the case ($204,000). Yes, $35,000 may have been high for a week of work. We don’t know how much work was done – and the benefit to the client was substantail – even paying $35,000, he still come out more than $100,000 ahead of where he’d have been had Santucci not handled the appeal.
    Let’s say instead that the attorney put in 10 hours on the case at $400 an hour. Would the client have been willing to pay $4000 at the outset of the case, not knowing what the result would be? I think most clients would not because they are risk averse. It’s much easier to play with someone else’s money.

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    Eugene, I can’t go along with your notion of what is “clear” about the lawyer’s contribution to the case. You are assuming that the Review Board would have made no assessment on its own that might have increased the award, and that the claimant did not or could not improve his own presentation (with, for example, medical records and opinions). You’re also assuming that the lawyer made a presentation that maximized the claimant’s final results.
    Carolyn, The lawyer’s “risk” is measured by just how much unpaid work his firm will probably do on a case. Given the timeframe here, and the lawyer’s likely assessment that a large increase was probable, that risk was not very large. So, I stick with my conclusion that 25% sounds excessive.
    In addition, this kind of case seems more like Social Security disability matters, where there is a 25% maximum contingent fee allowed, than the run-of-the-mill overcharging done with the Standard one-third fee.

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    Eugene, I can’t go along with your notion of what is “clear” about the lawyer’s contribution to the case. You are assuming that the Review Board would have made no assessment on its own that might have increased the award, and that the claimant did not or could not improve his own presentation (with, for example, medical records and opinions). You’re also assuming that the lawyer made a presentation that maximized the claimant’s final results.
    Carolyn, The lawyer’s “risk” is measured by just how much unpaid work his firm will probably do on a case. Given the timeframe here, and the lawyer’s likely assessment that a large increase was probable, that risk was not very large. So, I stick with my conclusion that 25% sounds excessive.
    In addition, this kind of case seems more like Social Security disability matters, where there is a 25% maximum contingent fee allowed, than the run-of-the-mill overcharging done with the Standard one-third fee.

  • Eugene

    David,
    I think it’s far more reasonable to conclude that the lawyer added value than that the client was solely or primarily responsible for the tripling of recovery. Neither of us have the facts, so *both* of us must engage in some kind of assumption to base our opinions on. Analogizing to the theory of res ipsa loquitur, we have 1) a recovery of X where the client acted pro se, and 2) a recovery of 3X where a lawyer was present. Are you telling me that the most reasonable assumption to make is that the lawyer’s contribution wasn’t that great?
    Moreover, the lawyer’s compensation should not be based exclusively on the risk he assumed or the work he did. What’s wrong with also awarding the lawyer some portion of the benefit he conferred? Your view of the contingent fee is that it is some form of approximation of the value of the lawyer’s contribution based solely on the labor he expended and the risk he assumed. That, however, is the basis for the hourly fee. The contingent fee contemplates the lawyer’s sharing in some portion of the benefit conferred.
    David, I think you’re real problem is that you’re opposed to the notion of the contingent fee. You wouldn’t be alone, but you’d definitely be in a distinct minority on that issue.

  • Eugene

    David,
    I think it’s far more reasonable to conclude that the lawyer added value than that the client was solely or primarily responsible for the tripling of recovery. Neither of us have the facts, so *both* of us must engage in some kind of assumption to base our opinions on. Analogizing to the theory of res ipsa loquitur, we have 1) a recovery of X where the client acted pro se, and 2) a recovery of 3X where a lawyer was present. Are you telling me that the most reasonable assumption to make is that the lawyer’s contribution wasn’t that great?
    Moreover, the lawyer’s compensation should not be based exclusively on the risk he assumed or the work he did. What’s wrong with also awarding the lawyer some portion of the benefit he conferred? Your view of the contingent fee is that it is some form of approximation of the value of the lawyer’s contribution based solely on the labor he expended and the risk he assumed. That, however, is the basis for the hourly fee. The contingent fee contemplates the lawyer’s sharing in some portion of the benefit conferred.
    David, I think you’re real problem is that you’re opposed to the notion of the contingent fee. You wouldn’t be alone, but you’d definitely be in a distinct minority on that issue.

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    Eugene, You’re right, neither of us knows the facts as to the lawyer’s contribution — just what he did to make a better presentation. My reply was to your unrestrained assertion that it was “clear” that the lawyer tripled the award and therefore the total increase was due to the lawyer’s presence.
    As you probably know, in many kinds of government benefit cases it often happens that the initial stage assessment is extremely low or a rejection, and the true review of the circumstances is at the second stage, if and when the claimant appeals. (For example, my own Social Security disability claims a few years ago, which were totally rejected at the first round.) Before we know the success rates in general at the second level for the Sept. 11 compensation fund — and for people in the claimant’s employment and health situation — we cannot assume that having a talking suit sitting beside the claimant was the magical and sole source of the increase.
    And, please don’t try to excuse the desire to take more from a client, by suggesting that I am simply against all use of the contingency fee. I have often stated that my beef is with excessive contingency fees not with the pricing method itself — and I would never want to take that option away from a properly-informed client (that is, informed of the lawyer’s good faith estimate of the likelihood of winning and collecting, the amount of work the lawyer is likely to do, the possibility of settlement, etc. as set forth in ABA Formal Ethics Opinion 94-389).
    You want a risk-based percentage plus an outcome bonus for the lawyer. Basing the fee on a percentage of the winnings DOES reward the lawyer in accord to the benefit bestowed on the client. Choosing the percentage number to be applied to the award is an attempt to compensate the lawyer for the risk taken (that risk includes the likelihood of winning — which makes the complexity of the case relevant — and of collecting, and the likely amount of work that will be done). [By the way, a fully-informed client should be able to enter into a contingency fee agreement that has a performance bonus for the lawyer, just as the client might instead insist on an agreement that pays a lower percentage on higher damage awards, or sets a maximum.]
    Your notion that “risk + time” is the basis of the hourly fee is simply strange. A tiny part of a lawyer’s hourly fee may be a safety net against uncollected fees, but risk is not an important part of the setting of an hourly fee.
    The ABA’s Formal Ethics Opinion on Contingency Fees (Op. 94-389) made it clear that risk — the likelihood of winning and collecting — is at the core of a reasonable contingency fee (as is a fully-informed client). ATLA has also stated that risk is the proper criterion for setting a contingency fee. In 2003, Public Citizen, a strong advocate of both contingency fees and ATLA, told the Utah Bar’s hearing on the Common Good Early-Offer proposal:

    “It is widely accepted that contingency fees should vary depending on the riskiness and complexity of the individual case; indeed, that is what the ethical rules currently require (even though almost universally honored in the breach).”

    I am not going to stop advocating for fully-informed clients and risk-based contingency fees merely because the personal injury bar likes its little racket (especially the “standard fee” game) and has the power to stymie enforcement of the ethical requirement of reasonable fees. As Ethics Opinion 94-389 states:

    “[A]ny lapse from the applicable requirements by some members of the profession suggests that the profession should redouble its efforts to assure that the ethical obligations associated with entering into a contingent fee arrangement are fully understood and observed.”

    A lawyer’s role is to help a client receive just compensation for injuries. It is the client’s claim and the client’s pain; the lawyer is the client’s servant-agent, helping to achieve compensation. Lawyers look and act greedy when they basically impose a partnership agreement on their client through a high-percentage contingency fee that is not warranted by the risk taken. Demanding a bonus beyond the risk factor enriches the lawyer at the client’s expense and assumes you can tell just what part of the award is lawyer-added value, as opposed to an obviously-deserved compensation to the client for injury.
    When any group of lawyers just happens to consistently read their ethical obligations so as to maximize their own income, I get suspicious. Wouldn’t you, if it were someone else cash cow being gored?

  • http://blogs.law.harvard.edu/ethicalesq David Giacalone

    Eugene, You’re right, neither of us knows the facts as to the lawyer’s contribution — just what he did to make a better presentation. My reply was to your unrestrained assertion that it was “clear” that the lawyer tripled the award and therefore the total increase was due to the lawyer’s presence.
    As you probably know, in many kinds of government benefit cases it often happens that the initial stage assessment is extremely low or a rejection, and the true review of the circumstances is at the second stage, if and when the claimant appeals. (For example, my own Social Security disability claims a few years ago, which were totally rejected at the first round.) Before we know the success rates in general at the second level for the Sept. 11 compensation fund — and for people in the claimant’s employment and health situation — we cannot assume that having a talking suit sitting beside the claimant was the magical and sole source of the increase.
    And, please don’t try to excuse the desire to take more from a client, by suggesting that I am simply against all use of the contingency fee. I have often stated that my beef is with excessive contingency fees not with the pricing method itself — and I would never want to take that option away from a properly-informed client (that is, informed of the lawyer’s good faith estimate of the likelihood of winning and collecting, the amount of work the lawyer is likely to do, the possibility of settlement, etc. as set forth in ABA Formal Ethics Opinion 94-389).
    You want a risk-based percentage plus an outcome bonus for the lawyer. Basing the fee on a percentage of the winnings DOES reward the lawyer in accord to the benefit bestowed on the client. Choosing the percentage number to be applied to the award is an attempt to compensate the lawyer for the risk taken (that risk includes the likelihood of winning — which makes the complexity of the case relevant — and of collecting, and the likely amount of work that will be done). [By the way, a fully-informed client should be able to enter into a contingency fee agreement that has a performance bonus for the lawyer, just as the client might instead insist on an agreement that pays a lower percentage on higher damage awards, or sets a maximum.]
    Your notion that “risk + time” is the basis of the hourly fee is simply strange. A tiny part of a lawyer’s hourly fee may be a safety net against uncollected fees, but risk is not an important part of the setting of an hourly fee.
    The ABA’s Formal Ethics Opinion on Contingency Fees (Op. 94-389) made it clear that risk — the likelihood of winning and collecting — is at the core of a reasonable contingency fee (as is a fully-informed client). ATLA has also stated that risk is the proper criterion for setting a contingency fee. In 2003, Public Citizen, a strong advocate of both contingency fees and ATLA, told the Utah Bar’s hearing on the Common Good Early-Offer proposal:

    “It is widely accepted that contingency fees should vary depending on the riskiness and complexity of the individual case; indeed, that is what the ethical rules currently require (even though almost universally honored in the breach).”

    I am not going to stop advocating for fully-informed clients and risk-based contingency fees merely because the personal injury bar likes its little racket (especially the “standard fee” game) and has the power to stymie enforcement of the ethical requirement of reasonable fees. As Ethics Opinion 94-389 states:

    “[A]ny lapse from the applicable requirements by some members of the profession suggests that the profession should redouble its efforts to assure that the ethical obligations associated with entering into a contingent fee arrangement are fully understood and observed.”

    A lawyer’s role is to help a client receive just compensation for injuries. It is the client’s claim and the client’s pain; the lawyer is the client’s servant-agent, helping to achieve compensation. Lawyers look and act greedy when they basically impose a partnership agreement on their client through a high-percentage contingency fee that is not warranted by the risk taken. Demanding a bonus beyond the risk factor enriches the lawyer at the client’s expense and assumes you can tell just what part of the award is lawyer-added value, as opposed to an obviously-deserved compensation to the client for injury.
    When any group of lawyers just happens to consistently read their ethical obligations so as to maximize their own income, I get suspicious. Wouldn’t you, if it were someone else cash cow being gored?

  • Eugene

    David,
    I erred in stating that risk is a part of hourly fee, it is a part of contingency fee, but I typed quickly and couldn’t edit it after submission.
    I understand your position better based on that well-articulated and well-reasoned last post of yours. I’m going to think further on your points, as you make good ones.
    I don’t think we’re that far apart on the issues involved, but perhaps in terms of our emphases and stances. You seem to come from the perspective that lawyers are more often than not knowingly committing ethical violations. I come from the perspective that oftentimes, lawyers are professional and deliver a great deal of value that should not go unrecognized or unrewarded. Maybe it’s a half-full, half-empty kind of difference.
    In my decade of practicing law, I’ve seen and worked with plenty of lawyers whom I admired and who were ethical, professional and competent. That colors my views. Maybe your experiences have similarly colored your views.

  • Eugene

    David,
    I erred in stating that risk is a part of hourly fee, it is a part of contingency fee, but I typed quickly and couldn’t edit it after submission.
    I understand your position better based on that well-articulated and well-reasoned last post of yours. I’m going to think further on your points, as you make good ones.
    I don’t think we’re that far apart on the issues involved, but perhaps in terms of our emphases and stances. You seem to come from the perspective that lawyers are more often than not knowingly committing ethical violations. I come from the perspective that oftentimes, lawyers are professional and deliver a great deal of value that should not go unrecognized or unrewarded. Maybe it’s a half-full, half-empty kind of difference.
    In my decade of practicing law, I’ve seen and worked with plenty of lawyers whom I admired and who were ethical, professional and competent. That colors my views. Maybe your experiences have similarly colored your views.

  • Anonymous

    David, I would add that you continue to base the contingency fee on risk incurred and work done, but persist in excluding benefit bestowed as part of the formula. Again, I don’t see the ethical violation or risk inherent in basing part of the lawyer’s fee on the benefit bestowed. It’s a timeworn concept in equity (restitution), why exclude lawyers?

  • Anonymous

    David, I would add that you continue to base the contingency fee on risk incurred and work done, but persist in excluding benefit bestowed as part of the formula. Again, I don’t see the ethical violation or risk inherent in basing part of the lawyer’s fee on the benefit bestowed. It’s a timeworn concept in equity (restitution), why exclude lawyers?

  • Eugene

    Well David, I’ve really enjoyed this little repartee of ours, in this forum kindly provided by Carolyn.
    I’ve thought about your position further. I’ve got a few additional points to make.
    One: The question is, which rebuttable presumption is most appropriate based on the limited facts known (assumptions and presumptions aren’t necessarily bad things, we often have to deal with limited facts to reach workable conclusions – just so long as all realize the conclusions can not be definitive for the particular fact pattern).
    Given there has been a 3x increase in award, and the only the variable that may explain the difference is the presence of the lawyer, I think there’s strong grounds for a rebuttable presumption that the lawyer’s contributions substantially account for the improved result.
    You seem to suggest, in contrast, that the appropriate rebuttable presumption to apply is that the lawyer’s added value should be estimated based on the limited time spent working on the case (1 week or so), and concomitantly, little risk incurred. Hence, the lawyer’s fee should be appropriately limited, perhaps to 20-25% of the recovery, as I believe you’ve mentioned.
    This goes back to my point that there’s nothing wrong with a lawyer’s sharing in a portion of the BENEFIT CONFERRED, which need not be directly related to the labor he expended and the risk he incurred. You seem to argue that only labor and risk should be considered. I don’t understand the ethical risks which arise based on giving the lawyer a portion of the benefit conferred.
    You also cite the social security proceeding you personally experienced as evidence supporting your contention that other factors independent of the lawyer’s efforts could be rebuttably presumed to account for the award increase. While that may be, government agencies with different missions can have strikingly different procedures. The SS Admin. and the WTC Comm. are just so utterly different (their only commonality is that they both happen to be government instrumentalities, dispensing benefits) I really don’t find your Social Security experience in the least probative.
    I don’t think our positions are that far apart, as I mentioned before. However, I still think the evidence more strongly supports a rebuttable presumption that the lawyer did help.
    Two: I notice you strenuously cite to ABA Ethics Opinions in your posts. It’s impressive that you go to such great lengths to make your points, and this no doubt enhances the force and credibility of your arguments. However, I question your logical consistency.
    I have already pointed out that the ABA Model Rules of Professional Conduct do not contain the ethical rigor you seem to espouse. You have dismissed the ABA Rules as a workable ethical guideline and stated that lawyers should adhere to a higher ethical standard. If this is the case, I’m unsure why you cite so extensively to ABA Ethics Opinions to support your arguments.
    In any case, since you seem to give at least some measure of credence to bar committees ethical guidelines, I’ll point out that, here in California, the Rules of Professional Conduct require only that lawyers’ fees not be “unconscionable”. This is more liberal than the ABA Model Rules, which requires that lawyers’ fees be “reasonable”. There is certanily some range of fees that falls between “reasonable” and “not unconscionable”. And I truly don’t believe that fees granting the lawyer some portion of the benefit conferred, even regardless of the labor expended or risk incurred, violates either ethical requirement, so long as the fee percentage itself is not excessive under the reasonableness or unconscionability standards.
    In the end, I think there is no one ethical construct that everyone agrees on. The bar committee rules and opinions provide a solid foundation (in my view), but there are plenty of value judgments left for the lawyer to make, even when bar rules and opinions speak to the particular ethical question at hand. I think each lawyer’s individual views on ethics begins with a simple question: what is their view of the basic nature of lawyers (and humankind)? Good or bad?
    I choose to think most lawyers are good people.

  • Eugene

    Well David, I’ve really enjoyed this little repartee of ours, in this forum kindly provided by Carolyn.
    I’ve thought about your position further. I’ve got a few additional points to make.
    One: The question is, which rebuttable presumption is most appropriate based on the limited facts known (assumptions and presumptions aren’t necessarily bad things, we often have to deal with limited facts to reach workable conclusions – just so long as all realize the conclusions can not be definitive for the particular fact pattern).
    Given there has been a 3x increase in award, and the only the variable that may explain the difference is the presence of the lawyer, I think there’s strong grounds for a rebuttable presumption that the lawyer’s contributions substantially account for the improved result.
    You seem to suggest, in contrast, that the appropriate rebuttable presumption to apply is that the lawyer’s added value should be estimated based on the limited time spent working on the case (1 week or so), and concomitantly, little risk incurred. Hence, the lawyer’s fee should be appropriately limited, perhaps to 20-25% of the recovery, as I believe you’ve mentioned.
    This goes back to my point that there’s nothing wrong with a lawyer’s sharing in a portion of the BENEFIT CONFERRED, which need not be directly related to the labor he expended and the risk he incurred. You seem to argue that only labor and risk should be considered. I don’t understand the ethical risks which arise based on giving the lawyer a portion of the benefit conferred.
    You also cite the social security proceeding you personally experienced as evidence supporting your contention that other factors independent of the lawyer’s efforts could be rebuttably presumed to account for the award increase. While that may be, government agencies with different missions can have strikingly different procedures. The SS Admin. and the WTC Comm. are just so utterly different (their only commonality is that they both happen to be government instrumentalities, dispensing benefits) I really don’t find your Social Security experience in the least probative.
    I don’t think our positions are that far apart, as I mentioned before. However, I still think the evidence more strongly supports a rebuttable presumption that the lawyer did help.
    Two: I notice you strenuously cite to ABA Ethics Opinions in your posts. It’s impressive that you go to such great lengths to make your points, and this no doubt enhances the force and credibility of your arguments. However, I question your logical consistency.
    I have already pointed out that the ABA Model Rules of Professional Conduct do not contain the ethical rigor you seem to espouse. You have dismissed the ABA Rules as a workable ethical guideline and stated that lawyers should adhere to a higher ethical standard. If this is the case, I’m unsure why you cite so extensively to ABA Ethics Opinions to support your arguments.
    In any case, since you seem to give at least some measure of credence to bar committees ethical guidelines, I’ll point out that, here in California, the Rules of Professional Conduct require only that lawyers’ fees not be “unconscionable”. This is more liberal than the ABA Model Rules, which requires that lawyers’ fees be “reasonable”. There is certanily some range of fees that falls between “reasonable” and “not unconscionable”. And I truly don’t believe that fees granting the lawyer some portion of the benefit conferred, even regardless of the labor expended or risk incurred, violates either ethical requirement, so long as the fee percentage itself is not excessive under the reasonableness or unconscionability standards.
    In the end, I think there is no one ethical construct that everyone agrees on. The bar committee rules and opinions provide a solid foundation (in my view), but there are plenty of value judgments left for the lawyer to make, even when bar rules and opinions speak to the particular ethical question at hand. I think each lawyer’s individual views on ethics begins with a simple question: what is their view of the basic nature of lawyers (and humankind)? Good or bad?
    I choose to think most lawyers are good people.

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