Several years ago, a fellow Central New York personal injury lawyer secured a famously large settlement on a personal injury case. At a party a few days later, someone took issue with his fee. “Your 1/3 fee on that big settlement is not fair”. My quick-witted friend replied, “you’re right — it’s not fair. I did ALL the work, I took ALL the risks, but my client gets 2/3 of the money – NOT FAIR!”.
He was just kidding, of course. But in Spanish there is a saying: “From every joke, some truth does poke” (de broma en broma la verdad se asoma). The point of the joke is that, yes, the contingency fee IS fair! Actually, not only is it fair, it is the only system that makes “justice for all” possible. That’s because most people could never afford charge-by-the-hour legal fees. But even if you are poor, if you have a legitimate claim, you can find a lawyer to take the case on a contingency fee basis.
Notice how I said a legitimate claim. No lawyer in his right mind would willingly take on a frivolous case, one that is likely to be tossed out of court by a judge or jury, on a contingency fee. If he does, he will work long and hard for nothing. How often can a lawyer shoot himself in the head like that? Once is quite enough for most. It’s sure not habit forming. If an obstinate lawyer makes a habit of it, he will soon run out of money, have to close shop, and start serving up fries and burgers instead of justice.
So the contingency fee system screens out frivolous lawsuits and fosters “justice for all”. Any other benefits? Yes! The contingency fee system aligns the client’s and the lawyer’s interests. It puts them in the same boat. The lawyer wins 1/3 of whatever he wins for the client, so he is uniquely inspired to maximize his client’s recovery, and thus his own fee.
Not so on an hourly-fee billing system. For example, say I am representing an injured guy on an hourly fee basis. He has to pay me $300 per hour. I can charge him this same amount win or lose. Let’s say the defendant offers a settlement that seems fair. But if I settle, I won’t be able to continue billing the client for the case. Sure, my ethical responsibility is to do what’s best for the client, but what’s best for the client is not best for me. Who knows whether this self-interest is coloring my judgment of whether the settlement is fair. The problem is that the client’s and my interests are not aligned.
In sum, the contingency fee system in a personal injury case has three main benefits: (1) it makes “justice for all” possible; (2) it weeds out frivolous claims; and (3) it aligns the client’s and the attorney’s interests.
The contingency fee system is uniquely American. And it’s the greatest invention our American legal justice system has devised. Now salute the flag . . . and keep safe! And if your efforts to keep safe fail, don’t hesitate to pick up the phone and call me about — you guessed it — my representing you on a contingency fee basis!
Email me at: firstname.lastname@example.org I’d love to hear from you!
Michael G. Bersani, Esq.
michaels-smolak.com Central and Syracuse NY Personal Injury Lawyers
Michaels & Smolak, P.C.