Reviewing a document need advise

ruttrowg

New Member
Jurisdiction
Colorado
A law firm wants me to sign a document for representation. Header says "Contingent Fee Agreement"

Not a lawyer, but this paragraph implies to me I could be liable for alot of money.

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Is it reasonable to request to have this omitted or revised?
 
Is it reasonable to request to have this omitted or revised?

In order to know the effect of that paragraph you need to read the entire agreement. There may be other parts of the agreement that impact or limit the costs you may incur. You won't get the attorney to eliminate a provision for costs, since costs are on the client to pay. But you may be able to get it revised to a lower amount that needs your approval before it is paid. I don't know what kind of case you have, but $100,000 in costs is a lot. Most cases aren't going have anything close to that in costs. And asking for that as a cap before you are asked for permission to incur it is rather uncommon. I wouldn't go for that unless there is something unusual about the case that would justify it. In the fee agreements my firm uses the fee provision is quite different, and does not include blanket authority to pay anything close to $100,000 in fees before getting client approval.
 
Not a lawyer, but this paragraph implies to me I could be liable for alot of money.

Depends on your definition of "alot [sic] of money," but I agree that this isn't merely implied.

What's not clear (either because we only have the paragraph out of context or because the agreement isn't clear) is whether this liability exists independently of any recovery in the case (i.e., whether you'll be liable for costs even if you don't receive a settlement or judgment). That's something you should clarify with the attorney if it's not clear from reading the entire document.

Is it reasonable to request to have this omitted or revised?

Depends on the specifics of the agreement as a whole and the relevant facts and circumstances relating to the representation.

$100,000 in costs is a lot. Most cases aren't going have anything close to that in costs.

Agree.
 
Is it normal to put that in a "no fee unless we collect" document?

"That" meaning the blurb you copied into your original post?

If so, yes. I've never seen a contingent fee agreement that didn't have a paragraph discussing the reimbursement of costs advanced by the lawyer.

It is important that you discuss with any lawyer you're considering retaining on a contingent fee basis the extent to which the lawyer believes costs will be incurred. Basic costs are pretty low. I don't know how much filing fees are in Colorado, but I'm accustomed to $400-500. It should cost less than $100 per defendant to serve the complaint (unless you run into problems). Depositions should cost between $500-2,000 each (assuming no more than one day each). An expert witness would likely require a $5-10k refundable retainer. Any costs advanced by the lawyer get reimbursed off the top of your recovery. If you recover $100k and the lawyer has $10k in reimbursable costs and is entitled to a 1/3 contingent fee, then the lawyer gets the $10k for costs and $33,333.33 as the contingent fee, leaving you with $56,666.67 (from which, if this is a personal injury case, you'll have to pay your medical bills). Again, discuss this with the lawyer up front so there are no surprises at the end. Then make sure the written agreement reflects what was discussed.
 
Is it normal to put that in a "no fee unless we collect" document?

Yes. In Colorado, as in pretty much every other state, a contingent fee agreement will have a provision for the client to pay costs. The fee is what the lawyer is paid for his/her work on the case. In a contingent fee agreement, if there is no money collected for the client at the end of the case the lawyer gets nothing for his/her fee. But the client still pays the out of pocket costs. This is important for prospective clients to understand. Always read the fee agreement carefully and ask questions about any part that you don't understand or have concerns about before you sign.
 
In a contingent fee agreement, if there is no money collected for the client at the end of the case the lawyer gets nothing for his/her fee. But the client still pays the out of pocket costs.

That's not always the case. There are firms that will front costs and only be reimbursed if there's a recovery. Of course, those firms typically only take cases that are obvious winners (often in situations where the recovery would be the same with or without counsel).
 
That's not always the case. There are firms that will front costs and only be reimbursed if there's a recovery. Of course, those firms typically only take cases that are obvious winners (often in situations where the recovery would be the same with or without counsel).

this is true and usually it is a percentage fee, that is one crazy contract I would steer clear of.
 
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