Thank you for the info!

Every lawyer does a risk assessment on every p/i case she or he accepts — and it’s always a gamble. The AZ rule helps make the risk assessment more in the open and more likely to be fair to the client.

It seems clear, as Sec. 3 of the Commentary to Rule 1.5 states, that the ethics focus will be on the perceived risk at the “outset of the representation.” But, the ability to review the actual fee and to compare it to the actual effort and risk, factoring in the novelty and the skill needed to achieve the result, seems fair to both lawyer and client, and fits in with the century-old Factor #1 of Rule 1.5 (a). Deciding whether the final fee was reasonable would take all that into account, giving the original good faith risk assessment a lot of weight.

Thinking of the situation as you “being a victim of your own success” is a rather lawyer-oriented way to look at the fairness of the fee and the question of who gets to keep the damages (which are, after all, supposed to compensate the client for the client’s injuries). If you thought a case would take 3000 hours and it actually took 300, you have saved yourself a lot of work (and received the money much sooner), while opening up the ability to work on other matters and make other income. Since you had originally thought the case was highly risky, you should not have been already assuming the big paycheck. In reality, you have “earned” less, if the verb “earn” has any normative content to it, and if your fiduciary obligation not to unfairly enrich yourself at your client’s expense has any real meaning.

Surely, the lawyer will be better able than the client to assess the risk up front. And, “risk” means just that — exposing yourself to a chance of loss, with uncertainty as to the outcome. Those lawyers who are risk averse should perhaps stick to hourly rates. Those who only think about the giant lottery jackpot that will result from the contingency fee (and not the fairness of the final split of the recovered damages with their client) perhaps need to brush up on their ethical and fiduciary duties not to overreach.

Thanks for giving this posting a mention and a link. I want to point out that the obligation to discuss/offer alternative fee arrangements when a contingency fee might not be in a client’s interests is NOT NEW — that has been part of the Commentary to Rule 1.5 ever since the Model Rules were first promulgated. It has just been ignored. And, of course, lawyers who say that contingency fees are always in their client’s best interests because there is no fee if there are no damages recovered are fooling themselves or trying to make fools of their clients.

David: Thanks for the tip on the AZ rule, I linked to it at myshingle.com below
http://myshingle.com/article.pl?sid=03/07/01/0238230&mode=thread. Generally, I have no objection to requiring that clients be advised of alternative fee arrangements in contingency cases. The risk assessment makes me a little more hesitant because risk can be subjective and also varies depending on whether there’s a forward looking or hindsight analysis (for instance, I might take a longshot case and come up with a novel legal theorgy that lets me resolve the case in 3 months. Another lawyer might take a case w/slam dunk liability but a defendant who won’t settle and a client who turns out to be unlikeable, so the case drags on for years. Both cases are risky, but at different points - mine was risky when the client walked in the door; the slam dunk is risky as time passes. I’d be concerned that the AZ rule might require a risk reduction for my case due to quick settlement thereby making me a victim of my own success.