Retainers and legal fees: A well-written contingency retainer

The one great principle of the English law is, to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme, and not the monstrous maze the laity are apt to think it. Let them but once clearly perceive that its grand principle is to make business for itself at their expense, and surely they will cease to grumble. — Charles Dickens, Bleak House.

Here, in the common form of a letter is a basic contingency retainer agreement I’ve adapted for a personal injury case such as mine. It’s the retainer Foot Lawyers, PC should have produced for my signature.

Starts out with a date, an address, blah blah and a “Dear — “…but you’re smart, knew that.

This letter will confirm the terms under which Exemplary Law Firm, LLP has agreed to represent you.

You have agreed to retain Exemplary Law Firm to investigate and, if we find your claims to be actionable, prosecute a suit for personal injury and related causes of action, in pursuit of which claims we intend to file a lawsuit against [any agency or defendant whose name is known], appropriate parties, agencies, and others, as their identities become known.

[Unlike the form retainer, this one does not presume the inevitability of a lawsuit: it promises only to investigate the matter; it doesn’t assure the client that there will be a lawsuit. But the form retainer I signed states that I’ve retained Foot Lawyers to “prosecute or adjust a claim for damages…” even though they hadn’t yet investigated whether I had a claim. From both a lawyer’s and a client’s POV, this is a sensible phrase. No assumptions, no promises; no false expectations.]

You hereby give Exemplary Law Firm the exclusive right to take all legal steps to enforce said claims and hereby further agree not to settle this action in any manner without our written consent.

[The above paragraph—which I’ve always overlooked—has some depth, I now realize: it doesn’t warn a client so much as it protects him from being personally pursued by his antagonist. Such a side deal would be iffy and undoubtedly unfavorable as well as unpleasant for the plaintiff-client. We hire lawyers to negotiate and litigate because they really do know what they’re doing. And they are our buffers from the defendants of this world. So this paragraph gives the plaintiff-client all the ammunition she needs to say to her defendant, as I did to mine,”I talk only to my lawyers. Big plus to suing you: I don’t have to talk to you at all.”]

In return for these services, you have agreed to pay us, as a contingent fee, out of the net proceeds of any recovery received through settlement, judgment, or otherwise, one third (33-1/3 percent).  “Gross proceeds” include all monies recovered from the defendants, including any recovery of our attorneys’ fees as a result of a fee application to the Court. [Certain lawsuits permit lawyers to ask the Court for additional fees from the losing party. I think this happens when a long, difficult lawsuit settles and the one-third contingency would not represent adequate compensation, given the amount of work the lawyers put in. In such cases, the lawyers have to keep and provide detailed time sheets in anticipation of a fee application to the court. I’m chuckling now as I remember some crazy ex post facto work compiling time sheets, which some lawyers—brilliant lawyers—just hadn’t kept. (We didn’t make anything up; we just had to backtrack through on-line and off-line calendars, phone bills, piles of file folders, masses of documents, etc. Took days.) “My” guys were focused on actual brilliant lawyering, instead of racking up billable hours. As this paragraph states, any such fees are also divided 2/3 to the client, 1/3 to the lawyer. And take a look at Former Sen. Dorgan: $223M Legal Fee Request is ‘Shameful’ – The BLT: The Blog of Legal Times. And this, an actual fee petition in a recent federal case, cobell_fees_pdf.pdf application/pdf Object. Although I’ll certainly understand if you don’t want to read it.] “Net proceeds” means the proceeds received after deduction of the reasonable and necessary expenses of investigation and of the litigation.

In connection with our services in this matter, we will be entitled to reimbursement from you for all normal expenses including, without limitation, expenses for:

photocopying and reproduction, messengers, long-distance telephone, telex and telecopier charges, travel expenses, word processing, special secretarial services, charges for reporters and transcripts of court proceedings, investigators, experts, witness fees, court costs, etc., as may be appropriate for this matter.

Although we will advance expenses, you understand that the law requires that you are ultimately responsible for these costs. [Doesn’t sound as if it’ll amount to much, right? I mean, “telecopying?” And do they still make telexes? Gee, I hope my ex-law firm has updated this paragraph. Although since I’m not there to do it….Next post I’ll detail what this all can add up to.]

This agreement cannot be amended by either of us except in writing.

Finally, we agree that if there is any dispute about this agreement, it will be resolved through arbitration by a single arbitrator to be conducted in New York City under the rules of the American Arbitration Association. [AAA – Arbitration, Mediation and other forms of Alternative Dispute Resolution (ADR).] The arbitrator’s award in such a case may be entered as judgment in the Supreme Court, New York County, to whose jurisdiction we agree to submit for the enforcement of such an award.

If  the foregoing accurately states our agreement, please confirm that fact by signing a copy of this letter in the lower left-hand corner and returning it to us in the enclosed, self-address, stamped envelope. We look forward to working with you. [Doesn’t presume the client is so dumb she needs to have an “x” marking the spot where she is to sign. The only presumption is that the client can find the lower left corner of the letter, where her name is typed. I could do that.]

Yours truly,

EXEMPLARY LAW FIRM, PPC

By: Basic Valentine, Esq..

ABOVE IS AGREED TO:

You, The Eager Plaintiff            Date

Next: A well-written retainer letter: costs and expenses.

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