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China Contingent Lawyer Fee in Personal Injury Case

I'm going to talk about 'contingency' cases in general; from the perspective of a solo practitioner. If you follow my rules it will save you a lot of time, effort and heartache. Which is not to say you will avoid those things entirely, stuff happens, but it will minimize it.

I've done personal injury contingency cases, I've done Will contest contingency cases, I've done collection contingency cases and I've done contract contingency cases.  So I got some experience in the area. And I've learned some things over the years; I won't say I'm an expert but I have made some mistakes and learned from them, and done some things right and learned from them. Let me preface this by emphasizing that I am talking solo practitioners here;   Some law firms don't follow these rules and still manage to make money; but they're typically "mill" type firms; high volume, a lot of staff that does the routine stuff (think some collections firms) at relatively low cost; I'm talking about you, and maybe one person, doing this stuff; you need to evaluate the cases on a much sharper basis than some firm with 50  staff that does most of the work. 

First, very, very important; if you're taking a contingency case, you HAVE to make sure that there is at least a potential source of payment.  I don't care what the  facts are, you can have clear liability, your client can be a saint, the other side the devil, if there's no source of payment apparent, don't take the case.  It simply isn't worth it. And you need to be realistic about the source of payment, not "maybe defendant will hit the lottery or inherit something" but either Insurance (which is ideal) OR *non exempt* assets (Florida is notorious for exempting all sorts of assets; TBE property,  homestead,  retirement funds, most wages; which is why OJ Simpson moved here and was able to live quite well even after the Goldmans got a judgment against him) or a pot of money you can fight over.   You need to be realistic about this;  you need to do your homework ahead of time, even if you have to have client sign a contract that doesn't commit you to representing them but allow you to contact insurance company and find out policy limits, if it's PI case, for instance.   

How this works out in practice; if it's PI case, see if there's insurance, AND insurance in an amount sufficient to make it worth your while. If all defendant is carrying is $10,000 in bodily injury, and  you're limited to one third of total recovery for your attorneys fee, I’m sorry, that just isn't worth opening a file on. Likewise, most small claims/inferior jurisdiction court type cases; contract dispute over a $6,000 bill?  You going to do that on contingency? 

Collections case?  I'm doing asset search FIRST; and unless there's some good non exempt assets, I'm not taking it. I don't care that you got six figure judgment; if debtor is driving 1991 Ford, works for minimum wage, or is getting social security, and lives in a house that they own, everything is exempt. There's no money to recover. I'm not wasting my time on this.

Which brings me to my second point; you need to make sure that there is enough at issue to make it worth your while; not only that they can cover the damages, but that the damages are sufficient for you to take the time AND the risk to bring the case.  Collections?  I’m not going to take a few hundred or couple of thousand dollar collections case and take a third cut of it. I'm simply not. You want to send me a six figure collections case, we'll talk about it, but much less than that, frankly, I’m not going to be interested.  It just doesn't make sense.  Likewise, a will contest over a $5,000 bank account, a 1981 mobile home and a lot? Come on, even if  you win, what am I goinig to get out of it?  Now,  you're talking $400,000 or $500,000 estate, I'm interested. 

Contract dispute?  Depending on the strength of the case, maybe $50K or so; but it's going to have to be pretty strong case for me to take it for that.

Point is guy's, you going to do this, you want to make reasonably big money off of these cases; they take time, they take energy, they are stressful because you aren't getting paid; don't do this for peanuts. Some people will simply go unserved because their cases aren't economically viable; I do feel bad for them, but I'd feel worse for myself if I spent took the case and spent dozens of hours on it and made a 3 figure or low 4 figure fee on it.  Remember, you're in business; you need to make money and enough money on these things to justify taking the time and the risk.

Facts; Make sure the facts are in your favor and that you have reasonable chance of winning.    If it's less than 50/50, don't take it;' and frankly, even if it were 50/50 I'd be reluctant; it'd have to be high value case for me to take it.  Lower value, the case better be more like a slam dunk.  IF at all possible, try to figure on a Plan B, even if you don't get the whole thing, where you can get something (Multiple defendants, maybe; or in a will contest case; I thought will cutting wife out of estate entirely was invalid; that's factual question;  if I won on that point I would recover percentage of entire estate; however it was CLEAR under Florida law, that EVEN IF the will was valid, by cutting the wife out of the will, to the extent that the Homestead passed away from the wife, it failed; even if will admitted, Wife would still get homestead; this is matter of Black Letter Law in this state and even if judge ruled against me it'd be reversed on appeal; so even if I lost on main case I'd still get significant fee from recovering Homested for wife)

You need to  look at facts clear eyed; don't just take clients word for it, do a bit of investigation if needed. 

Costs;  If at all possible get client to pay costs; ideally, pay some of them up front.  Sometimes you can't do this; particularly for 'individual' type cases, PI, will contests; but if it's Business organization, get them to front costs in, say, a contract case.  This does two things; obviously, it reduces your out of pocket expenses; it ALSO makes your client sit down and evaluate the case on a rational basis; do they want to throw additional money, even if it's a few hundred dollars, at this thing?  IF they're not willing to advance the filing fee, I'm not willing to spend my time on it; it's a dog. Woof Woof. 

Don't be afraid to settle.  I'd much rather settle most cases and get a 'fair' settlement than roll the dice and take it to trial; I got my time and effort into it, if I can make a reasonable fee and get client a reasonable settlement,  I'd rather do that than risk trial.  You can lose at trials; you can get less than you expect, you can get more, but  you don't know. Encourage  your client to settle. And, to encourage them to do so, don't be afraid to drop your fee; look; I'd rather have 25% of reasonable settlement than 33% of nothing if it goes to trial and jury finds no liability. In fact, IF I can settle it early enough, I'll drop my fee even more.  Can't discuss specific fees here, but one case I had almost right after I opened, sent to me by my then landlord, was contract dispute; complicated case involving a loan guarantee by him, questions of usury,   Long story short was we thought we were owed about $75,000, maybe $100,000; but it was going to depend on an accounting; and they had defenses, particularly usury statute. They made offer of about $52,000 cash.  This was after me sending two letters; no suit filed, I'd drafted complaint and transmitted it to lawyer, but had'n't filed, had done no discovery, etc. Was I willing to cut my fee for this?  Heck yes. For two letters I could STILL make decent 5 figure fee.  Sold it to clients; Listen, if you settle for this, I'll cut me fee to that, you'll walk away with this much; and you get paid within a couple of weeks. If you take it to trial,  it's going to take months, maybe years, there's no guarantee what you'll get or even that you win; he's got halfway decent claim that you were violating usury laws; and there's no guarantee that the guy will actually have the money a couple of years from now; he's flush with cash now, and can pony it up.  And if we take it to trial, I'm taking my full third percentage; so even if the recovery is more than what the settlement offer is, whatever they receive is likely to be somewhat offset by my increased fee.  Client took it; client was THRILLED to take it; this had been ongoing dispute for a couple of years, his lawyer writes two letters and gets him tens of thousands of dollars?  He thinks I’m greatest lawyer in the world and is worth every penny of my fee. 

Which leads me to my next point; this is about the money. In the case above, the client is businessman, he looks at it from business viewpoint and makes rational business decision.  YOU need to look at this from business viewpoint; it's all about the Benjamins.  AND you need to make sure that CLIENT looks at this from business viewpoint; this isn't about Vindication, about Right and Wrong, this is about getting the client, and you, the money.  If client gets squirrelly and starts talking about Justice and Truth and The American Way and Fairness, you need to either get the client to look at it from business, money, perspective, or dump the client and get rid of the case. Which is why I have language in my contract to the effect of

If client refuses to accept and approve a settlement of the action recommended to him [her] by lawyer in writing, which has been offered to client in writing by the other party, the lawyer's fee shall in no event be less than one-half of the fee he [she] would have received had the settlement been made.

Withdrawal of lawyer. Lawyer may withdraw from representation of the client in this action at any time after reasonable notice to client. In that event lawyer will not be entitled to receive any of the fees specified in paragraph 3 above or reimbursement of any expenses as provided in paragraph 4 above.

If I say "you ought to take the deal" and client refuses I can quit; and get half of my fee it it winds up that he hires new lawyer and settles or takes it to trial.

Look, you'll have clients say to you (and NOT just in contingency cases) "all you (or "all lawyers) care about is the money".  Your reply should be, Yes, that's why I'm in this business, to make money,  I need the money to pay my bills, feed my family, pay  the mortgage, etc. If I can't make money on this,  there's lots easier jobs out there that pay less; the ONLY reason for me to do this is to make lots of money".  Some client will get ticked and not hire you but many, or most will realize that this is about the money.

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I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

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China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.