How do you determine the appropriate amount of a settlement that an attorney is entitled to?
Question Details:
What is the percentage an attorney takes from the settlement from a wrongful termination, age discrimination, sexual harassment case? Is it typically 40%? On contingency.
No two cases are alike. A lawyer will consider many factors in arriving at a fair fee. That having been said, the NV Rule of Professional Conduct 1.5 defines the factors to be considered in determining the reasonableness of alawyer’s fees:
1. the time and labor involved, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
2. the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
3. the fee customarily charged in the locality for similar legal services;
4. the dollar amount involved and the results obtained;
5. the time limitations imposed by the client or by the circumstances;
6. the nature and length of the professional relationship with the client;
7. the experience, reputation and ability of the lawyer or lawyers performing the services; and
8. whether the fee is fixed or contingent.
Additionally, in NV, a contingent fee agreement must be in writing and signed by the client. Further, the contingent fee agreement must state the method by which the fee is to be determined, including the percentage of the recovery and whether expenses are to be deducted before or after the contingent fee is calculated, and whether the client is liable for expenses, regardless of the outcome. Ask your lawyer to explain what expenses will be charged and when the client costs are to be paid. Obtaining a written fee agreement in advance is in the best interests of the client, so that there will be a written record in the event that there is a dispute later about the lawyer/client relationship.
Very often, contingency fees are on a sliding scale--the larger the recovery, the less the attorney receives as a percent (though the more in total or absolute dollars. Also, contingency fees could be structured to reflect how much work went on--e.g. if the case goes to trial, a larger percentage is taken than if it is settled at the outset.
There is therefore no hard and fast answer. A good resource for you would be your state bar assocation--contact them and tell them you have a question about the fees your attorney is charging you. You may be able to share the details of the fee arrangment with them to receive guidance. I will say that I have seen cases for which 40% fees are reasonable.
