QUESTION:

I gave a $1,500 retainer that I thought applied to the contingency fee which is the injury portion of the case. However, my attorney is charging 33% to my car repair recovery. Is this the norm? “LEGAL FEES, COSTS AND BILLING PRACTICES: You hereby grant us a contingent fee on your claims equal to thirty-three percent (33%) of any net recovery you may obtain. “Net recovery” means (a) the amount of any settlement, judgment, arbitration award, or other recovery received; (b) minus any costs advanced on your behalf pursuant to paragraph 2 above. We will credit the $1,500 retainer against any such contingent-fee up to and including the full amount of the retainer.

ANSWER:

There are a variety of contingency fee possibilities. The type used in a given case depends in part on counsel’s subjective preferences, and in part on the nature of work required, the severity of the injuries and claimant’s financial condition. The only limitation, as a general rule, is “conscionability” [1:144]. Typically, plaintiff’s attorney fee agreement calls for a graduated contingency fee—e.g., 33 1/3% if the case settles before suit is filed, 40% if the case settles after suit is filed, etc. Thus, aside from reducing claimant’s out-of-pocket costs, a prelawsuit settlement is likely to maximize claimant’s net recovery [4:42.12]. The preferred method is to deduct the costs advanced from the client’s gross recovery; and then apply the contingent fee percentage to the net. Applying contingent percentage to net recovery is “standard and accepted method for calculating a lawyer’s contingent fee” [1:185]. It would be best to personally seek assistance from lawyer in order to assist you with the proper apportionment of the above-mentioned fee.