Because the majority of cases settle before trial, many law firms maintain a successful contingency fee practice without ever going to trial. In those instances where trial is necessary, these attorneys simply refer the case out to a law firm that has trial experience. When this happens, the original attorney splits his or her fee with the second attorney.
Unfortunately, hiring a law firm that can’t go to trial may mean that you don’t obtain the full value for your claim. Attorneys are often given mediocre offers on cases that should be valued higher. These attorneys may be hesitant to refer the case out to a trial lawyer for fear of having to split their fee. Unless the trial award is a significant improvement, it is unlikely that the original attorney will make more money after splitting his or her fee.
If you hire a trial law firm in the first place, you avoid the possibility that your attorney may settle for less than full value The real issue should not be how much the attorney will make, but rather how much you as the client are going to make.
That leads to the next important consideration, the problem of attorneys who file lawsuits too early…
Every client wants an attorney who aggressively protects the client’s interests. But some attorneys exploit this fact. At some point, perhaps even at the sign-up meeting, your attorney may display great horror at the mistreatment and/or injury you have experienced. You may react favorably to this response—we all enjoy sympathetic listeners when we have been unjustly treated.
Your attorney may then say that their firm has extensive trial experience—just what you’re looking for, right? Then, Mr. Aggressive goes on to tell you that he means business, and that he won’t stand for the mistreatment you have suffered. He will assure you that the wrongdoers will be brought to justice—and quickly. In fact, to show how serious he is, he declares he is going to file a lawsuit for you right now, today!
For many potential clients, this behavior can be very appealing. You may sign up right then and leave thinking this is the right attorney for you. However, be careful. The mere filing of a lawsuit does not necessarily increase the value of your claim. In fact, it may only increase the amount of money your attorney makes. Attorneys who work on a contingency basis typically work on a tiered contingency agreement. This means that the attorney obtains one third of any settlement obtained before filing a lawsuit and 40% of a settlement or award obtained after filing a lawsuit.
Frequently, by filing a lawsuit on your behalf that very same day, all the lawyer has done is guarantee that he or she earns a higher percentage of your settlement. That isn’t right. Furthermore, not only does filing a lawsuit increase the attorney’s percentage, it also increases the amount of expenses. As a result, many times the aggressive filing of a lawsuit, notwithstanding Mr. Aggressive’s fanfare, significantly decreases what you walk away with at the end.
Occasionally, clients become impatient with the settlement negotiation process and want their attorney to file suit just to “send a message.” For the reasons shown above, many attorneys are only too happy to oblige. However, you are better off having an attorney who is willing to take the time to explain why it may not be beneficial to file suit too early.
Another way your attorney can take advantage of you is by artificially inflating expenses. Contingency fee attorneys pay for all expenses up front. This means that if your case goes nowhere and you are awarded no money, the attorneys have to absorb those expenses. You are not responsible for expenses if there is no award. However, if there is an award, those expenses come out of the settlement.
Unfortunately, many attorneys see the expense column as an easy way to pad their fee. To prevent this common practice, you should request an itemized statement of expenses with receipts. In fact, you should require that this itemization be included as part of the contract. If your attorney won’t agree, go somewhere else.
Now you are ready to begin looking for a law firm. Just remember to hire a law firm that can represent you all the way to the courthouse, that is not too hurried to file suit, and that will provide you with fully documented expense reports. Do this and you will solve 90% of the problems clients often encounter with their attorney.