Denver Bar Association
December 2005
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Savage Law

by Mel Practice

Dear Mel:

A week ago, I was retained by a client in a personal injury case. Until I signed on, the plaintiff was represented by another attorney, who handled the case for a year. About two weeks ago, the original attorney made a settlement demand so high the insurance company canceled the mediation. The plaintiff, who was really interested in settling, then fired his attorney and hired me. I didn’t have time to learn much about the case, but I remembered that the coffee at the mediation office was particularly good, so I called the insurance company, and was able to assuage its feelings and save the mediation date.

I was able to settle the case for $500,000. My client was thrilled, and was more than happy to pay my $166,000 fee. Do I have to pay the previous attorney anything? As far as I can tell, her inflated view of the value of the case was an impediment to its settling, so she actually did more harm than good for the plaintiff. Answer soon, the Hummer salesman is getting impatient.

  ~Rollin N. Doe

Dear Rollin:

Your talent for assuagement is awesome. Drop a few suggestions on the insurance company. that will keep their mind off prior counsel. You want only your name and the client’s on that $500,000 draft. Warn the client in a careful CYA letter that his share of the money is at risk for the other lawyer’s percent, mentioning the vagaries of quantum meruit. Once he signs that letter you are clear to go. If you look again at the wording of your contingency fee agreement (but I don’t know why you would at this late date, three whole weeks into the case) you might get hung up over that clause dealing with several lawyers engaged to work on the same claim not increasing the fee percent. Skip it. You saved the day, so quit worrying.

~Mel A. Tonin.

Dear Rollin:

Don’t be in such a hurry. Hummer prices are plummeting due to the high price of gasoline, so you’ve got time to analyze this more carefully.

If you’ve got a set of statutes, why not pull out the volume
entitled "Court Rules, Book 1?" There is a section in there called "Colorado Rules of Professional Conduct." Rule 1.5 governs attorney fees, beginning with: "A lawyer’s fee shall be reasonable." Now, you mentioned that you had this case only one week before the settlement. Assuming you worked that entire week on this one case (and don’t forget, you also mentioned that you didn’t know much about the case), your fee works out to $4,150 per hour. Of course, this is a contingency case, and you took the risk (slight, though it appears to have been) of getting nothing for your time and expertise. Therefore, you can’t be held to a strict hourly fee. However, in determining whether your fee is reasonable, it can be argued that an hourly analysis is helpful.

I cannot say that your fee is patently unreasonable (after all, it is possible that the claim arose from complicated multi-state tobacco litigation, where an hourly analysis has allowed fees even larger than yours). Even though your client was "happy to pay," you must still determine whether your fee is reasonable under the circumstances.

The upright, professional (and yes, maybe even ethical) thing to do is to try to work out sharing the fee with the other attorney. First, you need to see what kind of arrangement she had in her contingency fee agreement for early termination of her services.

As luck would have it, both the CBA and DBA have established fee dispute arbitration committees, where you can get this settled at no cost. Contact Carolyn Gravit at cgravit@cobar.org or (303) 824-5340 for more information.

~Mel Bourne

Let Mel Practice answer your questions related to life, law and
anything you’d like to know. E-mail your burning question to
savagelaw@cobar.org. Nothing is too outrageous!


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