(2) Special Problems with Contingent Fees  Classic U.S. “contingent fee”: % of recovery  What ethical problems does it present?  “acquiring a proprietary interest in [client’s] cause of action”, MRPC 1.8(i): potential conflict of interest  lawyer-entrepreneur, “stirring up” lawsuits  why this exception (1.8(i)(2))?  no explanation in current Comments!  traditional: enables access to civil justice for claimants otherwise unable to pay a lawyer

Contingent Fees c’t’d  Other kinds of “contingen[cy] on outcome”  fixed amount if successful, lesser amount if not  UK: “conditional”, bonus up to 50% of normal fee  France and Italy: palmarium: fixed fee plus additional amount if successful – the latter can be measured by the amount of recovery  traditional view in most other countries: U.S. version (“quota litis”) is unethical

Problem pp  Who decides whether or not a contingent fee should be charged? What considerations are relevant?  What special requirements do the Rules impose?  40% contingent fee, lawyer files petition, D’s insurer immediately offers full amount of policy ($500K), D has no other assets.  Is lawyer entitled to $200K? MRPC 1.5(a); Rohan, p. 174  If not, what amount?

Problem pp c’t’d  Structured settlement under contingent fee  $100K up front, $25K/yr for 25 yrs or to death or remarriage, whichever first  How to measure and/or collect, if not specified in fee K?  default position: agreed % of each payment rec’d by client, when received  problems:  delay in getting paid  contingency of total amount  solution: up-front amount + cost of annuity

Problem pp c’t’d Contingent fee in marital dissolution case, MRPC 1.5(d)(1)  What are the policy considerations?  Would any of the alternative fee arrangements in (b) pass muster?  dissolution contested?  dissolution not contested or already granted?  dissolution granted, support awarded, H is delinquent on payments – contingent fee for recovery?

Problem pp c’t’d Widow is decedent’s life insurance beneficiary, accused of murdering him  lawyer asked to represent her in both civil claim and criminal defense  can lawyer properly do both for 25% of insurance proceeds? MRPC 1.5(d)(2)  if the representation is improper under 1.5(d)(2), and client is convicted, is the conviction unconstitutional?

(3) Division of Fees  Lawyer A refers medical malpractice case to lawyer B, then receives check from B for $200K, as “your share” of the fee he earned  What should you do with the check? MRPC 1.5(e); Chambers, p. 183  Would the answer be different, if A and B had entered into the agreement described in question (b)?  What about sharing fees with a deceased partner’s estate, or a retired partner? MRPC 5.4(a)