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Comment litigation agreement

hi i'm henry quillian i'm here at taylor english with all my colleagues in the litigation department this is litigation fundamentals with henry quillian at taylor english duma and what we're going to talk about today is sort of analyzing going through a contingency fee agreement that i ran across and looking at all the terms that would be terms you would want to consider in connection with any contingency fee agreement you're into relating to litigation this one's sort of uh loaded up for lack of better description and the claims that it's associated with are sort of loaded up such that if you take the agreement on his face and presume a successful outcome in the litigation on his face you can end up with sort of extraordinary results for the lawyer and law firm so i thought it was good to look at these because it really does almost within it have a checklist of all sorts of things you'd want to consider when you're entering into a contingency fee arrangement for those out there in the world this is really just an analysis of terms for you to take a look at when entering into a contingency fee of relationship if you're a lawyer on the flip side if you're a client you might want to look at the terms that your contingency fee lawyer is putting in front of you and consider if it's a very significant matter getting a lawyer to help you in negotiating that arrangement because can make a huge difference as a matter of fact in this sample agreement which of course i sanitized this is from a situation you will see that it says it is imperative that you receive independent legal counsel to advise you before signing this agreement so and essentially what you're doing is you're going to a lawyer so you have to get a lawyer to go to the lawyer and to get yourself signed up for this engagement and there are risks that we will talk about for the client within the context of this engagement agreement that the client would want to be aware of before they are unhappily surprised down the road so let me set up the underlying subject matter and it's going to be fairly straightforward but reasonably complicated because we all are smart people and like complicated things we're contemplating a state false claims act case we're assuming it's going to be successful at the end of the day and that the total claim established by the state against the defendant will be 10 million dollars in connection with that the law firm that's getting this engagement will have accrued 400 000 worth of hourly accrued time associated with their lawyers at whatever reasonable rates they put in there and that the costs which are defined in this agreement will have totaled two hundred thousand dollars in connection with this false claims act case which is a direct action that is brought by somebody called a relator somebody who is a whistleblower on behalf of the state against the defendant that person also happened to be fired in connection with uh caught blowing the whistle on the employer and that person lost 400 thousand dollars in wages and during the course of the litigation the lawyers allocated a hundred thousand dollars worth of hourly accrued time to uh winning the case for the lost wages now i'll point out this is not the last wages damage award this is the wages that were actually lost and of course i think probably just about every state has a false claims 8 act statute they're likely to be different and various states have different provisions etc but in this state for instance the theoretical state we're talking about it allows trouble damages on the actual losses to the state against the defendant so in theory the actual loss to the state was 3.33 million and it also allows double recovery for the lost wages to the injured party who was fired because of blowing the whistle on the employer so as we'll talk about later at the end of the day we would end up with a 800 000 damage award associated with these lost wages so we've got pretty big numbers not ridiculously high numbers and uh client does not want to pay five hundred thousand dollars plus two hundred thousand seven hundred thousand out of pocket in order to pursue this action and uh this is sort of an aside but the hope is by the lawyers that the state attorney general's office will ultimately take over the false claims act litigation and pursue it to the end and that impacts not the fee agreement but it impacts who has to do how much work basically another thing i'll point out is uh that the law firm would typically advance fee these costs associated with the with the case and that's what's contemplating this agreement so we have a situation here where the client wants to bring out and bring this action they think they're going to make a good relator and the relator will sort of have certain rights in the recovery that's ultimately obtained by the state we're going to assume for the moment uh that that is a and it's on the high end of the spectrum especially if the state takes over the pursuit of the litigation that that will be a 25 percent of the total to the state recovery which means to the benefit of the relator i.e the client in this matter that would be 2.5 million dollars so the client walks in agreement is given to the client the agreement says you better go get independent legal counsel typical client i would say 85 percent of them say where do i sign maybe not even read the agreement uh let's hope they read the agreement but typical client where do i sign if you know they have not signed a scene independent council and you witness them sign it is there any issue because you have knowledge that they didn't actually go get an independent counsel but they've warranted that they have okay so the question is if if as a lawyer you have this thing saying i warranted that i got independent counsel but you know you handed them the agreement ten seconds later they're signing it and there was no independent counsel present in the room with them what does that give rise to ethical problems i would say yes uh i think that uh and what i was sort of wondering is the disclaimer is i didn't want to i don't want to try to get into all the ethical issues that this type of setup could lead to because they are numerous but to me if you if you're the lawyer and you take the agreement especially if you go down there's an affirmation a warranty that they've had the opportunity to and have sought uh independent counsel i don't see how you can take it the next day i think you have to say go get your lawyer and come back me tomorrow morning at the very at the very littlest otherwise you're going to have a a known falsity sort of baked into the into the whole scenario yes do you have to give the does the individual actually have to seek independent counsel or is it sufficient that you've given a reasonable opportunity to do something i i have to say it has to be the latter it has to be the person that has a reasonable opportunity to include in the draft letter then a representation that the individual has in fact solved in your counseling oh well this is a letter that was put on my desk this isn't a letter i drafted okay and i also will say this is a letter that i have that i've seen the substance of which i've seen a number of times i guess i'll put it that way so therefore it gives rise to all these questions and and uh i think as a law firm entering into a corporate type relationship a relationship a commercial relationship you want affirmative statements like that from the person that's signing it so that you can say well we told them to get counsel they said they got counsel how we don't know they didn't get counsel all right but like todd was saying if if the if it's a hand them the document and they sign type situation and it actually says i did get legal counsel that's a that's a problem and so i don't know that's subject matter for another day in fact i think i could do a whole we could probably do a whole seminar on the ethics of contingency fee agreements uh but if you know they didn't get counsel to have them sign an agreement saying they did that seems to be not within the realm of what i think should be done by a lawyer okay so any in any whistleblower act there could be criminal situations in this situation the uh attorneys saying hey if you get called as a witness or whatever we'll we'll uh you know defend you etc and that not in not in a situation where you've actually been targeted but we will help you out if you have to go testify and that's in part i would say to protect their own interests in the contingency fee case that they have pending simultaneously they talk about here's a provision that virtually all the agreements should have which basically says if we're changing anything in this agreement since it's a written agreement it needs to be reflected in writing and then it has the duties of the lawyer to zealously represent the client and of course it has the disclaimer which lawyers love as you know there can be no guarantee of complete or even any success in any given matter or objective now so we have a start date of representation we have a description of what the representation is going to be we're going to represent you in these claims and then we have a start date for the representation which will be the date of the that's filled in for the agreement and then we have an end date termination of the agreement which we'll go over later which is a really dicey area when you're talking about contingency fee cases all right so uh the lawyer says i'm gonna represent you in all this i'm gonna do be your illegal advocate we don't know how much time it's gonna take it could take a ridiculous amount of time it could take a little bit of time we're gonna use our paralegals we're going to use other vendors and people that are providing services and and you're asking them to do it on a contingent-fee basis and you have considered the risks involved in this case as all uh lay people are well able to assess and their experience and represent reputations that goes to how much you might want to pay them on an hourly basis if they were to do it and whether they're going to win or not you think they're going to be good or not you think they're going to be ethical or not and the uncertainty of the number of hours necessary to prosecute the case now here we get to the the note of this so how are are the lawyers gonna get paid well as mentioned in a false claims act case if the gross amount of the recovery to the state is 10 million and you assume a 25 relators portion of that how much is 25 percent of 10 million 2.5 million so that would be a number from which a number i'll point out not necessarily the number depends on what the agreement says from which a contingency fee meaning the fee portion of the payment to a law firm is calculated in this instance as you can see they talk about 40 percent of the gross recovery and 100 of the attorney fee award now that's wonderful that's a question all right so if you've got a contingency fee for work and then you have 100 of an attorney's fee award what is that other element all right so under a false claims act typically what would happen is after winning the lawyers would submit what's called a load star claim to the court for consideration that consideration would be based on an assertion by the lawyers that their time accrued at a reasonable hourly rate that they had to do this work it was reasonable and necessary it's very similar to ocga1360 uh claim uh where they've there's proof shown that they have their high competence they're worth this amount of money they had all these associates working on it etc and so i just assumed a four hundred thousand dollar accrued hourly for just the false claim diet portion not associated with the employment claim uh there's only one thing though uh that attorney's fees award as defined also can include an award of the costs or expenses associated with litigation but we'll see how that that flows through this agreement so this attorney's fees award also can be grossed up by the court the court can in this discretion can grant either two-thirds of the or any percentage lesser than one uh of the award of the claim by the lawyers for attorney's fees or if the court is particularly wowed by the lawyers and what a great job they've done the court can give a multiple of the hourly accrued so now we're talking about stacking of attorneys fees forty percent of the gross recovery plus one hundred percent of the attorney's fees award something you'd want in every contingency fee agreement what is the gross recovery here interesting definition in that it basically it says ghost cropping means and encompasses any and all amounts and or things of value recovered in or because of the case whether by settlement judgment or otherwise it includes but is not limited to cash real property tangible and intangible personal property whether payable to or deliverable to you third parties or us it's hard to know because in this instance this third parties being the state the state would be a third party is between the firm and the relator but the state's going to be getting 7.5 million so there's an ambiguity in this particular agreement from my perspective especially if you're talking about bringing an action on behalf of of the state and i don't know who the other third parties might be but i guess the future would tell but does not include the attorney's fees award or the cost okay so basically if you're doing any contingency fee case you got to contemplate all the different ways you might get paid at the end of the day and i've certainly had contingency fee cases where uh somebody said the defendant says well i don't have cash but i'll give you my lake property or whatever as as you're part of your recovery and if it's your lake property as lawyer how do you value that from the standpoint of your you and your client this contingency fee agreement does not have an appraisal provision in it but i've done that before in contingency fee agreements where i say if something other than cash is paid by the defendant you know we will have a you'll get an appraisal appraiser i'll get an appraiser then we'll have an umpire and if we can't reach an agreement or if you can't reach an agreement as to what the appraisal should be in order for calculating the fee then uh then we'll have a third person decide and it'll be like an insurance claim uh appraisal where the amount that's attributable to the for purposes of the contingency fee is calculated that way and then somebody's gonna have to may have to sell a piece of property in order to pay that fee you don't know it depends on how rich the person is you're dealing with they don't know they can make it up in cash or not and i certainly know lawyers i personally know lawyers who have gotten cars mountains property on northside drive or on riverside drive as part of their contingency fee you know as for a case they pursue in fact i know one lawyer if you go on northside drive the tuxedo elementary school that was actually property that was part of a contingency fee one time uh so you got to have some provision that that captures all these things that you want to include as part of the base value from which you're going to calculate the contingency fee so i hope that it's cash but uh but then again it could be something else i know eddie garland who my wife worked with had a mercedes and had a big chunk out of the bumper on the mercedes and that was part of a fee that he got and it had gotten hit with a bullet or something so they chopped out the part of the bumper because it needed to be used as evidence but he got the car that was a while back okay so the attorney feed award means anything encompasses any and all amounts or other things value covered in or because of the case and resulting from the award or order or agreement or payment to pay illegal fees and includes but is not limited to cash blah blah blah blah but the term does not mean include gross recovery as defined in this section or cost so however those costs are defined differently from way the third party court might refer to as cost but it's possible to get like i said an award from the court from the defendant made payable to the law firm that is on top of the gross recovery now this is a an important provision to have in any contingency fee agreement because it's possible that you're going to be getting your money at the end of the day in some sort of settlement over time and so that gives rise to when do the lawyers get their money versus when does the client get their money and the way they've set this up here is you figure out the total value of the structured payments over time and then you apply a present value calculation you identify how much that is at the time of the signing of the settlement or the entry of the judgment and then you it says our fee will be paid out of the initial lump sum payment if the payment is not is insufficient to pay the contingency fee in full the balance will be paid from subsequent payments before any distribution to the client so theoretically if it's a long payout the lawyers could get paid for years before the client gets a dime and so the client will have some say in this in the overall setup of the settlement but they would need to be able to do a lot of different calculations and a lot of different uh determinations might need their own lawyer to represent them in connection with how they're going to do the settlement in order to avoid uh basically dying before they ever get anything just leaving it to their children or whatever depending on how big the fee is and whether and how and when the money is going to come in there are lots of different ways you could do this in a typical contingency fee arrangement you could have it so the money is just split as the money comes in or as it's collected or you could try to get it all up front as the law firm and then eventually have the client get the money so of course it says if there is no gross recovery or attorney's fees award we will receive no fee and that is the risk that the law firm takes as a contingency fee uh lawyer and of course that's what we all hope never happens to us this is a very interesting provision it says uh that you are at the time of the determination of a gross recovery or and or the entry of an attorney's fee award uh this amount is segregated off and it becomes the property of the law firm immediately and we can go collect that abs even in the absence of your attempt to collect your portion of the recovery and i i can't quite figure out how they contemplated this being carried out because uh if the law firm were to say all right we've got this huge judgment by client we're going to collect our money good luck with yours that doesn't seem to be full and zealous representation of the client but the way they have this set up is it's a separate and independent property right in the recovery and it seems to me like there ought to be a proportionality or some commitment on behalf of the law firm to pursue recovery and then that the money would be split on a pro rata basis depending on how the calculations come out and and also depending on whether as we'll see whether costs have been recovered has anybody ever seen a provision like this or they try to segregate out the fee and say that's that's our property interest once it's determined what it is and the only thing i could see why you'd want to do that if your client died or something in there and their estate said i don't want to do this anymore i don't i don't want any interest in this i never liked that case to start with yet the law firm has won this huge award and they want to be able to pursue it but i think we would need to look into the ethics of that but if it is ethical it's something to consider because you don't want to have a right that you can't pursue if you spent your life you know giving rise to that right okay so one thing i have and so and then we have the cost provision which says we will incur various costs expenses and then providing the legal services and costs are basically defined as pay all these payments to third parties where we call them expenses in georgia it's court reporters consultants expert witnesses couriers legal research etc so let's take a second and talk about it under this scenario how the money would play out for the law firm and the client so out of 10 million dollars we've got if we got a 40 contingency fee that comes out to be a million dollar fee everybody in agreement with that so we would have 2.5 million minus a million and so that million goes over to here that's the happy day for the lawyer leaving 1.5 million okay but then you'll see that there's a right for the firm the firm will receive payment from you of the costs let's see it's right here this firm will receive payment from you of the cost immediately upon receipt by you or this firm of any portion of your gross recovery and uh and will do so by taking or and receiving that portion the full amount of the costs incur to date so firm takes the cost so that leaves 200 000 minus here one three 1.3 million so that's gonna be a plus two hundred thousand and this is recov this is a reimbursement for what they've already put taken out of pockets but they'll end up netting well grossing 1.2 million out of that settlement but then they may hire additional counsel if they do they'll be calculated just like they would if they were working for the firm if they're disputes then they'll be arbitrated the state and that's an important provision to have we have one in our standard fee agreements arbitration in the event of uh in the event of a dispute however as you can see these people choose the american arbitration association not the state bar and that could be an important decision to make as to who's going to be the one to resolve fee disputes actually it starts off with the state bar and then if there are other disputes that are outside the scope of the engagement agreement then then they go to the american arbitration association and that could be something i suppose like what's the value of the real property that has been obtained as part of the settlement that we can't decide on what it's worth now as mentioned however what if the court enters an attorney's fees award as a result of what's called this load star submittal to the court so in that instance the court the law firm's gonna say well we did a heck of a job on this matter we spent four hundred thousand dollars uh and we incurred two hundred thousand dollars in costs so the court might come back and say well yeah you did such a good job we're gonna give you eight hundred thousand for the four hundred thousand dollars worth of work now is that i've definitely seen it happen reported in cases so and then also you spent all this money on this the court sort of assumes as if there is no recovery on a contingency fee basis by the by the lawyers and so theoretically uh the law firm could have another eight hundred 000 which is twice their hourly rate plus another 200 000 recovery the way they have this thing set up because they excluded the cost from the attorney's fees award and from the gross recovery which could result in a total of uh 2.2 million really happy day if that happens and they collect it but we also have this other claim that's based on essentially the exact same facts and under that under that case you can get if you use this particular statute you can get up to twice the lost wages which would be eight hundred thousand dollars and so if they let's if they prove this then they're almost certainly gonna if they're if they're gonna prove this they have to prove this but if they do prove this very likely they're gonna end up being able to prove the lost wages claim so if they had the eight hundred thousand dollars in uh recovery uh that would be uh minus 320 000 in fees so that goes over this side this is why people do contingency fee work if it comes out well it can come out really well and then which yields only uh 480 000 for the client but since it's a lost wages claim let's say they have a 40 percent tax load on that so that would be to the federal government 320 000 and it would be of the 800 000 i believe and uh the state fed so that would mean the client could end up out of all that with 160 000 but the lawyers could end up with uh 320 000 recovery on the uh contingency fee and then they could end up with a recruit a hundred thousand dollars on the hourly award which is also provided for in the statute so they could end up with 420 000 plus the 2.2 million for pursuing this case uh anything coming to anybody's mind concerning the outcome of this this matter both for the lawyers and for the anyway i have a client question though numbers um i wouldn't even know in practice how does it work not necessarily under this scenario but if you get awarded punitive damages and um how does that work for the necessarily for the attorney in georgia and this is kind of left field and i was curious well i mean i think an attorney i think a punitive damage award is for the attorney from the attorney's perspective is exactly like any other judgment you get if you get it and collect it then it's this calcul calculates and flows through your contingency fee agreement just like any other money would anybody disagree with that and that's what we all want right we want the claim that has a hundred thousand dollar and then 15 million dollars of actually we don't want too much too big of multiple or we'll litigate it forever but we'd love to get maybe three or four times our actual damages right on a punitive damages so it won't be found to be unconstitutional so it would flow through if you collect it now we get to some really tricky aspects of this agreement so what happens it however yeah you mentioned one thing first regarding the out-of-market costs so the firm has to top-notes and they're treated as a a loan for tax purposes so you don't get a tax deduction for those expenditures until the case is settled so depending upon the amount of the investment involved the firm has to invest after tax dollars to fund those costs all right so are you stating that as a fact are you just making a comment or i mean i what so that y'all can hear what he's saying is that when the firm does advance these costs these expenses that's all with after tax dollars from the perspective of the firm and the tax ratification of that can't be really addressed until a settlement so for instance if you end up spending all that money and getting nothing then you spent after tax money that's out the door unless you can get it back in the clock is that all right so we're not giving legal tax advice but that's an observation uh concerning this matter but it does come up in connection with this termination provision now lawyers want to be able to get out of a situation if they need to or and they also want to be protected if their client wants to skedaddle on them right as they're about to get a big recovery so this provision this document allows for the law firm we may terminate this agreement at any time with or without cause and we will notify you in writing of such termination cause for termination shall include failure by you to honor the terms of this agreement or for any reason required under the code of professional responsibility or the rules of courts of the united states are of the state of blank all right so you're the client you're signing this agreement that you're engaging these people to pursue this matter for you with great zeal you are possibly serving to them something on a golden platter that they're going to be able to make a whole bunch of money off of maybe 2.62 million dollars and they say well but we can terminate this thing anytime we want to for any reason we want to and they give this reference to this incredibly set of rules and professional responsibilities that you have no idea what they are as the client nor would you know how how they were applying them and how would you ever get a ruling on whether or not if they terminated you out of the blue whether or not they had done it for cause let's just say for the moment they find out that there's a conflict of interest with another client that they like better and so they say oh we can't represent you anymore all right so now you're stuck what are you stuck with and that's for cause and then they say we can terminate you without cause if they terminate you without cause you the client agreed to pay us for all the costs incurred through the date of such termination well what if it was well into the litigation and two hundred thousand dollars had already been spent under the terms of this agreement the client has to anti up as soon as the lawyers decide uh that they are terminating the client without cost all right now what happens if they terminate an agreement with calls you agree to pay us at a time at the time of recovery whatever that means i don't know how you're going to get the recovery without the lawyer unless you get more lawyers for all the services rendered by us at our normal hourly rates on the matters than pending and for all the costs incurred through the data termination and then that sets forth the rates of the lawyers now so who thinks the client is taking a risk when they sign this engagement agreement all right john does money does uh annette does because they could say we've got a rich client we think this is gonna be a loser case we've spent all this money let's just collect it back from the client and under the terms of the agreement they would have the right to send a letter saying we have determined that we can terminate you with cause because we think there's a professional rule involved when i got to and we're going to terminate or we can combinate you without calls and get all our costs back if they can come up with some professional rule or rule of court as an excuse then they ultimately can co recover all this hourly rate that they never uh but only in the event well it actually says at the time of recovery so the question is when is the time of recovery also it put the client in a huge burden such a bad situation because uh they would have to get a new law firm and the new law firm would be the case would be burdened by this expense of all these uh fees that have run up and costs and they may you may have a very hard time getting a new law firm so as to get a recovery now so that would be one reason for sure why a client would want to get a lawyer to negotiate this fee agreement now look at the opportunity of the client you may terminate this agreement at any time with or without calls and you agree to notify us in writing a such termination in the event you terminate us with calls you agree to pay us for all costs incurred through the date of commitment so is that a deterrent to the client if the case has been gone for a while to the client just terminating the lawyers out of the blue yes and what if the client just says well i don't have a heart for this anymore i've i've been through i've been this has been going on for a decade and uh now there's a million dollars of cost run up class complete you know wants to move to the other side of the country but they're unable to do that because they're just having to stay around and hang out and support this case that would be what the lawyers would want to prevent the client from doing which is fair enough and this is a big deterrent to them determining i'm just going to back out of this and just say forget it and then of course if you in the event you terminate us without cause you agree to promptly pay us at the time of recovery our interest in and share of the gross recovery and attorneys fees award for all and for all costs incurred through the data termination so uh there are other provisions i've seen and and contingency fee agreements that uh will excel you know if the client if the law the client decides to terminate the law firm says they converted into an hourly rate case and the bill is sent to the client upon termination so things that you need to consider when you're entering into a contingency fee agreement is do you make the contingency fee based on the gross amount that's brought in on behalf of the client subtract the fees and then subtract the cost from the attorneys i mean from the client's recovery or do you subtract the cost first from the recovery and then calculate the contingency fee i've seen it both ways i think there are reasons for having it off the gross because the client may say you know keep spending spending spending spending if they don't have the downside of having it ultimately taken out of their recovery and uh there are and uh it seems to me like there has to be a determination of how many different ways the law firm can get paid and if the law firm can get paid especially costs more than one time both as part of the contingency fee and as part of the attorney's fees award if i was the client i would really only want to pay the cost one time so i would say something like if if i'm if you get it awarded by the court and you recover from the defendant for the cost one time i'm not going to pay them to you again that seems to be fair enough to me i suppose there could be an interest something a plot interest or something applied to those costs to make it completely balance out but if i was a client i wouldn't want to pay the cost twice i think that's an option under this agreement that's something that could happen uh if you're running to an agreement that's complicated and multi-faceted like this as we discussed earlier this one says you acknowledge again that we have advised you to have this agreement reviewed by an independent attorney of your selection prior to execution by signing a below you acknowledge and warrant that you have done so so with respect to todd's question earlier uh the across the table exchange is not going to work so well what makes a lawyer in a really good contingency fee scared about telling the client hey take this fee agreement based on this big false claims act case and go talk to another attorney about it any input on that i welcome sign up with the other attorney yeah they can sign up with the what the attorney says i'll do it at 33 not at 40 percent or the other attorney yeah there are all sorts of things that can happen if you put a nice claim in the hands of another attorney for review but i do believe as a lawyer and as a law firm if you're entering into a complicated agreement like this that requires a lot of it uh consent and a lot of advanced disclosure to the client about what could happen you're at risk if you don't tell them to go talk to a lawyer in fact you might be required to by the ethical rules regarding determination permission what are your thoughts about the fact that it doesn't mention anything about the withdrawal being maybe contingent on the court um awarding leave to withdrawal because you have oh that's a good question so we we've had situations in fact i was in we were in a federal court action last year where it took well over a year to get out the court kept coming up with more things it wanted done before it would allow withdrawal from a case so and and during that same time motions were filed had to be responded to discovery was going going had to be taken care of appearances and a foreign court had to take place and so you can as a lawyer depending on the court you can get stuck in the case and not actually get out you could i suppose put a provision in that says if we decide to withdraw because of your cause client but we're not able to then you have to start paying us on an hourly basis if you can if you can also if you can do the same thing uh under the situation where uh you know where if you just terminate terminate the client without calls and get paid all your costs why can't you also just turn it into an hourly uh uh it's just an agreement right any thoughts on that frank you you've been over there really scratching your head on a number of was just saying it's these things matter these things don't come up unless there's another lawyer around and that's the only way i've gotten involved the lawyer that goes out puts a leading on the recovery that's what he can talk the contentious he think contracts up with but i can see where these things you know should be addressed yeah and in a lot of our cases there's some possibility if you take a case on a contingency fee that there's going to be an attorney's fees award and so like under 13 611 does the law firm try to slice that off as an independent recovery from themselves or do they just take it as the gross amount of money that comes in the lawsuit and split it with the client on a on a percentage basis that would be a big issue that we could consider addressing uh yes julian if you had a provision that said an event that you withdraw without cause that you would be entitled to your cost recovery plus a contingency i think you might have an issue with whether that's a reasonable fee in right okay so just make sure the people on the video here uh julian has raised the issue that of a requirement in the state bar of georgia rules that a lawyer shall charge only a reasonable fee and that is that to me these double recovery possibilities give rise to that issue especially if you're getting what you would normally get times two plus 1.2 million which would be essentially getting four times your normal hourly rate four or five times your normal hourly rate at the end of the day and uh he's saying that if you have a situation where if you just withdraw without cost and you get your costs back and then later on you get your contingency fee you know did you haven't really produced anything but applied at that point yeah did you put anything on the table other than following the complaint you know that's that would be the argument that's an analysis you would have to go through as to whether you will ultimately be seen by somebody as being abusive of the client attorney relationship here they basically say that if if you do terminate us and they're successful council you have to pay us on an hourly basis for everything you do and then also you've said you've reviewed it by an attorney uh talk about file retention confidentiality this is a provision i would actually like to see us put in our agreement if you this on any agreement including hourly if the client has provided an email address to the firm the client acknowledges that the email provided to us is secure that the account belongs to that client and that there will not be a waiver of the attorney-client privilege or breach of the duty of confidentiality at the firm send documents to or correspondence to that account now once again that's telling the client to go make legal determinations regarding whether this will be a waiver of the attorney client privilege if i use this email address but i actually often times have a client set up a whole new email account with some reliable provider to actually do the litigation right certainly don't use their their work account you don't want to do that if it's an end of it if it's a personal matter you don't want to use their work account email account because then it's i don't know if it's privileged at all or subject to being attacked in any event and also you wonder whether you want them to use any sort of account uh email address that the other side has known they've been using for a long time that can lead to inadvertent problems of you know somebody typing in the wrong email address and just squirting over to the other side inadvertently or also could could lead frankly i think some emails somewhat easily penetrate or they could subpoena the email provider and then you have another fight on your hands uh how many have has ever just gotten a separate email address set up for just a lawsuit i know i have it's something to be worth worth considering the other thing that happens is you know whether it's lawsuit related or whether they're trying to set up a golf game with you or whatever you know if it comes from one address you know they're trying to keep now are they going to use that much discipline i don't know but you do what you can do but i think we ought to consider putting that in all of our engagement agreements and then of course it ends on a happy note we look forward to working with you hope we do hope it ends up being great please sign and send in immediately so uh those are the issues i wanted to give uh bring to your attention make you aware of false claims act cases i went to several seminars this past weekend on that that could be it could be pretty nice if you get the the right kind of case in the door but of course it could be a ton of work too any other discussion regarding contingency fee agreements and how they work and analyzing their provisions all right that's it oh john's gone somebody came to you and were dealing with the ancient cp lawyer and what did want you to review this agreement how much of this would you fight over it seems to me is egregious i would fight over a lot if it was me because there are all sorts of different there are all sorts of places that adjustments can be made such as preventing the double recovery of costs possibly adjusting the percentage in a situation where there's also an opportunity for an attorney's fees award uh provisions in there you can put provisions in that says uh you're going to try to collect from me that we had this provision up here where they separated out the ownership for lack of better description of the gut of the gross recovery and you say you're gonna you're going to work just as hard trying to collect from me the client is you're going to try to collect for yourself and then we'll only receive fees on a pro we'll only do things on a prorated basis you get your your percentage of recovery in the same amount i get my percentage of the recovery and then uh that would those would be areas and then termination you could really tighten up the termination provisions where you talk about what cause is and it's only if if i'm in breach if i is the client and a breach of the agreement for like not showing up for depositions or something of that nature uh that you can actually terminate me for calls and then make me pay all these fees to you generally speaking you don't have to uh advise a client to have another lawyer review the intentions that you can agree before the private sciences anybody i actually haven't looked at the rules on that i'm not aware of that being the case in a normal contingency fee and i presume it's not because you have to assume that 99 of the time it doesn't happen and that a lot of people have been getting into trouble if that was the case but rarely are they this complicated simple and the only thing that this was generally an argument about was when do you take your cut out and they want you to take your cut after you pay the cost so you've got to clearly define your cut is coming out of the gross right then they get there remaining amount all right so but then the other question is um uh well i get i guess there's the when does the cost come out issue and then there's the what do they have what happens if you lose issue do they actually pay you the cost and they're supposed to and can a lawyer say such as you might hear on tv uh uh you don't have to pay a dime if we don't win for you can they say that and if not and can they say that at the table as they're signing agreement sort of like you know oh i see it says that but don't worry about that we've never collect we've never gone to collect against any client isn't that unethical to advance the things without the agreement that they're paying back yes and lawyers will argue that vigorously in order to get the client to sign the agreement saying they'll pay the cost at the end of the representation uh but i have to believe at the same time they're also saying uh but we don't worry we've never gone after a client for that but you know there's always a first time right and this one it actually says uh uh but you may be possibly ordered to pay the other side's attorney's fees and costs and this and that is a possibility a possibility that again a client has no ability to assess if they're being sold you ought to bring this lawsuit by one law firm even if you go to another law firm how are they going to be able to assess without looking at everything that the plaintiff's law firm has looked at whether the case that's being brought might be frivolous and you might have to pay the other side's costs which is a big issue so if you're wealthy and you're signing up for a contingency fee agreement you better be careful if you got provisions like this if you're destitute you're not worried about it as much because nobody's ever going to bother to go after you so it is something to worry about if you're destitute how are you going go get a lawyer to help you negotiate your contingency fee agreement uh all sorts of all sorts of interesting practical problems uh anything further okay well thank you very much thank you you all come back next month for litigation fundamentals with henry quillian you