08192017Headline:

Vancouver, Washington

HomeWashingtonVancouver

Email Don Jacobs Don Jacobs on LinkedIn Don Jacobs on Twitter Don Jacobs on Facebook
Don Jacobs
Don Jacobs
Contributor •

Contingent Fees and Frivolous Lawsuits

Comments Off

Oregon is about to put an Initiative on the ballot that would limit contingent fees charged by attorneys. At first glance you’d think this is a good idea. Don’t lawyers make lots of money? Why shouldn’t we pass laws that limit what they can charge? Once again the usual urban myths are trotted out by the people who have the most to gain by proclaiming them. Do lawyers make a lot of money? The answer is yes, although they do spend three years in law school after college and usually graduate with a six figure tuition debt. But how do they compare with other professionals? If you look at the Bureau of Labor Statistics, the median income for lawyers in 2004 was $94,930 a year. This means half of all lawyers made less, half made more. In contrast, the median income for doctors ranged from $156,010 to $321,686 depending upon specialty. Dentists came in at $129,920. But what about trial lawyers that charge the typical one third contingent fee? Don’t they make all the money? Actually no, corporate lawyers made the most. Over 85% of all partners in corporate law firms earned more than $200,000 in 1995. Lawyers who charge people on a contingent fee only get paid if they win. If they don’t, they work for free. Without this system people who can’t afford to hire a lawyer by the hour would be at the mercy of big corporations or insurance companies who have unlimited legal budgets. So who do you think has an incentive to convince you we need to pass laws limiting what lawyers can charge on a contingent fee? Do you think limiting what you can pay your lawyer will level the playing field when you have to fight an insurance company? Do you think it’s fair to have laws that limit what you can pay your lawyer but not set any limit on what the other side can spend? The proponents of this law like to ignore the one sided nature of this initiative. Besides, they say they need to limit contingent fees to reduce frivolous lawsuits. Would limiting what a lawyer can charge on a contingent reduce frivolous lawsuits? Actually, it’s just the opposite. Lawyers who take cases on a contingent fee take a big risk. If they lose the case, the lawyer is paid nothing. A lawyer taking a case on a contingent fee almost always has to front all the court costs. This can amount to many thousands of dollars. When a lawyer takes a case and loses, he’s just been rendered unemployed for the whole time he’s been working on the case. And he also loses all of the money he invested in the case as court costs. In other words, a contingent fee attorney can’t afford to bring a frivolous case. Passing a law to limit contingent fees below the standard one-third will only make it harder to get a lawyer. Now who would benefit from this? The consumer? How about the people who can afford to hire as many lawyers and pay them as much as they want. The very some people who want to get this law enacted. It’s a great way to get virtual immunity for any damage they cause.