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I have written in an earlier blog that virtually all lawyers handle injury and death cases on a contingent fee basis which means that the fee charged is a percentage of the client’s recovery. Although some lawyers charge 1/3, most ask for 40%. However, in Mississippi lawyers can charge as much as 50%! Fees in Mississippi are regulated by Rule 1.5 of the Mississippi Rules of Professional Conduct.Mississippi Rules of Professional Conduct. Rule 1.5(a) provides that: "A lawyer’s fee shall be reasonable" and then lists eight factors to be considered in determining the reasonableness of a fee.

Rule 1.5(c) provides in part that: "A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated."

Unfortunately, nowhere in the Rules is any requirement that a lawyer tell a prospective client that both contingent fee percentages and whether expenses are deducted before or after the contingent fee is calculated are negotiable.

Let’s take a worst case example for the client. You hire a lawyer in a serious case and agree to a 50% attorney fee with the costs to be deducted after the contingent fee is calculated. Over the course of the case the lawyer advances $50,000.00 in costs for depositions, expert witness fees, and medical expert fees. If the case is settled or there is a jury verdict for $250,000.00, the lawyer takes $125,000.00 as his fee leaving the client with a gross recovery of $125,000.00. However the lawyer then recovers his $50,000.00 in costs leaving the client with a net recovery of $75,000.00. Most lawyers would not do this, but the Rule allows this.

Let’s take a more likely example using the same settlement figure and costs. In this case the lawyer charges a 40% fee with costs to be deducted before the contingent fee is calculated. When the $50,000.00 costs are deducted from the total recovery of $250,000.00 there is a gross recovery of $200,000.00. Now the 40% attorney fee is $80,000.00 and the client’s recovery is $120,000.00.

What’s the moral of this story? Be sure you discuss the terms of any contingent fee with the attorney before signing any contract. In fact, if you have been seriously injured due to someone else’s negligence, you should probably talk with several attorneys before deciding which one should handle your case.

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