Posted in Litigation Strategies, Uncategorized
A contingency fee arrangement is a payment made to an attorney for legal services that is contingent upon the recovery in the case; the recovery is defined as either a settlement or an award that is given by the court or jury. When there is a recovery, the payment is a percentage of the total amount recovered. For example, if all parties agree to settle the case for $100,000, and assuming that the client agreed to pay the attorney 25% of the recovery, then the client would pay the attorney $25,000. On the other hand, if the attorney lost the trial and did not recover any amount for the client, then there would be no payment to the attorney. A contingency fee arrangement is often used in civil matters, especially in personal injury cases, but is rarely used in commercial litigation. In these circumstances, the client pays the attorney hourly or uses a hybrid contingency arrangement, which is partly based on an hourly rate and partly based on a percentage of the recovery.
When a client hires an attorney to pursue or defend a case, either the client or the editor is entitled to end their relationship. During the course of the litigation and depending on the bond between the client and the attorney, the client sometimes comes to the conclusion that their objectives and needs can be better served by a different attorney; sometimes the attorney wants to quit because of a diminished financial incentive to complete the case, a conflict of interest with existing or formal clients, or a disagreement with the client as to litigation strategies.
What happens when the client decides to change the attorney or when the attorney quits the case before there is a recovery? Is the client responsible to pay the attorney for the services rendered? Is the attorney entitled to compensation for the hours of work that he or she put into the case? The answer is that it depends on how the client and the attorney ended their relationship.
If the client decides to change their attorney, then at the conclusion of the case when there is a recovery, that attorney is generally entitled to some compensation for the time they spent on the case prior to the client’s retention of a new attorney. The amount of compensation to the prior attorney can be agreed upon and is often based on a percentage of the payment of fees to the new attorney. However, if the parties are not able to amicably agree on the issue, the parties will ask the court to intervene. In that event, the court will make the determination based on the nature of the case, the hours spent, the reasonable hourly rate for an attorney of similar experience, knowledge, etc.
If the attorney quits the case prior to any recovery, then the attorney may not be entitled to any fees even if the client agreed to the change of attorney. In that situation, the court will examine the reasons for terminating the relationship and whether the termination of the attorney client relationship is based on permissible reasons, such as a financial reason, a personality conflict with the client, or a mandatory reason such as a conflict of interest with the attorney’s existing or past clients.
In the case of Rus, Miliband & Smith v. Conkle & Olesten (2003) 113 Cal.App.4th 656, an attorney under a contingency fee agreement was allowed to withdraw without compulsion, meaning that the attorney had to withdraw from the case to avoid an ethical issue, and still seek fees from any future recovery, which will create an unreasonable burden for the new attorney who is willing to spend their time, effort, and risk of obtaining the recovery. Thus, the attorney who quits a case without a compelling reason will not be entitled to fees. In other words, if the prior contingency fee lawyer quit, then the fee interest of the quitting attorney is not preserved. Hensel v. Cohen (1983) 155 Cal. App.3d 563.
If you have a situation where you are considering changing your attorney on a contingency fee matter, you need an experienced civil trial attorney to guide you through the issues or even take on your case. Call the Law Offices of Tony T. Liu at (714) 415-2007 today.
Business Litigation FAQs
Insight into litigation whether related to contracts, partnerships, or other aspects of business operations is required when facing legal issues. For many business owners, questions arise when considering litigation or alternative ways to handle disputes. We’ve addressed some of the most common inquiries about business litigation to help clarify what to expect in these situations. If you’re looking for an Orange County, CA business litigation lawyer, having answers to frequently asked questions can be a useful starting point in understanding potential legal needs.
What Are Common Types Of Business Litigation?
Business litigation covers a range of disputes, with some of the most common involving breach of contract, partnership disagreements, employment issues, and intellectual property claims. Breach of contract cases often arise when one party fails to meet the terms of an agreement, which can disrupt business operations. Partnership disputes, meanwhile, may involve disagreements over financial responsibilities or business decisions, and these disputes can quickly impact business continuity if left unresolved. Employment litigation often focuses on issues like wrongful termination, discrimination, or wage disputes, while intellectual property cases usually involve protecting trademarks, copyrights, or patents against infringement.
How Long Does A Business Litigation Case Typically Last?
Based on the complexity of the case and whether the dispute can be resolved early on can vary significantly in situations involving business litigation. While some cases may resolve within a few months if the parties reach an agreement, others can extend into years, especially if they go to trial. Factors such as discovery, where each side gathers evidence, and pretrial motions can influence how long a case lasts. Many business owners find that understanding the stages of litigation can provide better insight into the expected duration of their specific case.
What Is The Process For Filing A Business Lawsuit?
Our Orange County business litigation lawyer shares that filing a business lawsuit typically begins with evaluating the merits of the case to determine if litigation is the right path forward. Once a decision to proceed is made, the plaintiff files a complaint detailing the nature of the dispute and the relief sought. After filing, the defendant is served with the lawsuit, and the case moves into the pretrial phase, including discovery and potential motions. During discovery, both parties gather evidence, and this phase can last several months. Following discovery, the case may proceed to trial, though many business disputes settle before reaching this point. Each step requires careful preparation and understanding of procedural rules.
When Should A Business Hire A Litigation Lawyer?
Hiring a litigation lawyer can be beneficial when facing any dispute that could escalate into a legal claim. It’s often best to involve a lawyer early on, as they can help assess the strength of the case, determine the best approach, and identify any legal requirements. Having legal guidance from the start can also help avoid missteps that could impact the case down the line. For many businesses, retaining legal counsel as soon as a dispute arises can provide clarity and allow them to focus on maintaining their operations.
How Is A Business Dispute Resolved Outside Of Court?
Resolving a business dispute outside of court is often possible through negotiation, mediation, or arbitration. Negotiation involves discussions directly between the parties, while mediation includes a neutral third party who helps facilitate an agreement. Arbitration is more structured and involves a neutral arbitrator who reviews evidence and issues a binding decision. Many businesses find these options attractive, as they can be less costly and time-consuming than a court trial. Working with legal counsel during these processes helps in reaching a resolution that meets the business’s needs and objectives.
Essential Questions About Business Litigation
Timely, straightforward information is essential when making informed decisions involving business disputes. For those needing an Orange County business litigation lawyer, Tony Lui has been practicing since 2003 and has the experience to help you achieve the best possible outcome. At Focus Law LA, we’re here to provide support through each stage of litigation, helping businesses move forward with confidence. Contact us today for a consultation to discuss how we can assist with your specific needs.
