Appellate Law

How Should Contingent-Fee Agreements Address an Appeal?

By D. Todd Smith

I have been surprised at the variety of ways in which contingent-fee agreements address what will happen if the case goes up on appeal.  Some don't deal with it at all, other than to say that the trial attorney is not obligated to pursue or defend an appeal should one be taken.  At the other end of the spectrum, agreements that encompass any appeal sometimes kick the lawyer's cut of any recovery up by 5 or 10 percent.

Like most other attorney-client issues, this one is probably best spelled out up front.  Selfishly, I like the "10 percenters" because the trial lawyer is usually willing if not eager to part with the increase to have a specialist handle the appeal, especially if 10 percent is all it takes.  But some don't like a 10 percent kicker because that arrangement leaves the client with less than half the recovery after costs are taken off the top.

Depending on the case, the trial lawyer might assign the differential plus some part of his or her original share, sometimes blended with a flat-fee portion to offset the risk.  Another alternative is to take some portion of the trial lawyer's contingency, as well as some other portion of the gross recovery directly from the client.

There really is no right or wrong way to do it, but in my view, contingent-fee agreements should always spell out what happens in the event of an appeal.

Full post as published by Texas Appellate Law Blog on April 01, 2008 (boomark / email).