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By Bill Altreuter

The New Year brings a new edition of Professor Siegel's newsletter, always a bright spot in the morning mail. The lead decision under discussion in this month's edition deals with unconscionable fees. In Lawrence v. Graubard Miller the Court of Appeals finds that the question of whether a $40 million dollar fee for five months worth of work on an estate is "unconscionable". The answer is, we don't know. The procedural grounds on which the matter reached the Court of Appeals did not permit for the development of sufficient facts on the record to make the determination, so the matter was remanded. Sigal notes that the Court dropped a hint in a footnote: [I}t is not unconscionable for an attorney to recover much more than he or she could possibly have earned at an hourly rate [and if] courts become too preocupied with the ratio of fees to hours contingency fee lawyers may run up hours just to justify their fees, or may lose interest in getting the largest possible recoveries for their clients."

Whenever I come across a case about contingency fees I am reminded that in just about every other jurisdiction in the world they are at least unethical, and usually flat illegal. I can see the reasoning for that, but given the overall economic structure of our society and our legal system I am inclined to believe that in the US at least there is a good deal of validity to the notion that the contingency fee is the poor man's key to the courthouse. That doesn't seem to be what was going on here, but sauce for the goose you know? Rich and poor alike are forbidden to adjudicate their estates under the bridges of Paris.

Full post as published by Outside Counsel on January 05, 2009 (boomark / email).