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ScottyMacESQ
ScottyMacESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 11502
Experience:  Licensed General Practice Attorney, Texas
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My dad has land in michigan that is the subject of an infringement

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My dad has land in michigan that is the subject of an infringement by a gas company on his property. THe DEQ has verified and now we are in the process of settlement discussions with the oil company in an effort to recover damages. We estimate the damages should be $250,000 to $500,000. Our lawyer has just sent me a contract with the following fee arrangement: $2500-retainer plus 1/3 of monies recovered PLUS I pay expenses such as copies, witness fees, travel expenses,court fees, etc. Is this customary? If not, what would bea standard arrangement for such services?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  ScottyMacESQ replied 1 year ago.

ScottyMacESQ :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacESQ :

Just to be clear, there's no hourly fee being charged? The attorney's recovery would only be 1/3 of the actual recovery?

Customer:

no hourly fee.

Customer:

actually, legal assistants and secretaries are part of the cost.

ScottyMacESQ :

Thank you. Typically contingency contracts are a "no recovery / no pay" situation, where the attorney pays everything, but the costs (fees, copies, witnesses, etc...) can still be deducted from your portion of the payment. That is, the 33% (can be as much as 40%) that the attorney takes is before the costs are applied.

ScottyMacESQ :

So in typical situations, it's often the same (although legal assistants and secretaries are covered by the attorney's fee)

ScottyMacESQ :

The only major difference (besides the legal secretaries and paralegals) is that you have a risk in this...

ScottyMacESQ :

Now it's possible that this is based upon the risk of the case.

Customer:

this contract states that i pay such expenses regardless of whether there is an actual settlement.

ScottyMacESQ :

I've entered into "hybrid" agreements similar to this when a client has a "riskier" case. That makes it better for me in the case that we lose (and I would not be out anything but my time and effort...)

ScottyMacESQ :

I understand, and that is what's not typical in the average contingency contract.

ScottyMacESQ :

Like I said, it really does depend on the strength of your case. I would at least shop around and talk with another attorney or two to get an idea of what others would charge.

ScottyMacESQ :

Another consideration is the reputation of this particular attorney... if he's the top in his field, it might be worth it, because you could get a better outcome than another attorney that might result in a lower outcome.

ScottyMacESQ :

So while it's not necessarily unusual, it's not the "norm", in that most contingency fee agreements, the client does not pay anything unless they're successful. That doesn't mean that it's illegal or unethical, but I would talk with at least one other attorney, if not more.

Customer:

so if this was a true contingency then it would be more like 1/3 with the attorney paying all expenses? Or would expenses normally be deducted from the award?

ScottyMacESQ :

Most contingency fee agreements will take the expenses off the top, then have 1/3 go to the attorney and 2/3 go to the client.

Customer:

let me make sure i get it. let's say the award is $500,000 and expenses are $100,000. The lawyer gets 1/3 of $400,000?

ScottyMacESQ :

But it could be that the expenses get paid by the client's share, so that it's 2/3 minus the expenses, and a full 1/3 goes to the attorney.

ScottyMacESQ :

In the typical situation, yes.

ScottyMacESQ :

The reason is because lawyer would have an incentive to keep costs down (as he would have a 1/3 interest in that)

ScottyMacESQ :

Otherwise, there would not be that same incentive, and while it's legal to enter into such an agreement, I personally don't, because I don't think that it would be ethical.

ScottyMacESQ :

And most of the time it's costs get deducted first, and then the remaining amount gets apportioned between the attonrey and the client.

ScottyMacESQ :

*attorney

Customer:

I think that's the way this is. Cost are dedcucted before the 1/3 is calculated. But if there is no award, I pay everything. Is this typical?

ScottyMacESQ :

No, it's not typical, although it's not unheard of. Like I said before, such a deviation from the "norm" (client pays nothing if there's no recovery) can be based on the strength (or weakness) of a case, etc...

Customer:

and finally, if attorney fees awarded happen to exceed the 1/3, then the lawyer can elect to take those fees instead. What about this?

ScottyMacESQ :

That is common (and in most, if not all, of the contingency fee agreements that I've seen).

ScottyMacESQ :

An attorney fee award is to compensate for the attorney... For instance, if you get a small award (lets say $100,000) but there's $50,000 attorney's fees, then that could be such a situation. You get the full $100,000 (minus costs) and the attorney gets the higher payout.

ScottyMacESQ :

That is common, although I have seen situations where the attorney fee award is included in the total amount, subject to the distribution.

Customer:

how would you suggest I find an attorney to get a second opinion in eastern Michigan in the area of oil and Gas litigation. I am in arizona and am not usre how to shop for this type of service?

Customer:

And thank you.

ScottyMacESQ :

I would suggest using an online service such as www.superlawyers.com, looking in the area (or nearest big city) for such a lawyer.

ScottyMacESQ :

That is a great place to find very competent attorneys (as rated by former clients and other attorneys)

Customer:

ok. I appreciate your prompt answers...take care.

ScottyMacESQ :

My pleasure, and you too.If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX good luck to you!

ScottyMacESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 11502
Experience: Licensed General Practice Attorney, Texas
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