More on Reverse Contingent Fees

By January 6, 2008March 8th, 2019Appellate Practice

In this post from last summer, I mentioned reverse contingent fees as a potential means of compensating appellate counsel.  Spurred by a question I asked in response to one of his recent posts, Blawgletter (a/k/a Susman Godfrey’s Barry Barnett) expounded on how his firm approaches reverse contingent fees in business litigation matters.  The methodology would depend on the case, its procedural posture, and the client’s financial well being/creditworthiness, but the basic idea is to assign a dollar value to the client’s exposure and base the fee on the "savings" obtained by the result.  With reports of $1,000 hourly rates and in-house counsel under increasing pressure to rein in outside lawyer fees, we may see more of this approach in the future, especially from solos and small firms who have the flexibility to implement it.

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  • Anonymous says:

    […] What’s a reverse contingency fee? Unlike a regular contingency fee (which is based on how much the lawyer recovers), a reverse contingency fee is based on how much the lawyer saves the client-for example, if a $10 million judgment is reduced to $2 million, the lawyer’s contingency fee would apply to the $8 million reduction. For that reason, the reverse contingency is not uncommon among appellate lawyers. The principle has also been approved by the ABA ethics committee. Can a lawyer convert a regular contingency fee agreement into a reverse contingency fee? It’s possible to convert a regular fee agreement to a reverse contingency agreement but it’s a lot trickier to claim that a regular contingency agreements should be converted to a reverse … especially when the client denies ever hearing about the arrangement. Oops. […]