The Great Change: Turning Cathy into a Lawyer

Contingency fees tend to be complicated arangements and the amount of the fee often shocks clients upon settlements. Without a written agreement, it would be terribly hard to figure out what the arrangement really was.

Hourly fees, on the other hand, are less likely to be misunderstood. Folks know what to expect when they are paying for a service by the hour.

In my experience, clients tend to be turned off by formal attorney agreements for small matters. They feel like they need another attorney to read the small print. Furthermore, the time the attorney needs to take to prepare the agreement and explain it to the client can become substantial relative to the amount of time dedicated to the service being provided under the agreement. Thus, for a matter that's likely to just take a few hours, a simple oral (or e-mail) agreement works well for everyone.

I think that California law handles this issue correctly. It requires that essentially all attorney agreements be in writing, but makes an exception for engagements that arn't expected to yield more than a thousand dollars in fees.

The Statute of Frauds also requires any agreement to be in writing if it may take more than a year to perform. That would cover most contingency fees, since there is always the possibility of going to trial, in which case it's very likely the suit will drag on for months.
However, the SoF allows anys kind of recording or memoranda, such as notes penciled into a calendar, to be used as evidence of the agreement. In contrast, the ABA model rules require "a writing signed by the client" with specific details about how the contingent fee is to be calculated, and so forth.
Rule 1.5(c)
So it's clear that the ABA rules go beyond the requirements of the statute of frauds and are intended for the purpose of consumer protection.

Darn it, the thing I dislike about blogs is that only the blog owner can edit their comments. Now I have to look like an idiot for not remembering until five minutes too late that the SoF one-year test applies only if a contract *expressly by its terms* will *necessarily* take more than a year to complete. That rules out just about all contingency fees.
I'm not sure where you see SoF applicability from a property transfer. The SoF applies to *real* property, or to promises to assume another's debt, or sale of goods (not services) worth more than $500. OK, assume the contingent interest is property worth at least $500. Is the client *selling* it to the attorney??

Maybe there are a few dynamics at play. Since there needs to be some writing requirement for contingency fees, it was easier to require more formalism. But without that impetus it was easier for the ABA to avoid the writing requirement entirely.

We can add to the list of blog aggravations cross-posting comments... (sorry, I didn't see your last one until after I posted.)

(BTW, I don't generally edit my comments because it isn't fair to the commenters who can't. My current policy on this.)

The reason I thought of the SoF was because if there ends up being an award, the attorney (I surmise) will not so much be in the position of saying, "Here's my bill, please pay me" but may have a more direct claim on the award itself.

Of course, the problem with this theory is that I don't really know the mechanics of contingency fee collection. But even if the claim for fees functions more in a traditional fee-for-services contract sense ("here's my bill, please pay me"), because the client doesn't get to walk off with the whole award, that's when I got to thinking about how the arrangement may seem to involve the transfer of a property interest.

I don't know the mechanics of payment either, though I can't imagine how the lawyer has a claim "against the settlement" independent of his contract with his client.
I'm also not sure whether a contingency agreement necessarily creates a property interest in the settlement. (Perhaps a good lawyer can draft the agreement in such a way that it does.) But even assuming the lawyer's interest constitutes property, the SoF doesn't apply unless this property is
a) real property (ie, land) [we can dismiss this theory] , or
b) goods being sold. Neither "goods" nor "sold" seems a very apt description.

Goldurn it! Took me too long to process the fact that your comment about "cross postings" actually had relevance to whether we still disagreed about the SoF. You hadn't seen my conclusion about the SoF not applying when you advanced your idea about SoF being a partial impetus, but you had done so before you posted your explanation of how you came to ruminate about the SoF. I read your last comment in light of your partial-impetus post, and thought you were still attempting to suport it.

Well it was just a thought I wanted to kick around. Thanks for kicking it with me :-)

(Hopefully the the commenting experience hasn't been TOO traumatic...)