A Matter Of Percentages

The Indiana Supreme Court has publicly reprimanded an attorney for collecting an unreasonable fee

“Client” signed a representation agreement with “Law Firm” in a personal injury matter. The agreement called for a contingent attorney fee of 35% if the case was resolved without trial and 45% plus expenses if the case was resolved with trial. The agreement also included a provision under which Law Firm, in the event it was discharged by Client prior to an eventual settlement or recovery, would be entitled to a fee of $175/hr for work performed on the case.

Respondent was an associate with Law Firm from June 2015 until February 2017 and represented Client during that time. When Respondent departed Law Firm and began working with a new firm, Client elected to have Respondent complete his case. Respondent informed Client her representation and fees would be governed by identical terms as his agreement with Law Firm and that any fees owed to Law Firm would be deducted from any settlement award or judgment obtained in Client’s case. However, Respondent failed to explicitly contract away her liability for attorney fees owed to Law Firm.

In September 2017, an $18,000 mediated settlement of Client’s case was reached. Respondent kept 35% ($6,300) as her fee and then negotiated a $2,000 settlement with Law Firm for its fee. This resulted in Client being charged a total attorney fee of 46% of the settlement amount instead of the contracted amount of 35%. Respondent has no prior discipline, cooperated with the disciplinary process, and refunded the $2,000 owed to Client.

(Mike Frisch)