If you’re a plaintiff in a mass tort case like those involving pelvic and hernia mesh or talcum powder, chances are you’ve signed up with a law firm. Signing up with a law firm means signing a retainer agreement or a “fee agreement,” as they are sometimes called.
Retainer agreements spell out the law firm’s obligations to you and the fees and costs that you will incur as part of having that firm represent you. But signing on the dotted line doesn’t mean that clients actually understand what they're agreeing to—nor does it signal that the agreement itself is reasonable.
Fee agreements aren’t secret or confidential, but they are hard to find. I’ve unearthed a few agreements that are publicly available via court filings. Here are the top 5 eyebrow-raising provisions I found in those retainer agreements--all from the mesh litigation:
1. Contingent fee amount.
Ethical rules in most states require lawyers to charge only “reasonable fees,” and some states, like New York, limit the percentage that attorneys can charge to one-third, or 33.3%. The provision below charges the client a whopping 40% even if the lawyer never files a lawsuit and 45% thereafter.
2. Common-benefit fees.
In mass torts, judges often appoint “lead lawyers.” These attorneys are supposed to work on behalf of not just their own clients, but all of the plaintiffs in the proceeding. To pay them, judges withhold a portion of a plaintiff's settlement proceeds. The withheld percentage can range from 3-15%. Common-benefit fees should be deducted from the individual plaintiffs’ attorney's contingency fee (the 33.3%)--NOT heaped on TOP of that contingency fee as in the provision below. Plaintiffs whose cases are litigated in a multidistrict proceeding should be no worse off for having the judge appoint lead lawyers. So, a plaintiff who agrees to a 33.3% contingency, still pays 33.3%, it just means that her lawyer must share a portion of that 33.3% with the lead lawyers.
But in the excerpt below, the client had to pay a 45% contingent fee plus Judge Goodwin’s 5% court-ordered fee because of the retainer agreement, resulting in an eye-popping 50% contingent fee. This is fundamentally wrong and cuts against every theory of common-benefit fees that I’ve encountered.
3. Charging Interest on Expenses.
Law firms pay a lot of money to develop a client’s case. They hire pricey experts to prove causation and they front more mundane expenses like civil filing fees and copying costs. But charging clients interest on those expenses like in the clause below is troubling. It means that the longer a case lingers in court (via a protracted MDL, for example), the more a client must pay for costs.
4. Withdrawing from the Attorney-Client Relationship.
States’ ethics rules dictate when a lawyer can “fire” a client, or withdraw from the representation. Model Rule of Professional Conduct 1.16(b) allows a lawyer to withdraw for no reason at all only if doing so will have no material adverse effect on the client’s interest. Clauses like the one below, which allow counsel to withdraw at any time, attempt to circumvent the protections afforded by the ethics rules.
5. Arbitration Provisions.
For years, plaintiffs’ attorneys have lambasted arbitration provisions—and rightly so. Arbitration provisions allow those with the upper hand in contract bargaining to send a dispute to arbitration and some even allow that party to pick the arbitrator (the person who decides the case, in other words). So, imagine my surprise when I found that plaintiffs’ attorneys are taking advantage of arbitration provisions and waiving plaintiffs’ rights to sue them collectively when it suits them.
What can you do?
I’m in the process of creating a database of retainer agreements and writing an article to bring overreaching provisions to judges' attention, but I need your help. Would you send me a copy of your retainer agreement? I will take out your name and all of your identifying information (or you may do so before sending me the contract). I need to see how common these provisions are and I would like to post redacted retainer agreements as a resource for those who are shopping for representation. My email address is: firstname.lastname@example.org
I am also conducting a study on all multidistrict proceedings in which the defendant targeted or advertised its product or medical device to women. The project asks plaintiffs involved in these cases, which include pelvic mesh and talcum powder, to confidentially share their litigation experiences. If you fall into this category, I’d be grateful if you’d take a few minutes to fill out the survey.
Finally, I have a book coming out this June (Mass Tort Deals: Backroom Bargaining in Multidistrict Litigation) that includes data on all the product liability proceedings pending on the MDL docket as of May of 2013. You can read more about it here; it may be of interest to anyone who is a plaintiff in a mass tort case.