How Florida Attorney contingency fee structures affect Consumers
Recently, we received the following question from a reader of our Whistleblower Law Blog in response to a post on Shedding the Light on Attorney Contingency Fees.
“What limit do you suggest on contingency fees - versus none? Unfortunately, except in certain prof liab and other law, we are hearing of contingencies of up to 65% and 70% in certain jurisdictions.”
First, I must say, this was a thoughtful question. Here is my belief on the appropriate cap on attorney fees. I am writing my response on our LaBovick Injury Law Blog, because I believe this will interest our readers.
In Florida, contingency injury cases are capped by the Florida Bar. To exceed the cap the attorney must obtain special permission from the judge assigned to the case. It is my inherent belief that market forces do a better job lowering injury case contingency fees then a Florida Bar fee cap. (I must add that I am a Republican.) There are a huge number of personal injury lawyers in every community in the country. Under typical market circumstances, the sheer number of attorneys competing for injury cases would drive fees down. The Florida Bar instituting a fee cap effectively created an informal "State Assigned" minimum fee. This is a good marketing trick for injury lawyers because the consumer believes the Florida Bar has regulated the minimum fee for injury cases. There are so few lawyers who advertise lower contingency fees then the Florida Bar contract that they are irrelevant. However, both attorneys and consumers perceive lower fees from the small number of practitioners as low quality legal work. In reality the Florida Bar, fee cap has created a situation where the cap is actually a minimum fee and some attorneys actually go to court and ask the Judge for permission to charge more, not less.
If there was no Florida Bar fee the market would, over time, take effect. Better lawyers would charge more and less qualified or less experienced or "mill" business models would charge less. The consumer could investigate and choose the attorney they wanted. The consumer's investigation into fees vs. reputation would create competition between attorneys, even those with good reputations, and would force them to charged less to compete in the market. That was the long answer to your question: I do not believe there should be any "cap" on fees because it creates an artificially high fee for the consumer.
Brian
