# Lawyers: What is ethical when working on contingency? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 3, 2019, 10:49pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226 "2019-10-03T22:49:19Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 3, 2019, 10:49pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/1 "2019-10-03T22:49:19Z")
Hypothetical: A law firm accepts a plaintiff’s civil suit on contingency. They will keep 33% of the award, if there is one; nothing if there is not. Halfway through the case, the defendant presents evidence that was unexpected by both the plaintiff and the lawyers, and the plaintiff’s case takes a turn for the worse. The firm determines that the risk/reward tradeoff is no longer in the firm’s favor. That is, based on the cost to the firm to pursue the case, and the probability of winning, the expected value of the outcome is negative. The plaintiff figures that the law firm signed up for this and they have to stick with it, and the plaintiff has nothing to lose except his time by pursuing it to the bitter end. Is it ethical for the firm to discourage the plaintiff from pursuing the case? That would be the firm putting its own interests ahead of its client. ---
**Author:** ![steepone](https://avatars.discourse-cdn.com/v4/letter/s/977dab/32.png) [@steepone](https://boards.straightdope.com/u/steepone)\ **Post date:** [October 4, 2019, 1:25am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/2 "2019-10-04T01:25:02Z")
IANAL but I think in those circumstances it would be totally ethical for the plaintiffs lawyers to discourage him from persuing the case, I think it would be unethical for them not to, not just to protect their own interests but to protect his as well it is incorrect to say the plaintiff has nothing to lose, even though his lawyers are working on contingency if he loses the suit the defendant’s legal costs may be awarded against him ---
**Author:** ![TokyoBayer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tokyobayer/32/13989_2.png) [@TokyoBayer](https://boards.straightdope.com/u/TokyoBayer)\ **Post date:** [October 4, 2019, 11:28pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/3 "2019-10-04T23:28:46Z")
IANAL, but I wouldn’t be surprised if they have the ability to walk away written into the agreement. ---
**Author:** ![Smapti](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smapti/32/17938_2.png) [@Smapti](https://boards.straightdope.com/u/Smapti)\ **Post date:** [October 4, 2019, 11:39pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/4 "2019-10-04T23:39:44Z")
Works on contingency? No! Money down! ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 5, 2019, 2:42am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/5 "2019-10-05T02:42:30Z")
> [@Smapti](#): > > Works on contingency? No! Money down! Punctuation matters. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 5, 2019, 2:44am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/6 "2019-10-05T02:44:17Z")
> [@steepone](#): > > IANAL but I think in those circumstances it would be totally ethical for the plaintiffs lawyers to discourage him from persuing the case, I think it would be unethical for them not to, not just to protect their own interests but to protect his as well > > it is incorrect to say the plaintiff has nothing to lose, even though his lawyers are working on contingency if he loses the suit the defendant’s legal costs may be awarded against him Suppose the plaintiff has a different estimation of the likely outcome. The plaintiff may be wrong, but he is their client. If he doesn’t take their advice to drop the case or attempt to settle, it is ethical–or even legal–for them to just walk? ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [October 5, 2019, 3:18am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/7 "2019-10-05T03:18:13Z")
What do you mean by “halfway through the case?” Are the lawyers Just sending letters to each other? Have depositions been taken? Has a trial date been set but not begun? Has the trial already started? IMHO, unless the time to trial is so close that the plaintiff can’t reasonably expect to get a delay to find another lawyer, the lawyer has every right to advise the plaintiff to get another lawyer. It certainly happens often enough in criminal cases. For that matter, let me turn the question around. Suppose the plaintiff starts out with what appears to be a relatively straightforward worker injury case, and retains one of those lawyers who advertises on daytime TV. The company being sued decides to throw mega resources at fighting the case, and it becomes clear the plaintiff’s lawyer is being overwhelmed. Is it unethical for the plaintiff to say, “I think you’re in over your head here, and I’d like another lawyer”? (Yes, I know the lawyer could receive a referral fee for handing the case over to a bigger law firm, but they’d still miss out on the potential big payday a jury verdict could bring.) ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [October 5, 2019, 3:29am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/8 "2019-10-05T03:29:31Z")
Generally a lawyer can elect to leave a client unless doing so would cause undue hardship. If they’re making the decision the night before the start of or in the middle of the actual trial, the judge will probably force them to continue as the plaintiff won’t have time to get another lawyer to take over the case. If it’s not a situation like that, though, the firm can elect to simply withdraw from the case and tell the plaintiff to find another lawyer to represent them. They would not be able to charge for any work that would have been paid for by the contingency, so they’re writing off a (probably significant) amount of money, but they don’t have an open ended obligation to sink more and more resources they won’t recoup into a case they can’t win, and it would be unethical for them to give up on winning the case but keep showing up to technically still be representing the plaintiff. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 5, 2019, 12:18pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/9 "2019-10-05T12:18:07Z")
> [@Kent\_Clark](#): > > What do you mean by “halfway through the case?” Sorry for the lack of precision; halfway through the _trial_. > [@](#): > > Is it unethical for the plaintiff to say, “I think you’re in over your head here, and I’d like another lawyer”? Is there a code of ethics and an ethics board to which clients are accountable? ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [October 5, 2019, 3:36pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/10 "2019-10-05T15:36:44Z")
Halfway through _trial_ the lawyer can’t walk away (with very limited exceptions). The lawyer can certainly strongly urge a settlement for a low amount if that’s the best that can be negotiated. It’s worth noting that “evidence completely unexpected” would mean it wasn’t disclosed in discovery and would in most cases be inadmissible at trial. Civil trials usually don’t have significant surprises. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [October 5, 2019, 4:08pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/11 "2019-10-05T16:08:39Z")
> [@Pantastic](#): > > If it’s not a situation like that, though, the firm can elect to simply withdraw from the case and tell the plaintiff to find another lawyer to represent them. They would not be able to charge for any work that would have been paid for by the contingency, so they’re writing off a (probably significant) amount of money, The first firm can’t charge, but they still have a contingency claim for the work they’ve already done, which would be recognised in the transfer to the second firm. If the second firm does actually win the case, the first firm would have a pro rata claim for the work they did on the file. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [October 5, 2019, 6:58pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/12 "2019-10-05T18:58:28Z")
> [@Northern\_Piper](#): > > The first firm can’t charge, but they still have a contingency claim for the work they’ve already done, which would be recognised in the transfer to the second firm. If the second firm does actually win the case, the first firm would have a pro rata claim for the work they did on the file. That’s true, but my thought was that if the new development in the case is bad enough that the firm wants to abandon the case and is willing to risk getting nothing, it’s probably bad enough that it means they don’t expect a new firm to be able to take over and win. OTOH the development could be something like ‘Ok, we’ve just discovered that ABC corp was working with XYZ corp on this. While we could represent you against ABC corp, XYZ corp is already a client of ours and it would be a conflict of interest to represent you against them.’ In that case the firm would withdraw from the case, but would also expect that there’s a reasonable chance of the case coming through, and would still be entitled to contingency pay for the work they did. ---
**Author:** ![allyn](https://avatars.discourse-cdn.com/v4/letter/a/ec9cab/32.png) [@allyn](https://boards.straightdope.com/u/allyn)\ **Post date:** [October 5, 2019, 7:24pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/13 "2019-10-05T19:24:02Z")
Kind of relevant: Elizabeth Holmes/Theranos can’t pay her lawyers; lawyers want to quit… > **[Attorneys say disgraced Theranos founder Elizabeth Holmes isn’t paying them](https://www.mercurynews.com/2019/10/03/theranos-disgraced-founder-elizabeth-holmes-cant-pay-lawyers-lawyers-claim/)** > > Lawyers representing disgraced Theranos founder Elizabeth Holmes said she hasn’t paid them for more than a year and probably never will, according to court records. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 5, 2019, 7:41pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/14 "2019-10-05T19:41:38Z")
> [@Procrustus](#): > > […]“evidence completely unexpected” would mean it wasn’t disclosed in discovery and would in most cases be inadmissible at trial. Civil trials usually don’t have significant surprises. I do not understand the rules and process of discovery, so maybe my whole question is built on a house of cards. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 5, 2019, 7:55pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/15 "2019-10-05T19:55:46Z")
> [@CookingWithGas](#): > > I do not understand the rules and process of discovery, so maybe my whole question is built on a house of cards. The point is that generally speaking, by the time a case reaches trial there’s very little chance of “unexpected” evidence. During the discovery process both sides have already exchanged all the relevant evidence. A trial is about presenting evidence to the finder of fact (the jury or the bench), not about the two sides surprising each other with evidence. ---
**Author:** ![steepone](https://avatars.discourse-cdn.com/v4/letter/s/977dab/32.png) [@steepone](https://boards.straightdope.com/u/steepone)\ **Post date:** [October 9, 2019, 3:31am UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/16 "2019-10-09T03:31:43Z")
> [@CookingWithGas](#): > > Suppose the plaintiff has a different estimation of the likely outcome. The plaintiff may be wrong, but he is their client. If he doesn’t take their advice to drop the case or attempt to settle, it is ethical–or even legal–for them to just walk? I Think it would be unethical for the lawyers to just walk away once they had started the suit, though that may depend on just how unwinnable the case has become I think the lawyers would also have an ethical duty not to waste the court’s time which would have to be weighed against their ethical duty to their client I have no idea of the legal side ---
**Author:** ![Gray\_Ghost](https://avatars.discourse-cdn.com/v4/letter/g/c0e974/32.png) [@Gray\_Ghost](https://boards.straightdope.com/u/Gray_Ghost)\ **Post date:** [October 9, 2019, 12:48pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/17 "2019-10-09T12:48:16Z")
The ABA Model Rules of Professional Conduct, which inspire many state Bar Association’s rules for professional conduct, seem like a good place to start in answering this question. Here’s [ABA Model Rule 1.16, Declining or Terminating Representation.](https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_16_declining_or_terminating_representation/) > [@](#): > > Client-Lawyer Relationship > (a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if: > > (1) the representation will result in violation of the rules of professional conduct or other law; > > (2) the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client; or > > (3) the lawyer is discharged. > > (b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if: > > (1) withdrawal can be accomplished without material adverse effect on the interests of the client; > > (2) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent; > > (3) the client has used the lawyer’s services to perpetrate a crime or fraud; > > (4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement; > > (5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled; > > (6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or > > (7) other good cause for withdrawal exists. > > (c) A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. > > (d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law. The short answer appears to be, “Yes”, it’s ethical, provided the tribunal hasn’t told the lawyer they must continue representing the party. And provided the lawyer can comply with the laundry list in (b). In practice, I would think the plaintiff’s counsel would urge settlement. As a bonus, at least for the contingency fee agreements I am aware of, most agreements provide a smaller portion of the recovery to the attorney if there is a settlement instead of a verdict. ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [October 9, 2019, 1:11pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/18 "2019-10-09T13:11:38Z")
> [@Gray\_Ghost](#): > > The ABA Model Rules of Professional Conduct, which inspire many state Bar Association’s rules for professional conduct, seem like a good place to start in answering this question. b7 certainly leaves some latitude, doesn’t it? ---
**Author:** ![Gray\_Ghost](https://avatars.discourse-cdn.com/v4/letter/g/c0e974/32.png) [@Gray\_Ghost](https://boards.straightdope.com/u/Gray_Ghost)\ **Post date:** [October 9, 2019, 1:22pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/19 "2019-10-09T13:22:17Z")
> [@CookingWithGas](#): > > b7 certainly leaves some latitude, doesn’t it? Yep. Albeit, I doubt it is terribly difficult for a client of a plaintiff’s lawyer to demonstrate material adverse effect on their interests: their new attorney has to receive the old files, probably re-do a lot of the investigation, hire their own experts perhaps, and otherwise materially delay the case. And if the new attorney sees the piece of information that scared the old attorney away, they may not want the case. It could easily be that _no_ attorney will take the case, which sounds like materially adversely affecting the client to me. I have no information on this, but it also sounds like a great way for the old attorney to get sued. Properly managing client expectations, along with thorough constant communication, goes a long way towards preventing this. Further, and I would have to dig out the Texas rules to confirm, many state’s ethical guidelines are tighter than the Model Rules. But yeah, that “or” combined with (7) leaves a lot of wiggle room. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 9, 2019, 5:22pm UTC](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226/20 "2019-10-09T17:22:00Z")
> [@Gray\_Ghost](#): > > In practice, I would think the plaintiff’s counsel would urge settlement. As a bonus, at least for the contingency fee agreements I am aware of, most agreements provide a smaller portion of the recovery to the attorney if there is a settlement instead of a verdict. That would be unusual in the contingency context. Typically, contingency fees are structured without reference to whether there is a settlement. For example, in Florida the bar rules allow a lawyer toclaim a fee of up to one-third of the recovery if the case is presuit, or up to 40% once a complaint is filed. It doesn’t matter whether there is a _trial_ or not. [Next page](https://boards.straightdope.com/t/lawyers-what-is-ethical-when-working-on-contingency/841226.md?page=2)