Wednesday, May 5, 2010

Just Because You Won Your Case Doesn't Mean It's Over

A certain 60 year old woman has been paying her attorney every month for legal fees accrued four years ago. The fee takes a huge percentage of the $101 monthly disability settlement she was awarded by the state compensation fund office. In the same state, a disabled miner who won his case has been paying his lawyer a fee each month for the last ten years. Of the $134 the miner gets each month, the lawyer takes a large share.

These aren't the only cases like them that illustrate the detriment of legal fees. The disabled woman's husband is bedridden with Cancer, and they receive welfare benefits. The difficulty with legal fees is not limited to poor people. Those in the middle class are greatly affected, as well.

One book about lawyers states that the American middle class is the hardest hit by lawyers fees because they not only have the money, they also have no power when it comes to state legislatures. Analyzing the situation would be interesting because, also according to the author, the middle class spawns the majority of our new lawyers.

Typically, lawyers charge an hourly fee for their services. According to lawyers, plumbers and doctors get paid for their work, so why shouldn't they? However, workmen's compensation awards are typically lifetime payments, so is it fair for attorneys to take a part of that payment every month as legal services? Divorces, will probates, and real estate investment can result in lifelong payments to lawyers.

Then there are attorneys who steal the very money that they are supposed to be managing for widows and orphans. In other cases, rather than steal the money, they will charge ridiculous fees to the client. One partnership charged legal fees over a five year period of up to approximately 60 per cent of one six figure estate. The victim was a man whom the court rule unable to manage his own affairs due to incompetency. This matter had a happy ending, with the partners being ordered to repay the moneys taken from the estate. Another lawyer, who was a bit unusual, brought the case against the original lawyers. Where others refused to accept a case against other attorneys, he gladly took on the battle.

News stations and newspapers do not help the legal fee problem, and actually almost encourage the shady dealings by behaving as if the court system is not a news source. The information on fees paid to attorneys and guardians is generally available for inspection in the court's files, but the media ignore this information because it does not seem newsworthy to them. The bar associations also do not discourage these types of practices within the field. They are constantly defending the relationship between the client and the lawyer, stating there shouldn't be any interference between the two. They do not hesitate to slap down any negative attitude toward the legal profession, should it be called out in the media.

Though attorneys usually charge an hourly rate, some lawyers will only take a payment in the form of a percentage of your future winnings. Whenever there are minimum fee agreements imposed, the bar association supports the attorney's stance on the matter. These contingency fee agreements state that the attorney can take a percentage of the money awarded if the case is successful. Most personal injury suits give the lawyer twenty-five to fifty percent of the winnings.

The contingency fee was created in the United States, just like the game of poker was. England and most of Europe do not accept this kind of arrangement, and will not allow an attorney to work on a case if their fee is based on the outcome. In 1848 many workers needed help getting money for their on-the-job injuries, and that is how contingency fee arrangements were started. Contingency fees allowed workers, who had no cash, to file a civil suit.

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by James Boswell


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