Contingency Fee Rules for New York Personal Injury Lawsuits and Albany Personal Injury Attorneys

New York Rules of Professional Conduct Related to contingency Fee Amounts:


RULE 1.5: 
(a) A lawyer shall not make an agreement for, charge, or collect an excessive or illegal fee or expense.  A fee is excessive  when, after a review of the facts, a reasonable lawyer would be left with a definite and firm conviction that the fee is excessive.  The factors to be considered in determining whether a fee is excessive may include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent or  made known to the client, that the acceptance of the particular employment  will preclude other employment by the lawyer; 
(3) the fee customarily charged in the locality for similar legal services; 
(4) the amount involved and the results obtained; 
(5) the time limitations imposed by the client or by circumstances; 
(6) the nature and length of the professional relationship with the client; 
(7) the experience, reputation and ability of the lawyer or lawyers performing the services; and 
(8) whether the fee is fixed or contingent.
(b) A lawyer shall communicate to a client the scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible.  This information shall be communicated to the client before or within a reasonable time after commencement of the representation and shall be in writing where required by statute or court rule.  This provision shall not apply when the lawyer will charge a regularly represented client on the same basis or rate  and perform services that are of the same general kind as previously rendered to and paid for by the client.  Any changes in the scope of the representation or the basis or rate of the fee or expenses shall also be communicated to the client. 
(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law.  Promptly after a lawyer has been employed in a contingent fee matter, the lawyer shall provide the client with a writing stating the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or, if not prohibited by statute or court rule, after the contingent fee is calculated.  The writing must clearly notify the client of any expenses for which the client will be liable regardless of whether the client is the prevailing party.  Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a writing stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. 
(d) A lawyer shall not enter into an arrangement for, charge or collect:
(1) a contingent fee for representing a defendant in a criminal matter;
(2) a fee prohibited by law or rule of court;
(3) a fee based on fraudulent billing;
(4) a nonrefundable retainer fee; provided that a lawyer may enter into a retainer agreement with a client containing a reasonable minimum fee clause if it defines in plain language and sets forth the circumstances under which such fee may be incurred and how it will be calculated; or
(5) any fee in a domestic relations matter if:
(i) the payment or amount of the fee is contingent upon the securing of a divorce or of obtaining child custody or visitation or is in any way determined by reference to the  amount of maintenance, support, equitable distribution, or property settlement;
(ii) a written retainer agreement has not been signed by the lawyer and client setting forth in plain language the nature of the relationship and the details of the fee arrangement; or
(iii) the written retainer agreement includes a security interest, confession of judgment or other lien without prior notice being provided to the client in a signed retainer agreement and approval from a tribunal after notice to the adversary.  A lawyer shall not foreclose on a mortgage placed on the marital residence while the spouse who consents to the mortgage remains the titleholder and the residence remains the spouse’s primary residence. 
(e) In domestic relations matters, a lawyer shall provide a prospective client with a Statement of Client’s Rights and Responsibilities at the initial conference and prior to the signing of a written retainer agreement. 
(f) Where applicable, a lawyer shall resolve fee disputes by arbitration at the election of the client pursuant to a fee arbitration program established by the Chief Administrator of the Courts and approved by the Administrative Board of the Courts. 
(g) A lawyer shall not divide a fee for legal services with another lawyer who is not associated in the same law firm unless: 
(1) the division is in proportion to the services performed by each lawyer or, by a writing given to the client, each lawyer assumes joint responsibility for the representation;
(2) the client agrees to employment  of the other lawyer after a full disclosure that a division of fees will be made, including the share each lawyer will receive, and the client’s agreement is confirmed in writing; and
(3) the total fee is not excessive.
(h) Rule 1.5(g) does not prohibit payment to a lawyer formerly associated in a law firm pursuant to a separation or retirement agreement.  
[1] Paragraph (a) requires that lawyers not  charge fees that are excessive or illegal under the circumstances.  The factors specified  in paragraphs (a)(1)  through (a)(8) are not exclusive, nor will each factor be relevant in each instance.  The time and labor required for a matter may be affected by the actions of the lawyer’s own client or by those of the opposing party and counsel.  Paragraph (a) also requires that expenses for which the client will be charged must not be excessive or illegal.  A lawyer may seek payment for services performed in-house, such as copying, or for other expenses incurred in-house, such as telephone charges, either by charging an amount to which the  client has agreed in advance  or by charging an amount that reflects the cost incurred by the lawyer, provided in either case that the amount charged is not excessive.
[1A] A billing is fraudulent  if it is knowingly and intentionally based on false or inaccurate information.  Thus, under an hourly billing arrangement, it would be fraudulent to knowingly and intentionally charge a client for more than the actual number of hours spent by the lawyer on the client’s matter; similarly, where the client has agreed to pay the lawyer’s cost of in-house services, such as for photocopying  or telephone calls, it would be fraudulent knowingly and intentionally to charge a client more than the actual costs incurred.  Fraudulent billing requires an element of scienter and does not include inaccurate billing due to an innocent mistake.
[1B] A supervising lawyer who submits a fraudulent bill for fees or expenses to a client based on submissions by a subordinate lawyer has not automatically violated this Rule. In this situation, whether the lawyer is responsible for a violation must be determined by reference to Rules 5.1, 5.2 and 5.3.  As noted in Comment [8] to Rule 5.1, nothing in that Rule alters the personal duty of each lawyer in a firm to abide by these Rules and in some situations, other Rules may impose upon a supervising lawyer a duty to ensure that the books and records of a firm are accurate.  See Rule 1.15(j).
Basis or Rate of Fee
[2] When the lawyer has regularly represented a client, they ordinarily will have evolved an understanding concerning the basis or rate of the fee and the expenses for which the client will be responsible.  In a new client-lawyer relationship, however, an understanding as to fees and expenses must be promptly established.  Court rules regarding engagement letters require that such an understanding be memorialized in writing in certain cases.   See  22 N.Y.C.R.R. Part 1215.  Even where not required, it is desirable to furnish the client with at least a simple memorandum or copy of the lawyer’s  customary fee arrangements that states the general nature of the legal services to be provided, the basis, rate or total amount of the fee, and whether and to what extent the client will  be responsible for any  costs, expenses or disbursements in the course of the representation.  A written statement concerning the terms of the engagement reduces the possibility of misunderstanding.
[3] Contingent fees, like any other fees, are subject to the excessiveness standard of paragraph (a).  In determining whether a particular contingent fee is excessive, or whether it is excessive to charge any form of contingent fee, a lawyer must consider the factors that are relevant under the circumstances.  Applicable law may impose limitations on contingent fees, such as a ceiling on the percentage allowable, or may regulate the type or amount of the fee that may be charged. 
Terms of Payment
[4] A lawyer may require advance payment of a fee, but is obliged to return any unearned portion.   See Rule 1.16(e).  A lawyer may charge  a minimum fee, if that fee is not excessive, and if the wording of the minimum fee clause of the retainer agreement meets the requirements of paragraph (d)(4).  A lawyer may accept property in payment for services, such as an ownership interest in an enterprise,  providing this does not involve acquisition of a proprietary interest in the cause of action or subject matter of the litigation contrary to Rule 1.8(i).  A fee paid in property instead of money may, however, be subject to the requirements of Rule 1.8(a), because such fees often have the essential qualities of a business transaction with the client.
[5] An agreement may not be made if its terms might induce the lawyer improperly to curtail services for the client or perform them in a way contrary to the client’s interest.  For example, a lawyer should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client. Otherwise, the client might have to bargain for further assistance in the midst of a proceeding or transaction. In matters in litigation, the court’s approval for the lawyer’s withdrawal may be required.  See Rule 1.16(d). It is proper, however, to define the extent of services in light of the client’s ability to pay.  A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures.
[5A] The New York Court Rules require every lawyer with an office located in New York to post in that office, in a manner visible to clients of the lawyer, a “Statement of Client’s Rights.”  See 22 N.Y.C.R.R. § 1210.1.  Paragraph (e) requires a lawyer in a domestic relations matter, as defined in Rule 1.0(g), to provide a prospective client with the “Statement of Client’s Rights and Responsibilities,” as further set  forth in 22 N.Y.C.R.R. § 1400.2, at the initial conference and, in any event, prior to the signing of a written retainer agreement. 
Prohibited Contingent Fees
[6] Paragraph (d) prohibits a lawyer from  charging a contingent fee in a domestic relations matter when payment is contingent upon the securing of a divorce or upon the amount of alimony or support or property settlement to be obtained or upon obtaining child custody or visitation.  This provision also precludes a contract for a contingent fee for legal representation in connection with the recovery of post-judgment  balances due under support, alimony or other financial orders.  See  Rule 1.0(g) (defining “domestic relations matter” to include an action to enforce such a judgment).

Special NY Contingency Fee Statutes with Medical Malpractice Cases

For legal cases and claims governed by Chapter 30, Article 15, Section 474-a the following contingency fee schedule cannot be violated:
  • 30 percent of the first $250,000 of the sum recovered;
  • 25 percent of the next $250,000 of the sum recovered;
  • 20 percent of the next $500,000 of the sum recovered;1
  • 5 percent of the next $250,000 of the sum recovered; and
  • 10 percent of any amount over $1,250,000 of the sum recovered.

Contingency fees allow you to win a lawsuit without paying a lawyer ahead of time. Contact an Albany Personal Injury Attorney now!

Serving clients throughout Eastern New York, including Albany, Colonie, Delmar, East Greenbush, Glenmont, Green Island, Hampton Manor, Latham, Loudonville, Menands, Roessleville, Troy, Watervliet, West Sand Lake, Westmere, Wynantskill, areas in the vicinity of Albany International Airport, and other communities in Albany County.