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Hi, this is Stewart Alberton with Albertson & Davidson and we’ve been discussing contingency fee agreements and the benefits, the advantages and disadvantages to entering into a contingency fee agreement.  And I want to talk to you about one more benefit on the contingency fee agreement is the costs that your attorney agrees to pay while the case is going forward.

Now, most costs are not significant.  They’re real money, but they’re not significant, such as the filing fees, fees to get a court reporter to do a deposition, subpoena fees.  We’re talking ten, twenty, thirty thousand dollars in the life of a case.  Maybe more, if it’s a bigger case, but it’s not going to be too much more than that.

But there is one set of costs that go really high, really fast in a trust and will case where lack of capacity or undue influence is an essential issue.  And that has to do with hiring an expert.  An expert in this case would be either a neurologist or a psychiatrist.  Somebody that specializes in forensically going back and looking at medical records to determine if a decedent was, either they did lack capacity or where they subject to the exercise of undue influence.

These experts are very good people and so we’re not upset at them for how much they have to bill us, but we do want to point out that it is quite expensive to hire them.  In many cases, it will be ten to fifteen thousand dollars just to hire them, and then, because they have so much education and experience, and it’s such a specialized area, they charge generally anywhere between four hundred and a thousand dollars an hour.  And that time is spent reviewing medical records, coming to determine opinions.  If a decedent did in fact lack capacity at the time a trust or will was created, or if the decedent was subject to the exercise of undue influence.

Sometimes you have to have more than one of these experts in a case.  So let’s say that you hire a lawyer on a contingency fee agreement.  Any trust and will contest where you have to hire one of these experts, and that expert bills out at say $40,000 for the life of the case.  If you lose that case at the time of trial, which is a bad result for everyone and nobody hopes we lose, but if you do lose that case at the time of trial, the lawyer is the one that is stuck with the $40,000 bill.  Not you, the client.  So that’s just one more benefit of contingency fee agreements.

THE FOLLOWING IS A TRANSCRIPT OF THIS VIDEO. FOR MORE INFORMATION, CLICK HERE

Hi, this is Stewart Albertson with Albertson & Davidson.  I want to talk to you about contingency fees, and how they can give access to some beneficiaries who don’t have the ability to pay lawyers on an hourly basis.  The traditional way that many people hire lawyers is they give that lawyer a retainer (for example, $10,000-$20,000 retainers are common), and then the lawyer bills against that retainer, according to their hourly rate. When that retainer runs out, the lawyer asks for more money.

However, beneficiaries are not in a position where they can pay lawyers to represent them in a trust contest or a will contest case. So, there is an option for contingency fee.  Now, keep in mind, you generally do better overall to hire a layer on an hourly basis, if you can, because you’ll spend less overall on a case than you will if there’s a successful outcome in a contingency fee case, as far as attorney’s fees go.

Let’s give an example.  You hire a lawyer to handle a case for you.  You’ve got a million dollars at stake and you pay that lawyer $100,000 in hourly fees to get you your access to that million dollars.  Well, that’s a pretty good result for you. You paid $100,000 in hourly fees to that lawyer and you end up getting the million dollars that was supposed to come to you.

If you didn’t have the money to pay the lawyer on an hourly basis, you could hire that same lawyer on a contingency fee basis, which is a percent of the recovery.  Generally speaking, most cases are going to be 40% in California.  So, using the same example, a lawyer works the case for a year and a half or two years, and just before trial, the case settles and it’s a million-dollar recovery to you.  If you apply the math at 40%, that would be a $400,000 attorney’s fee and the balance would go to you.  You can see the difference.

It generally makes sense to hire a lawyer on an hourly basis, versus a contingency fee basis, but if you don’t have the ability to hire a lawyer on an hourly basis, then the best option for you to do is to consider the contingency fee, which is a way to recover something for you that you normally couldn’t get access to if you didn’t have a lawyer willing to take your case on a contingency fee basis.  So that’s just a little bit on how a contingency can work to return assets to you that are rightfully yours.