‘Reverse’ Contingent Fees Are Allowed in DC

The District of Columbia bar's ethics committee issued an opinion this month that concludes that attorneys may charge a reverse contingent fee, based on how much the lawyer saves the client from having to pay a claimant, so long as the total amount is reasonable and counsel makes sure the client fully understands the risks and advantages before consenting to the arrangement. A majority of the committee said that although it is best for the lawyer to put in writing exactly how the sums and percentages will be computed when establishing the fee amount, a detailed written analysis is not mandated under the professional conduct rules. Three dissenting members disagreed, arguing that unsophisticated clients—and impartial reviewers seeking to settle subsequent fee disputes—need a written statement disclosing how the figures were calculated in order to discern whether the amount is reasonable. The opinion is available here.