Legal Question in Business Law in Pennsylvania

Compensation Agreement

We have been presented with a compensation agreement from a law firm offering to represent us in a situation where a medication has caused harm. The compensation agreement contains language that states that the law firm will receive 40% by way of settlement or verdict, plus reimbursement of costs. HOWEVER, in the event that they no longer wish to represent us, for any reason, they will be entitled to 45% of the amount received. As a layman, I must assume that in the event that they withdraw representation, we'll need new counsel, which will require a new (similar) compensation agreement. So if we lose, we lose, and if we win, we lose. Any feedback would be greatly appreciated.


Asked on 9/30/05, 9:34 pm

1 Answer from Attorneys

Re: Compensation Agreement

Getting paid more for dumping you as a client than for completing the representation? Never heard of it before. If they dump you, I can't see them deserving a fee, although a refund of costs advanced is a different matter.

If it was you, however, deciding to switch firms at some point along the way, they typically would be entitled to a portion of any contingent fee based on how much work they put into the case (quantum meruit). Thus, if they worked 90 hours on a case and you switched firms near the end and your new counsel worked only 10 hours to resolve the case, the old firm would have an argument that they would be entitled to 90% of the fee.

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Answered on 10/01/05, 1:45 pm


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