Blended Fee Agreements Sometimes Work
On May 19, 2009, the Milwaukee Journal-Sentinel ran an article discussing the $765,000 cost of a lawsuit brought by five local school districts seeking the return of $200 million in investments made in 2006.
The Houston law firm involved is charging $325 per hour. Milwaukee firms involved in highly specialized litigation generally charge, on purely hourly basis, this much or more. What’s interesting here is that the school districts’ payment arrangement also includes a contingent-fee component, providing for additional legal fees ranging from 5% of any recovery below $50 million and up to 15% of the total recovery if the case gets to trial.
These kinds of blended-fee arrangements are becoming more common, particularly in high-dollar cases. Agreements like this can be useful, guaranteeing the law firm some sort of payment for its work, but also saving the client from paying the full price of hiring specialized litigation counsel unless there’s some measure of success.
