J-Law 57 — Transparent Contingency Contracts

All contingency contracts must state expected litigation costs and the attorney's share, giving the client a clear estimate of net compensation. Costs beyond the agreed percentage must come from the attorney's share.

A person signing a contingency agreement typically knows one number: the attorney's percentage. The costs that will be deducted on top of it — experts, filing fees, depositions, exhibits, the full carrying cost of the case — remain unestimated and open-ended, and clients discover at settlement that "one-third" somehow became half or more of the recovery. Signing a major financial contract without a good-faith estimate of the bottom line is something the law forbids in nearly every other industry.

Mortgage lenders must disclose total loan costs before closing. Contractors provide estimates and eat many of their own overruns. Contingency clients deserve the identical courtesy: expected costs stated up front, net recovery honestly estimated, and overruns beyond the agreed percentage absorbed by the professional who controls the spending. That last provision aligns incentives precisely — the attorney deciding whether an expense is necessary should be the one who pays for excess.

The expected counterargument: litigation costs are inherently unpredictable, and forcing attorneys to absorb overruns will make them refuse risky, expensive cases that injured people need brought. Unpredictability is a shared feature of every industry already living under estimate-and-absorb rules — construction, insurance, and fixed-fee professional work all price uncertainty into their terms, and the professionals doing it are less experienced at forecasting than a firm that has litigated hundreds of similar cases. Case-selection warnings deserve translation: the cases attorneys would decline under this rule are those whose costs the attorney privately expects to consume the client's recovery, and those are exactly the cases a client deserves to understand before signing years of their life away. Honest numbers may kill some engagements, and every engagement they kill is one that was viable only while the client stayed ignorant of its economics. Informed consent is the standard everywhere else a professional takes control of someone's future. The profession that drafted informed-consent law can live under it.