Reviewing an Attorney Fee and Settlement Agreement Before Signing

Attorney Answer

Yes — have it reviewed before you sign, and read three clauses hardest: the fee percentage, whether costs come out before or after the fee, and who decides whether to settle.

Idaho Rule of Professional Conduct 1.5(c) tells you what a contingent fee agreement must contain, and it is a useful checklist precisely because it is mandatory. The agreement must be in a writing signed by you, and it must state the method by which the fee is determined — including the percentages that accrue to the lawyer on settlement, at trial, and on appeal; the litigation and other expenses to be deducted from the recovery; and whether those expenses are deducted before or after the contingent fee is calculated. It must also state any expenses you will be liable for whether or not you prevail. At the conclusion of the matter the lawyer must give you a written statement of the outcome and, if there is a recovery, the remittance and the method of its determination.

That before-or-after point is not a technicality. On the same recovery and the same percentage, the two methods can differ by thousands of dollars in your pocket. If the agreement is silent on it, that is your first question.

Idaho Rule of Professional Conduct 1.4(b) requires a lawyer to explain a matter to the extent reasonably necessary to permit you to make informed decisions about the representation. So asking whoever sent you this packet to walk you through the settlement-authority language line by line is not an imposition on them — it is their obligation.

One threshold point before any of that: confirm the person sending you documents is actually a licensed lawyer. Claims advertised to the public are often collected by marketing companies that sign people up and refer the file elsewhere.

What you can do

1. Look the person and the firm up in the Idaho State Bar's online directory, or the bar of whatever state they say they practice in. 2. Ask for the complete packet before signing anything — the fee agreement, the cost and expense terms, and any medical-lien, third-party-funding, or authorization forms. 3. Find the percentage. Then ask what it becomes if the case settles before suit, after suit is filed, at trial, and on appeal. 4. Ask in writing: are costs deducted before or after your fee is calculated, and what do I owe if we lose? 5. Find the settlement-authority clause. Ask that it state in plain terms that no settlement is accepted without your written approval. 6. Ask whether your case will be referred or associated to another firm, and how the fee is divided if it is. 7. Pay a second, independent lawyer for a one-time flat-fee review. A document review is a small, defined cost and it is the whole point of your question. 8. Keep a fully signed copy for yourself the day you sign.