Effective Hourly Rates of Contingency-Fee Lawyers: Competing Data and Non-Competitive Fees

One of the foremost civil justice issues commanding attention at both federal and state levels is reform of the tort system. Central to the ongoing tort reform debate is data cited by both proponents and opponents in support of their respective positions. No set of data more critically informs the debate than the yields realized by lawyers engaged in contingent-feefinanced tort claiming. Most cited as authoritative is a set of data indicating that the yields of contingent-fee claiming approximate the returns realized by hourly rate lawyers. This data—central to contentions that tort reform efforts are not only unnecessary but also counterproductive in that they would deny claimants access to justice—is unreliable and invalid. More reliable data, which I present, demonstrates that the yields from contingency-fee practice have become inordinately high; indeed, they have increased enormously in recent decades, often amounting today to thousands of dollars an hour. In theory, these yields implicate ethical rules purporting to limit fees to “reasonable” amounts. In fact, “reasonable fee” rules are