Contingency Fees: 40% of a $100 Million Estate?

At the end of 2008, New York Court of appeals held that without more facts, it could not decide whether a 40% contingency fee from a $100 million dollar estate is unconscionable.  Graubard Miller, the law firm trying to collect, already collected $18 million in legal fees from the estate and would collect the contingency fee as payment for about five months worth of work. 

In a footnote, the court stated that it is not unconscionable for an attorney to receive more through a contingency fee than the attorney would receive at an hourly rate.  Whether outlandish fee agreements can be undone with an unconscionablility claim is yet to be determined.

See Lawrence v. Graubard Miller, 11 N.Y.3d 588 (Ct. Ap. 2008).

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this case to my attention.