A trove of data revealing the contingency fees charged by New York City lawyers suggests that in virtually every tort case, lawyers charge the full one-third allowed under state regulations.
Researchers at Claremont McKenna College and the USC Gould School of Law obtained retainer and closing statements for nearly 300,000 cases filed in New York’s First Judicial Department from 2004 to 2013. The data revealed the unsurprising fact that most lawsuits end in settlement – not the 95 percent assumed under conventional wisdom, but at least 85 percent of the cases studied were settled without going to trial.
And most cases settle for a relative pittance, compared with high-stakes corporate litigation. Three-quarters of settlements were for less than $40,000.
A random sample of 100 of those statements uncovered a more unusual trend, however. In only three of those 100 cases did lawyers charge less than the 33.3 percent maximum for contingency fees in New York.
The finding suggests that while lawyers spend millions of dollars advertising their services on TV and in subway cars, they almost never compete for clients by lowering their fees, puzzling given the supposed glut of law-school graduates trying to earn a living in New York.