Alternative Fee Structures for Litigation

How soon will the US Chamber of Commerce complain about K&E’s $93 million (mainly) contingent fee in the Tronox/Anadarko fraudulent conveyance case? Maybe a short but sweet: Et tu Kirkland?

The story behind the story is told in a March 7, 2016 American Lawyer article. The story follows up from AmLaw using the FOIA to obtain the fee agreement.

In reality, lots of businesses use contingent fees and litigation funding, as Gerchen Keller explains here.  But, the US Chamber of Commerce complains constantly when state Attorney Generals and other government agencies do the same thing. Happily, the Tronox/Anadarko outcome was a spectacular win for the government, and the fee was well earned.

Good questions and reporting by Susan Beck.

What will the global litigation industry look like in 10 years? My bet is that it will look increasingly entrepreneurial, and more like the litigation industry as it presently exists outside the US.

In Australia, a personal injury law firm known as Slater & Gordon went public back in May 2007, as it describes on its history page. That development caught the eye of the WSJ – see here.

In Europe, there is an interesting variation on that theme as corporate law firms already include groups of lawyers working on contingent fees for personal injury claimants. Thus, Field Fisher Waterhouse looks like and is a corporate law firm with offices across Europe, as you can see by visiting its home page. In addition, however, the firm also has an apparently active, successful practice representing personal injury claimants in a wide range of claims. The website page for personal injury claims is here, and describes the firm representing plaintiffs in medical malpractice litigation and in asbestos litigation.

In the US, the move to entrepreneurial litigation is today the subject of a growing number of discussions about moving away from the billable hour to flat fees and contingent fees for litigation and corporate work. Indeed, there is an already active alternative entrepreneurial approach used by boutique law firms (e.g. Bartlit Beck; Valorem Law Group; Boies Schiller ) and some large law firms (e.g. Robins Kaplan for some time, with Saul, Ewing and Kirkland & Ellis now saying they are doing the same) working for corporations on contingent fees and various forms of flat fees. And, firms such as Robins Kaplan sort of took on personal injury litigation as plaintiffs when it represented the state of Minnesota in tobacco litigation. Take a read through the websites and note the wide range of cases handled for corporate Americas as plaintiffs.

Where will this end up in the US ? Hard to say due to state by state ethics rules, but plainly the American liitigation industry will become even more entrepreneurial, as it already is around the globe. And, with more and more corporations acting as plaintiffs, some traditional positions are going to become harder to sustain. It will be, for example, harder for corporate America to complain credibly about contingent fees and “trial lawyers” when corporate America is using the same approach.