Legal Ethics Opinion #1563

Fees:  1988 Attorneys Fee Award, Contingent Fee Contract

You have presented a hypothetical situation in which Plaintiff in
a civil rights case enters into a contingent fee agreement with
Attorney.  The contingent fee agreement provides that the entire
recovery is subject to the contingent fee.  Attorney's fees are
awarded to prevailing Plaintiff under 42 U.S.C.S.  1988.  The
awarded attorney's fees may exceed Plaintiff's damage award. 
Plaintiff has not paid any attorney's fees. 

You have asked the committee to opine, under the facts of the
inquiry, whether the attorney may include the awarded attorney's
fees in the recovery which is subject to the contingent fee
agreement, (l) where the attorney's share of the total recovery
exceeds the attorney's fees awarded; and (2) where the attorney's
share of the total recovery is less than the attorney's fees
awarded.

The appropriate and controlling Disciplinary Rules related to
your inquiry are DR 2-105(C) which articulates the requirements
for a contingent fee; and DR 3-102(A) which states that a lawyer
or law firm shall not share legal fees with a nonlawyer. 

In response to both questions and relative to civil rights cases
in which attorney fees have been awarded, the committee is of the
opinion that it would not be improper for the attorney to include
the awarded attorney's fees in the recovery which is subject to
the contingent fee agreement, regardless of whether the
attorney's share of the total recovery exceeds or is less than
the attorney's fees awarded.  The committee believes that in many
instances, such as the civil rights case involved here, a
contingent fee may provide the only practical means by which one
can economically afford, finance, and obtain the services of a
competent lawyer to pursue his claim.  See EC 2-22. The committee
opines, therefore, that the contingent fee described here is not
improper under DR 2-105(C), provided that the fee is reasonable,
adequately explained, and agreed to by the client and further
provided that the fee is not in violation of any statute or rule
of court.

With regard to fee-splitting, the committee believes that an
award of attorney fees to a plaintiff in a 42 U.S.C.S. l988 case
does not constitute legal fees as contemplated by DR 3-l02,
unless otherwise prescribed by statute or court Order.  See Los
Angeles Bar Association Ethics Opinion 447 (undated), ABA/BNA
Law. Man. on Prof. Conduct, 901:1703.

Committee Opinion
December 14, 1993