Why don't lawyers keep a queue of contingency cases?

Question

I frequently encounter situations in which there is likely civil liability between two parties but where the aggrieved party does not pursue legal action because they lack money and/or expertise.

Occasionally I have approached lawyers when I see such cases with apparently positive (risk-adjusted) expected return from at least threatening, if not actually carrying out, litigation. And I usually get one of two answers:

1. We're too busy to do something like that on contingency right now.
2. We don't think the odds of prevailing and collecting merit the cost of pursuing that on contingency.

I'm not a lawyer, but I follow the industry well enough to know that there are a lot of lawyers lacking for work. If you're an unemployed lawyer, or a solo practitioner without a full caseload, then isn't any non-frivolous case with a positive potential payout worth pursuing? And if you're a firm with the sunk cost of offices, staff, subscriptions, etc., wouldn't you always want those assets working at 100% capacity?

Therefore, why doesn't every practice want a queue of potentially profitable contingency cases that they can chip away at when they don't have a 100% paid workload? I can understand that if one took a contingency case into litigation, and then paid work came along, one wouldn't want the contingency case distracting from the paid work. But can't one accept a case on contingency and "as time permits," so that in such an event one would simply drop the contingency case (or, if it looked promising, hand it off to some other lawyer in a slump)?

Are there practical or professional reasons this is not standard practice?

From an economic perspective this seems odd: As a client if I don't have the means to pursue a legitimate claim, then (on principle) I might be willing to give up to 100% of any winnings to a lawyer who does pursue it. As a lawyer, if I have a positive expected return to a contingency case, I'd like to have the option of picking that up when I can't find other work (to within some error term – perhaps the alternative of running a coffee shop out of my office, or taking a minimum-wage writing job.)

Answer 1

There are two basic problems with your theory:

1. You say:

can't one accept a case on contingency and "as time permits," so that in such an event one would simply drop the contingency case (or, if it looked promising, hand it off to some other lawyer in a slump)?

No. you can't. If you take a case, then drop it because a more profitable case comes along, you might well be disbarred, not to mention sued by the client you just threw over. You might even spend a night in jail for contempt--in many cases, you are not allowed to simply drop a case without the court's permission.

So if you accept a contingency case, you accept it until (1) the case is over, (2) the client fires you, (3) you, the client, and the judge all agree you can quit, or (4) you can convince the judge you should be allowed to quit regardless of the client's wishes. Until then, you are stuck with the time and expense involved with handling the case.

2. "Expense" is the second problem. You seem to be under the impression that once you've paid for the office and the coffee maker, there's no downside in pursuing a contingency case.

But filing and pursuing a lawsuit cost money, not just time. Copying and coding documents costs money. Stenographers for depositions cost money. Just filing a lawsuit often costs a few hundred dollars. Hell, in a major lawsuit, you will probably spend a few hundred dollars just on postage. And a lot of commercial litigation now involves expert witnesses, whose fees start at a few hundred dollars an hour. Normally that all gets billed back to the client, but on a contingency case the lawyer often absorbs most or all of it.

So from a lawyer's perspective, even if he or she is not working right now, "any positive payout" isn't enough. It has to be enough of a payout, and enough of a chance of winning, that the expected reward is worth paying, potentially, the cost of a trial, and forgoing other work if things get busy again while you're trying to prep your contingency case for trial.

The fact is, for a lot of this sort of case--even if it looks "potentially profitable" to a non-lawyer--is going to be less profitable, in the long run, than spending the same amount of time playing golf with people who might actually pay you by the hour to do something.

Also, two quick notes:

1. Your suggestion of raising the contingency up to 100%, or close to it, won't help--it's illegal in many jurisdictions, and unethical in all of them.

2. As a side note, even if a lawyer did take one of these cases, it wouldn't do you any good, since lawyers are prohibited in most cases from splitting their fees with non-lawyers.

Answer 2

There are three problems here: one, as @chapka pointed out, taking a case to trial is not cheap. Banks will not loan money to attorneys on contingent fee cases, at least in the United States. This means that the lawyer is the case financier. A lawyer without much work is in no position to finance all these "potentially profitable" cases that may not pay out for years when rent is due next month.

The second is that term, "potentially profitable." Not only must you analyze liability, you must analyze ability to pay. In the case of corporations, that's relatively easy. In the case of individuals, not so much. A judgment that took you four years to obtain can be wiped out in an afternoon with a bankruptcy filing.

Third, contingency fee cases make you and your client financial partners in fact, though not in law. This is never a good position to be in. I'd like to choose my partners based on their skills, abilities, and maybe even their finances and not because they happened to be standing on a streetcorner when a taxicab jumped the curb and injured them. {you know that the taxi driver is a no-asset defendant, right? And the taxicab companies have shielded themselves from liability? The driver is only an employee if someone mentions the word Uber or Lyft. Otherwise, they wash their hands.}