Opinion ID: 2639067
Heading Depth: 1
Heading Rank: 2

Heading: Tests for Reasonableness of Fees

Text: ¶ 7 In their Joint Stipulated Case Presentation, the parties agree to two tests for judging the reasonableness of fees. The first test involves the fee setting stage when the attorney and client initially agree to a fee arrangement. If during this fee setting stage, the contingency fee agreement was based on fraud, mistake, undue influence, or suppression of facts, or is contrary to public policy, then the attorney has secured an unwarranted premium for a risk that did not realistically exist. This test is apparently taken from a footnote in Oklahoma Turnpike Authority v. New Life Pentecostal Church of Jenks, 1994 OK 9, ¶ 13, n. 17, 870 P.2d 762, 766, n. 17. The second test is based on outcome analysis. This test is codified in 5 O.S.2001, § 7, and limits an attorney in a contract for a percentage of a client's cause of action or claim to no more than 50 percent of the client's net recovery, whether by judgment or compromise. ¶ 8 Although the Bar agrees that the contingency fee passes these two tests, it nevertheless asserts the fee was both excessive and unreasonable, and therefore a violation of Rule 1.5(a), ORPC. The OBA submits that reasonableness is a legal concept always subject to judicial scrutiny and evaluated on a case-by-case basis. The Bar offers that fee reasonableness can be determined by a third test: upon reflection. This means that a fee should also be judged in hindsight as to whether it is reasonable in accordance with the eight factors listed in Rule 1.5(a). [1] The OBA interprets the factors set out in Rule 1.5(a) in light of the outcome and conclusion that no formal will contest materialized. The Bar concludes that the Respondent cannot justify his fee in accordance with the reasonable standards set out above, regardless of the level of risk he undertook at the time of contracting. But the Respondent argues that this position misinterprets the application of Rule 1.5(a) by creating an additional test not found or articulated in Oklahoma law. He notes that factor 8 in Rule 1.5(a) addresses whether the fee is fixed or contingenta clear indication that contingency fees cannot be weighed upon factors of time, novelty or expertise.