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$13 Million Estate Contingency Fee Confirmed

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Estate battles are expensive. Given the potential cost, many clients do not have the ability to pay an attorney by the hour to prosecute a client's case. Without an alternative to the traditional hourly fee arrangement, an attorney will not be able to take the case. Contingency fees are an available alternative that both clients and attorneys often consider and embrace.

A recent Texas Supreme Court explained the benefits of contingency fees:

This risk-sharing feature creates an incentive for lawyers to work diligently and obtain the best results possible. A closely related benefit is the contingent fee's tendency to reduce frivolous litigation by discouraging attorneys from presenting claims that have negative value or otherwise lack merit.

Even when attorneys are successful in resolving the dispute for which they were hired, a client can forget the benefits of the original contingency fee arrangement and challenge the agreement. Such was apparently the case in a protracted legal battle over the estate of valuable coffee company and cattle ranch owner.

It was a classic estate case: four children of the first marriage of a business entrepreneur pitted against their stepmother. Soon after the death of their father Leroy Hill, his four children learned that they would share $675,000 from their late father's $30 million estate; their stepmother would take the rest.

The children hired a well-respected law firm that engaged in a five-year estate battle. At the end of the battle and after appeals that included an appeal and decision by the Alabama Supreme Court, the value of the assets recovered for the children was about $33.1 million. The attorneys had spent more than $485,000 in litigation expenses and over 11,000 hours on the case. The four children then opposed the original 40% contractually negotiated contingency fee.

Circuit Court Judge Sarah Stewart heard the dispute. Her words sum up the accomplishments of the lawyers.

The results achieved by (the lawyers) Kilborn and McDonald are phenomenal: instead of three Hill children sharing $675,000, all four Hill children stand to share in an estate the Hill children themselves recently valued at over $30 million, unencumbered by any personal claim by (stepmother) Debbie Hill." The lawyers "accomplished this feat against a team of well-funded highly regarded counsel to whom (the stepmother) paid millions of dollars.

The result of all this: The four children lost their effort against the law firm that brought them victory. The Circuit Court Judge ruled in favor of the lawyers and determined that the 40 percent was fair.

The Judge held the clients accountable for the contractual arrangements that they had mutually chosen - contractual arrangements that got the attorneys to do thousands of hours of work and spend hundreds of thousands of dollars. When clients and their attorneys agree to the risk sharing features of a contingency fee, the attorneys deserve to see their hard work rewarded and the terms of their contract protected.

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