Often, personal injury attorneys will place potentially misleading statements on their websites such as, “No fees until we win!” With respect to statements like these, we must refer to Rule 7.1, which states that a communication is misleading if it omits a fact necessary to make the statement not misleading. While the Model Rules do not speak specifically to the misleading nature of contingency-fee statements, many States do. This is an issue that you’ll definitely want to research locally.
Unfortunately, contingency statements such as, “No fees unless we win,” or “You won’t pay unless we win your case,” are very misleading because much of the time, the client is responsible for litigation costs.
At face value, the simple contingency-fee statement, unqualified, may lead a lot of visitors to a personal injury website to think that hiring the lawyer won’t cost them anything; in fact the client may be on the hook for expert witnesses filing fees, printing and what not. So, at the end of the case, assuming a successful outcome, the lawyer shaves the costs off the top, and splits the rest 60/40. So, the statement “No fees unless we win,” is materially misleading, and some States even specify that it’s a violation of Rule 7.1.
The States that have spoken to it require an additional disclosure. California phrases the restriction of it in its comment to Proposed Rule 7.1 as follows:
A communication that states or implies “no fee without recovery” is misleading unless such communication also expressly discloses whether or not the client will be liable for costs.
What is curious about this restriction is that I’ve never see the contingency fee statement correctly phrased on a lawyer’s website. I’ve seen the contingency fee statement on many personal injury websites, but I never see the second part – “but, by the way, you’ll be responsible for costs, whether we win or not.”
While California may seem like an extreme example, this is actually kind of a gentle formulation of the disclaimer when you compare it to the way it’s phrased in other States.
Research your local rules, and if you do have a statement to that effect on your website, if your State speaks to it, you’re going to want to have an addendum to that disclaimer that the client (if they are) is responsible for costs.
When I have a personal injury firm in a State that has this restriction, I prefer to remove the contingency fee statement altogether over adding the addendum to be in compliance with the local rules. To comply would set you apart in a bad way from all of the contingency-fee lawyers in your community who don’t care or are unaware of the rule.