I am not addressing the precise nature of the agreement because I don't know what the retainer says.
But, we can make some reasonable conclusions, and most certainly I do not find this to be something to worry about.
We often hear the figure of One Billion Dollars of damages as a settlement. Note that I have no idea what an appropriate settlement figure is, but to support my reasonable assumption let's cut that in half. $500,000,000.00.
If you had 3 lawyers billing 40 hours a week, at $500 an hour, and let's say they didn't work on any other case at all for 3 years. 40 hours a week x 52 weeks = 2,080 billable hours for this case. 2,080 x 3 = 6,240. Multiply this by $500 and you get $3,120,000. (A note on these figures: It doesn't make any sense to think that one case could provide 8 hours of billing per day for an entire year. I use this absurd exaggerated figure to support the later conclusion, because using this high figure inflates the potential recovery under an hourly agreement, and in the end we see a contingency recovery presents a much higher potential recovery).
BUT even assuming a less-than-usual contingency arrangement of just 10% of the $500M figure which itself has already been reduced, one can see why a contingency agreement presents a reasonable conclusion.
We know that having 3 attorneys billing at $500 an hour and doing nothing but work on this case equals roughly $3.2M a year. $50M / 3.2 = 16.67 years. This would never happen and forgive that I am so confident in this assertion that it is conclusory.
On the modest 10% contingency I am using in this model, at the modest recovery of $500M (here I acknowledge I am running with the $1B figure often provided, reducing it, meaning that I am using recovery figures based only on message board chatter), we see that it just doesn't make any sense for this law firm which is very skilled in this arena and looks to be flush with resources (recent $1B settlement), to seek to be paid on an hourly rate.
There are other reasons it wouldn't make much sense, but most importantly, I have not seen the retainer agreement so this is just what I believe to be reasonable supposition.
Contingency agreements are extremely common, and one should not make the mistake of thinking that contingency agreement are new or novel. If you have ever seen a Morgan & Morgan commercial (we don't get paid unless you do) you can see that these are very, very common. This paragraph is not intended to show that a contingency must be utilized in this case, only to confirm that it is common, happens all the time, and it would be a mistake to think that the possibility of one being utilized is remote)
This post is somewhat lengthy but that is more attributable to me having a lull at work than this being a complex topic.
