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references54 to the high degree of practical control that
attorneys acquire under contingent fee agreements over the
prosecution, settlement, and recovery of plaintiffs’ claims.
After Mr. Kenseth signed the contingent fee agreement, he
had absolutely no control over the portion of the recovery from
his claim that was assigned to and received by Fox & Fox as its
legal fee. The agreement provided that, even if Mr. Kenseth
fired Fox & Fox, Fox & Fox would receive the greater of 40
percent of any recovery on Mr. Kenseth’s claim or their regular
hourly time charges, plus accrued interest of 1 percent per
month, plus a risk enhancer of 100 percent of their regular
hourly charges (not exceeding the total recovery). The agreement
also stated that Mr. Kenseth gave Fox & Fox a lien on any
recovery or settlement. The agreement also provided that Mr.
Kenseth would not settle the claim without first obtaining the
approval of Fox & Fox.
As noted above, the contingent fee agreement between Mr.
Kenseth and Fox & Fox was not an intrafamily donative transaction
and did not occur within an economic group of related parties.
In addition, Mr. Kenseth’s control of his claim (and of any
recovery therefrom) was sharply reduced or eliminated by the
54 See MacKinnon, Contingent Fees for Legal Services: A
Study of Professional Economics and Liabilities 5, 21-22, 29, 62,
63, 64, 70, 73, 77, 78-79, 80, 196, 197, 211 (American Bar
Foundation 1964).
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