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cases handles are virtually all contingent fee cases.
This means he doesn’t make a cent unless and until his
client recovers, at which time he receives a percentage
of the recovery. A contingent fee practice is very
risky for an attorney, for a variety of reasons.
Sometimes you lose, in which case you recover nothing.
Sometimes you win, but much less than what you hoped
for. Sometimes you win a big judgment against a defen-
dant who doesn’t have any money, in which case you
recover nothing. Sometimes you win, but only after
year and years of hard work, during which time you are
spending your own money to advance your client’s case.
In Mr. Lloyd’s case, he is the only employee of
Henry M. Lloyd, P.C., a professional corporation which
he owns. Each year the corporation pays all of its net
income before salary to Mr. Lloyd as his salary.
Consequently, each year, the corporation has no net
income and all of the net income from Mr. Lloyd’s law
practice is reported by Mr. Lloyd on his personal
income tax return.
The income/expense table was prepared on September
2, 2005, which means that it probably covered the
three-year period September 1, 2002 through August 31,
2005. These were the three best years Mr. Lloyd has
had in the past twelve years. In contrast and as
discussed below, my enclosed analysis looks at Mr.
Lloyd’s income for the previous 7 and 12 year periods.
As you can see, for the past 7 years, Mr. Lloyd
earned nothing from his law practice for the years
1998, 1999, 2000, and 2001. If his average income had
been computed for that four year period, it would have
been zero. As it stands, his average monthly income
for the seven year period is only $2,548.[22]
Mr. Lloyd’s income for the past 12 years is
better, but only marginally so, and certainly nowhere
near as good as the income reflected on the income/
expense table. In fact, for the 12 year period ending
in 2004, Mr. Lloyd’s average monthly is only $5,435,[22]
which is less than 1/3 of the average monthly income
reflected on the income/expense table.
22See infra note 32.
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Last modified: March 27, 2008