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In contingent work. Some cases you may put a ton of time in for a small fee and others you may expend only a few hours for a large fee. I feel like I’m being set up to fail with this setup and mindset. Thoughts??
This seems really difficult to achieve on the front end, especially when the ultimate contingent fee is up in the air. I could see using these metrics on the backend to assess whether the firm’s case selection is working and worthwhile, but this would frustrate me. I guess all you can do is at the outset of every task ask for a budget of time you’re allowed to spend on it, and stick to it.
I do PI work 100% on contingency and have never been reprimanded for spending too much time on a task. Sounds like you’re in a toxic environment.
It’s a bit unusual to be tracking your hours on a contingency file, but I would say the partner is half right in thinking about effective rates. The reason they are only half right is that their calculation is something that needs to happen at the outset, before the case is signed.
The general rule I try to follow in case selection is that I want my effective rate to come in at least 50% above what my hourly rate would be, and preferably double. The reason for the premium is that (unlike on an hourly matter) I am risking loss of my time, agreeing to wait years to get paid, and also essentially giving the client an interest-free loan over that period by fronting the costs.
There is an “investment” aspect to spending the time. If you spend zero hours on a contingency case, you lose and your effective rate is zero. If you spend 5,000 hours and collect a fee of $5,000, your effective rate is $1/hr. Somewhere in there, your investment of time generates outsized value, and then starts to deteriorate. You can’t predict where that will be with any certainty, but you want to at least try to eyeball it at the beginning. After that, you are in. The case takes the time it takes, and the client is counting on you to get them the best result you can. You have to do the work and do it right.