Can a lawyer take a will contest on a contingent fee, and can the lawyer pay a private investigator a contingent fee on the case?

Plain-English summary

The committee answered two questions from a lawyer asked to handle a will dispute: whether the lawyer could take the matter on a 33-1/3% contingent fee, and whether the lawyer could compensate a private investigator on a 16-2/3% contingent fee. It answered the first question yes, with caveats, and the second no.

On the contingent fee, the committee relied on EC 2-20's recognition that contingent fee arrangements are accepted in civil cases because they often provide the only practical means to afford competent counsel and because success produces a fund from which the fee is paid. Because the potential client may not be able to pay a fixed fee and a recovery fund would result, the arrangement was proper, subject to limits: contingent fees in this context are subject to judicial review for reasonableness, the fee cannot be excessive under DR 2-106(A) and (B) (the committee noted a court might find 33-1/3% excessive depending on the dollar amount and the time and effort actually spent, especially given the inquirer's own expectation of a possibly short engagement), and the lawyer must satisfy DR 2-106(D)'s requirement of a writing stating how the fee is determined and a closing statement of the outcome and remittance.

On the private investigator, the committee concluded the proposed contingent arrangement was improper. Under General Business Law section 84(1) it is unlawful for a licensed investigator to accept a contingent fee, so the lawyer's participation would violate DR 1-102(A)(3) (if the investigator is the lawyer's agent) or DR 7-102(A)(7) (if the investigator is the client's agent). The committee added that if the investigator were to be a witness, DR 7-109(C) separately bars paying a witness compensation contingent on the outcome, and that under DR 5-103(B) the expenses of the investigation must be borne by the client (assuming the client is not indigent), not the lawyer.

Currency note

This opinion was issued in 1993, before New York replaced the Code of Professional Responsibility (the Disciplinary Rules and Ethical Considerations cited here) with the New York Rules of Professional Conduct, effective April 1, 2009. The current rules address fees and contingent fees through Rule 1.5 and payments to witnesses through Rule 3.4. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer take a will contest on a contingent fee?

A: The committee concluded a lawyer may, where the client cannot afford a fixed fee and a recovery fund would result, subject to the fee being reasonable and the contingent-fee writing requirements being met.

Q: Is a 33-1/3% contingent fee automatically allowed?

A: No. The committee noted contingent fees in this context are subject to court review for reasonableness, and a court might find a given percentage excessive depending on the dollar amount and the time and effort the lawyer actually expended.

Q: Can a lawyer pay a private investigator a contingent fee?

A: The committee concluded no, because General Business Law section 84(1) makes it unlawful for a licensed investigator to accept a contingent fee, so the lawyer's participation would violate DR 1-102(A)(3) or DR 7-102(A)(7).

Q: Who pays the investigator's expenses?

A: The committee concluded that under DR 5-103(B) the expenses of the investigation must be borne by the client, assuming the client is not indigent, not by the lawyer.

Background and rules framework

The opinion applied New York Code DR 2-106(A), (B), and (D) (illegal or excessive fees, reasonableness, and the contingent-fee writing requirement), EC 2-20 (acceptance of contingent fees), DR 5-103(B) (advancing litigation expenses), DR 7-109(C) (contingent payments to witnesses), and DR 1-102(A)(3) and DR 7-102(A)(7) (illegal conduct and counseling illegal conduct), read against General Business Law sections 70(2) and 84(1) governing licensed investigators. The analysis corresponds to ABA Model Rule 1.5 (fees, including contingent fees) and Model Rule 3.4 (fairness, including payments to witnesses).

Citations and references

Rules of Professional Conduct:

• New York Code DR 2-106(A), DR 2-106(B), DR 2-106(D), DR 5-103(B), DR 7-109(C), DR 1-102(A)(3), DR 7-102(A)(7); EC 2-20 (applied in the opinion)
• MR 1.5 (fees); MR 3.4 (fairness to opposing party and counsel)

Statutes:

• New York General Business Law section 70(2) (investigator licensing) and section 84(1) (bar on contingent fees for investigators)

Cases:

• Gair v. Peck, 6 N.Y.2d 97 (1959), schedule of contingent fees
• Matter of Potts, 213 App. Div. 59 (4th Dep't), aff'd, 241 N.Y. 593 (1925), Surrogate's Court oversight of will-dispute fees

See also

• NYC Bar Formal Op. 1991-3: Nonrefundable Retainers and Advance Fees
• NYC Bar Formal Op. 1995-1: Credit Cards and Other Fee Financing

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-1993-2-contingent-fees-will-contests-compensation-of-private-investigators/