As the NFL case progresses, we regularly receive questions from retired players and their families about how lawyers in the case are being paid. There has been a lot of confusion.
Sometimes the confusion stems directly from the Concussion Settlement website, which states that lawyers shall be paid by the NFL fund for COMMON BENEFIT FEES, none of which have been awarded. Strangely, the website never mentions Contracts (that is, the retention agreements). Other times, the confusion is created by lawyers new to the case or other people without experience in Multi-District Litigation (“MDL”), and they have come to a conclusion that is not well-informed.
The confusion, of course, centers around the difference between COMMON BENEFITS FEES and the INDIVIDUAL CASE FEES that arise from the Contracts the players and lawyers entered into at the beginning of this case and on an ongoing basis.
At the outset, let’s be clear. The INDIVIDUAL CASE FEES are based on a contingency Contract (payment via a percentage of a settlement sum, judgment, or verdict) and are completely different from COMMON BENEFIT FEES. For those who have argued that COMMON BENEFIT FEES are a substitute for INDIVIDUAL CASE FEES (because allegedly, the lawyers who receive both would be “double-dipping”), let’s examine that statement.
Often, we’ve heard the “double-dipping” statement from lawyers new to the case who send out blast emails looking for clients and offering low rates. One of their pitches is this: The leading firms in the case will be paid by the COMMON BENEFIT FEES, so they shouldn’t receive anything else, because it is “double-dipping.” That makes no sense at all, and here’s why. INDIVIDUAL CASE FEES are the cornerstone of every case. That is how all of the lawyers get paid for representing individual clients with individual cases. It’s the one guarantee by contract on which the lawyers can rely. The lawyer analyzes a client’s case, makes sure the client is examined by the best possible specialist now or in the future, and she submits a claim if the diagnosis supports it.
If a lawyer had no right to INDIVIDUAL CASE FEES, she would have no incentive to do anything for any client at any time. That would be terrible for the class, particularly in light of the fact that the Settlement Agreement is quite complicated and is as thick as a small telephone book. It’s not easy to understand. The misinformation traveling around the internet, email, and Facebook pages is proof that few people other than the lawyers who originated the case actually understand the Settlement Agreement and its extraordinary requirements. Also, the NFL, as we all know, has been a litigious and recalcitrant party when it comes to addressing benefits to players in the context of the NFL/NFLPA Benefits Plans. The NFL often denies benefit plan applications for players who unquestionably should receive benefits. We’ve seen it, and we have fought that fight. The players should expect no less in this Settlement Agreement. As a result, having an experienced lawyer work with the player to understand and receive the maximum benefit under this Agreement is the wisest way to go; it’s also why the INDIVIDUAL CASE FEES are so important. Without them, the attorneys have no incentive to help the players at all.
(Please don’t lose sight of the fact that the people who raise the “double-dipping” argument are almost always the new lawyers who jumped into the case at the last minute and now want to reap an advantage by having players fire their original lawyers. Those new lawyers are in it for the money, nothing more, and they never had the foresight or spine to bring this case from the outset. We did.)
As to the COMMON BENEFIT FEES, they are separate and determined only in the future, possibly far in the future. They are awarded – by Court Order, not by Contract – to lawyers who led the case from the beginning, took huge risks, and spent time and treasure prosecuting the case. They also reimburse firms for expert fees, administrative costs, and other costs incurred in prosecuting the case. Why? Because the lawyers who apply and receive the COMMON BENEFIT FEES benefited the group as a whole by initiating the case and achieving a final resolution.
The Locks Law Firm, for example, incurred debt and spent thousands of uncompensated hours moving this case forward every step of the way. The Court appointed two of our lawyers to the Executive Committee for the Plaintiffs in April 2012, and we propelled the case with hotly contested litigation in federal and state courts around the country. We were the only firm to force depositions by court order and take depositions in many different states. We participated in every hearing and every step of the case. The Court appointed us Class Counsel in 2014. From that time forward, we were essential and instrumental in making sure the class stayed together as the case wound its way through the appellate courts.
But COMMON BENEFIT FEES are not guaranteed. The purpose is to grant an appropriate and fair compensation in cases where the attorney has been successful and demonstrated to the Court that she has conferred a substantial benefit on the members of the whole class, in this case the class of retired players. That requires evidence, and only then will the Court entertain an appropriate application.
In every MDL, the district court awards COMMON BENEFIT FEES to a limited number of attorneys who benefitted the class as a whole. In most MDLs, the COMMON BENEFIT FEES come out of the INDIVIDUAL CASE FEES (Contractual attorney’s fees). One of the reasons the contractual attorney’s fees began at a higher level (33% or even 40%) is because the COMMON BENEFIT FEES are often taken out of those fees. In one case, for example, the contractual fees received by lawyers for the plaintiffs were reduced by eight (8) percentage points (for example, if the award to the plaintiff were $10,000, and the attorney’s fees were $3,333, the attorney would pay $800 (8% of $10,000) back to the court for the COMMON BENEFIT FUND.)
This case is different, and even better for our clients. The NFL committed within the Settlement Agreement to pay COMMON BENEFIT FEES itself, so they are NOT coming out of the INDIVIDUAL CASE FEES. As a result, we decided long ago to reduce our fees from 33% to 20%. Because the NFL will pay the COMMON BENEFIT FEES, and they are not carved out of INDIVIDUAL CASE FEES, this allowed us to reduce our INDIVIDUAL CASE FEES to benefit all of our clients. The result: a decrease in the INDIVIDUAL CASE FEES we charge to our clients (now 20%), and an increase in the net recovery to every client of ours who has a qualifying diagnosis. We are making sure that our clients obtain the maximum benefit possible.
There is no court in any MDL of which we are aware that deprived the lead lawyers of contractual fees on the grounds that COMMON BENEFIT FEES were a substitute for INDIVIDUAL CASE FEES or “double-dipping.” We’ve never heard of such a thing. In our opinion, it’s something made up by other lawyers who have encouraged clients to fire us and other lead attorneys across the country, so they can make money off the clients. And in this case, COMMON BENEFIT FEES are far from determined. There is no guarantee. Some firms may receive an award; others may not. How Judge Brody decides these matters is unknown.
So for any player or lawyer who thinks COMMON BENEFIT FEES are an adequate substitute for INDIVIDUAL CASE FEES, they are not. No court ever said they are. They are reasonable and proper, an award for high-risk successful litigation, not a substitute for INDIVIDUAL CASE FEES.