Passage - General Questions

[Administrator]

Passage Discussion

The final passage deals with the notion of introducing contingency fees for lawyers’ services, particularly the LRCWA’s recommended uplift fee— in the event of a successful outcome, clients pay lawyers their normal fees, plus an additional percentage of those fees. The author argues against the idea of uplift fees on a number of grounds, which are discussed extensively in the third and fourth paragraphs.

Paragraph One:

The passage opens with a synopsis of the LRCWA’s report, highlighting its recommendation regarding contingency fees: the lawyer only gets paid if he or she is successful in the case. To protect the lawyer from loss, such charges generally exceed regular fees.

Paragraph Two:

The second paragraph defines a specific type of contingency fee (the “uplift” fee) and describes the rationale behind its introduction. The uplift fee is the only type recommended by the LRCWA. It represents an extra percentage of the lawyer’s normal fee, paid only if the case is successful. For the fee to apply, two conditions are required: 1) it must be used as a last resort when no alternative arrangements are possible, and 2) the lawyer must agree that the client cannot pay the fee if the damages are too low.

Paragraph Three:

This paragraph introduces the author’s position: uplift fees represent an arrangement that is unfair to the lawyer. It forces lawyers to investigate both the case and the client’s financial situation, which is burdensome. Furthermore, since the costs of handling a case are unpredictable, while the fee is fixed, it would be difficult for lawyers to gauge in advance if it’s fiscally responsible to take on the case.

Paragraph Four:

In the last paragraph, the author argues that the notion of contingency fee arrangements is also unfair to many clients, since the LRCWA mandates that such arrangements be available only to the poorest clients. This means that certain types of litigation would be inaccessible to wealthier clients who cannot immediately liquidate assets to pay for the trial. The LRCWA mandate is also unfair because, despite only being an option for a select few clients, contingency fee arrangements benefit all clients: they finance the cost of litigation, shift the risk of failure/loss to the lawyer, and increase a lawyer’s commitment and diligence.


VIEWSTAMP Analysis:

Only two Viewpoints are expressed in the passage: the LRCWA’s rationale for using uplift fee arrangements (lines 11-20), and the author’s objection to this recommendation (lines 30-59).


The Structure of the passage is as follows:

• Paragraph 1: Summarize the LRCWA’s recommendations for introducing contingency fees.
  
  Paragraph 2: Define a specific type of contingency fee (the “uplift fee”), describe the rationale behind it, and outline the conditions necessary for the fee to apply.
  
  Paragraph 3: Present the author’s argument against the LRCWA’s recommendations, and explain why the uplift fee arrangement is unfair to lawyers.
  
  Paragraph 4: Continue the discussion from the third paragraph and explain why the LRCWA’s proposal is also unfair to many clients. The last paragraph also enumerates the reasons why contingency-fee arrangements would benefit all clients.

The Tone of the passage is polemic. The author is both critical of the LRCWA’s recommendations, and defensive of those who she believes are unfairly burdened by these recommendations.

Two main Arguments are presented in the passage—the rationale behind the uplift agreements recommended by the LRCWA (lines 17-20), and the author’s criticism of these recommendations (third and fourth paragraphs). The author’s view is supported by the following observations:

• 1. The recommendations place a burden on lawyers who are required to investigate the client’s financial situation.
  
  2. The final cost of litigation can vary, whereas the uplift fee does not. This makes it difficult for lawyers to gauge in advance if it’s fiscally responsible to take on a case.
  
  3. Certain types of litigation would be inaccessible to wealthier clients who cannot immediately liquidate assets to pay for the trial.
  
  4. Despite only being an option for select few clients, contingency fee arrangements would benefit all clients.

Whenever an argument is supported by several reasons, expect to be questioned on your knowledge of those reasons (especially if they are enumerated). This is a very common question indicator!

The Main Point is that the uplift fee arrangements recommended by the LRCWA are unfair to both lawyers and many clients.

[lanereuden]

This second caveat for the fee are is so weird because the additional fee is like a bonus, so of course the lawyer should understand that he may not get that [extra] money. Why does the caveat need to be stated? It seems self-evident? Also, why do other means have to be exhausted for it to kick in ?

[Jeremy Press]

Hi Lane!

It wasn't immediately clear to me in your question, but I'm assuming by the "second caveat" you're referring to lines 26-29, and when you're referring to "other means being exhausted," you're referring to lines 23-26. I'll answer the question on that basis, but please do let me know if you had a different portion of the passage in mind when seeking clarification.

Earlier in the second paragraph, the author presents the reason the LRWCA has recommended the two conditions that must be satisfied to use an uplift fee arrangement, stating, "Th[e] restriction is intended to prevent lawyers from gaining disproportionately from awards of damages and thus to ensure that just compensation to plaintiffs is not eroded." Notice how the next sentence applies this rationale to the two conditions by saying, "A further measure toward this end is found in the recommendation that ... ."

The first condition, that an uplift fee "must be used only as a last resort when all means of avoiding such an arrangement have been exhausted," is intended to ensure that the uplift fee is not overused (and thus that plaintiffs' compensation from the judgments they receive is not eroded by "overpaying" in too many cases). Requiring the uplift fee to be used as a last resort is intended to ensure that in as many cases as possible lawyers will simply charge their normal fee.

The second condition, that the "client is financially unable to pay," is intended to ensure that there is, in fact, some risk to the lawyer in the absence of the uplift fee agreement. If the client is able to pay normal fees, whether or not a monetary judgment is awarded to the client, then there is no risk to the lawyer and a contingency fee would take more of the judgment away from the plaintiff (and give it to the lawyer) than would ordinarily be the case. The LWRCA wants that money going to the plaintiff, not the lawyer.

I hope this helps!

Jeremy

[lanereuden]

Hi Lane!

It wasn't immediately clear to me in your question, but I'm assuming by the "second caveat" you're referring to lines 26-29, and when you're referring to "other means being exhausted," you're referring to lines 23-26. I'll answer the question on that basis, but please do let me know if you had a different portion of the passage in mine when seeking clarification.

Earlier in the second paragraph, the author presents the reason the LRWCA has recommended the two conditions that must be satisfied to use an uplift fee arrangement, stating, "Th[e] restriction is intended to prevent lawyers from gaining disproportionately from awards of damages and thus to ensure that just compensation to plaintiffs is not eroded." Notice how the next sentence applies this rationale to the two conditions by saying, "A further measure toward this end is found in the recommendation that ... ."

The first condition, that an uplift fee "must be used only as a last resort when all means of avoiding such an arrangement have been exhausted," is intended to ensure that the uplift fee is not overused (and thus that plaintiffs' compensation from the judgments they receive is not eroded by "overpaying" in too many cases). Requiring the uplift fee to be used as a last resort is intended to ensure that in as many cases as possible lawyers will simply charge their normal fee.

The second condition, that the "client is financially unable to pay," is intended to ensure that there is, in fact, some risk to the lawyer in the absence of the uplift fee agreement. If the client is able to pay normal fees, whether or not a monetary judgment is awarded to the client, then there is no risk to the lawyer and a contingency fee would take more of the judgment away from the plaintiff (and give it to the lawyer) than would ordinarily be the case. The LWRCA wants that money going to the plaintiff, not the lawyer.

I hope this helps!



Jeremy

Jeremy, thanks so much, and yes...the lines you cite are indeed what i was referring to!
Still, I am bit confused as to why they would want to ensure there is some risk to the lawyer outside of a contract? Wouldn't that contradict the purpose of what's said in condition 1: to make sure people avoid these contracts and use normal fees as much as possible? I mean, if there is more risk outside such contract than within such contract, wouldn't that encourage the use of such contracts?

[lanereuden]

also, I do not understand exactly how this proposal is available only to the least well-off clients...(the thing that is said at the beginning of paragraph 4)...I am not sure how they get to that idea....

[Adam Tyson]

I think you might be misunderstanding that bit about the client being unable to pay, lanereuden. It's not that the client will not be able to pay the uplift (extra) fee, but that the client will not be able to pay the base fee. In other words, the LRCWA thinks that contingency fee arrangements should be used only when there is no other way for the client to afford representation. That helps to minimize the use of them, preventing abuse and lawyers collecting disproportionate amounts. Putting some risk on the lawyer - if you do this and lose, you get nothing - gives lawyers an incentive to avoid them, which is what the LRCWA wants.

And that ties directly to your second question, about the counter-argument made by the author. He is arguing that wealthier clients who have the ability to pay, whether because they have the cash on hand or by liquidating their assets, will be unable to take advantage of contingency fee arrangements, because the restriction of "only if they cannot pay" is too strict. Why should a wealthy person be denied the opportunity to take this approach if they want to, either because they don't want to sell their beach house and boat or because they want to give their attorney a stronger incentive to do her very best? The author argues that the LRCWA's recommendation is discriminatory against the rich folks who might want to enter into a contingency fee arrangement.

I hope that clears things up!

[spsa1000]

Hi! I really, really struggled with this passage- in fact, I got 1/5 on this passage on a practice test where I scored my highest. For the most part, RC is my strongest section. Suffice to say, I am very dejected.

The source of my struggle was the first condition required to be met (line 24-25): "the contingency-fee arrangement must be used only as a last resort when all means of avoiding such an arrangement must have been exhausted." I truly did not understand what this meant. I think now I understand that the crux of my issue was not understanding that a contingency-fee arrangement is entered into prior to lawyer taking on the case, not after the outcome of the case. Instead, this meant I asked myself "what other arrangement could there be? Are clients generally supposed to "tip" lawyers out of their damages and the contingency fee limits this? If so, why would contingency fees be a last resort and not the immediate recommended action."

Because I was so confused and centred so much of my energy and anxiety during this section around not understanding that one sentence and therefore thinking I did not understand the entire passage, I totally bombed the entire passage.

I guess the following are questions I have: Does the passage make clear that the contingency-fee arrangement happens prior to entering into the relationship or is this something that I should have already known? Second, are there any Powerscore tips about what to do when you do not understand a potentially central feature of the passage? Are there tips on how to reason out understanding a sentence?

Thank you so much.

[Adam Tyson]

There is some expectation that you would know that payment arrangements are determined before a lawyer takes a case, spsa1000. Generally, in any business transaction there is some agreement on how much will be charged and how and when it will be paid before the parties begin work. Even when you go to a store, the payment situation is made clear before you become the owner of a product sold there - they tell you the price and let you know what payment methods they will accept, and you either accept their terms and pay the price or you haggle with them before the deal is done. Working with a lawyer is no different - if you want a lawyer to represent you, you will need to discuss what they will charge and how and when you will be billed. Maybe it will be a lump sum, maybe you will be billed based on hourly rates, and maybe it will be done on a contingency basis. Maybe you have to pay a large retainer, maybe you will be billed monthly, etc.

As to your more general question, if you find yourself struggling with understanding an aspect of a passage that seems like more than just a minor detail, it would be wise to consider skipping that passage altogether and coming back to it for a second look after you have finished the other passages. Then, use context clues and your own general understanding of how the world works. Don't assume anything too complex! Generally, when in doubt, the simplest explanation is the best one. In this case, the simplest interpretation of that sentence that troubled you is probably just "don't do this if there is any other option you could choose." That doesn't require any understanding of when the choice is made, but only that you should have considered and rejected every other option before arriving at this decision.

Keep it simple, and choose your battles wisely! It's okay to do the passages out of order, so never allow yourself to get stuck in any part of the test.

[gmsanch3]

Hello,

I thought I understood everything until I got to line 49 “More importantly, the primary reasons for entering into contingency fee agreements hold for all clients.” That sentence threw me off entirely. I thought the author might have shifted his VP to actually agreeing with contingency fees. I don’t see how the 3 things the author lists after this sentence holds for all clients? Isn’t it just the clients who cannot afford the attorney who benefit? This really confused me and I spent about 2-3 minutes reading and re-reading this last section. Can someone please help me understand this better?

[Adam Tyson]

In the last two paragraphs, gmsanch3, the author is arguing against the restrictions proposed by the LRCWA. The author thinks that contingency fees should be more broadly available, not just for clients who cannot otherwise pay and after all other options have been considered and rejected. In the line you cited, the author is continuing her attack on the proposal. This isn't a shift in the author's viewpoint, but is her only viewpoint. The overall structure of the passage might be described as "Here's what was proposed, and their argument in favor of their proposal, but they are wrong, and here's my argument against it." This is actually a pretty common structure for a lot of RC passages!

Read it again, and you'll see that in the first two paragraphs the author is not arguing against contingency fees. She's telling you that the LRCWA is against them, and then telling you why the LRCWA is wrong.