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Court reduces attorney's contingent fee in Social Security disability matter

The Sixth Circuit recently upheld a trial judge's reduction of an attorney's contingent fee claim in a Social Security Disability matter.  The case is Patrick S. Lasley v. Commissioner of Social Security.  The attorney, Mark Naegel, had sought the recovery of the full statutory contingent fee (25%) with his client's approval.  The Commissioner rejected this fee as a "windfall" and reduced it by half.  The District Court upheld the Commissioner's action. 

The Sixth Circuit approved, holding that the attorney had not upheld his burden of showing that the fee sought was reasonable for the services rendered.  It emphasized that the fee amounted to an hourly rate of $733.00 per hour, although the Court acknowledged that this is only one factor to be considered where the attorney is representing clients on a contingent fee.  It pointed to "conservative" hourly fees approved previously by the Court and the relative simplicity and brevity of the representation.

The Court did not discuss the fact that contingent fees are designed to allow prevailing clients' fees to enable attorneys to give all meritorious claims representation (i.e., the contingent fee system normally acknowledges that the client cannot pay for services up front, and therefore the attorney takes some risk by advancing services without pay, and sometimes "the winners pay for the losers' representation").

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