Published by FAPIA on October 19, 2017. view article here http://campaign.r20.constantco…
Beware of Offers That Are Too Good To Be True
Some attorneys have been offering public adjusters “free services” by way of non-contingency fee contracts with fees paid directly by the carrier.
These deals are bad for so many reasons. While they may seem nice and glamorous they are so bad for insureds and so bad for public adjusters. These lawyers will always have their best interests and their pocketbook in mind and not the clients. That is wrong. They will settle cases ONLY when their hours in the case are high enough to justify the time and expense of a fee hearing or when they get enough for their fees from the carrier, which can delay a reasonable settlement for the insureds. In these situations, the lawyers must negotiate their fees separately from the indemnity payment to the insured and that puts them in a conflict of interest with their client. What if the indemnity settlement offer is good, but the lawyer doesn’t think he/she is being paid enough in fees? Well, the case doesn’t settle and the insured gets the short-end of the stick and you don’t get paid. Let’s say the lawyer negotiates an acceptable payment for indemnity for the client and an acceptable fee for themselves, they cannot share fees with PAs per Fla Bar rules so you only get paid on the indemnity portion of the settlement and not the whole settlement. For example, every case I settle on a contingency fee basis includes my fees. If we settle for 100k globally, for example, your fee is $20,000 (assuming a 20% of $100k). If you hire one of these lawyers, if the case settles for 100k, 70k in indemnity and 30k in fees, you only get 20% of $70k, which is $14k, $6K LESS that what you would have received had the deal been negotiated on a global basis, inclusive of fees. These deals are bad for your clients and bad for you. Your fees will be cut and payment of your fees will be delayed. In addition, since you are only paid on the indemnity portion of the claim, all of your fees are going to mortgage companies and none of your fees will be paid in cash out of the lawyer’s trust account. So, your fees, when you are paid them will be tied up with the mortgage company on every file. These deals put lawyers in a direct conflict of interest with their clients, put lawyers interests ahead of those of the insureds, and at the same time holds your fees up until the lawyer thinks he/she has made enough money and commingles your fees with the mortgage co on every single file.
Don’t fall for it. This is bad news for policyholders and bad news for you.