Arthur Andersen & Co. v. Perry Equip. Corp
In Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) the Texas Supreme Court intimated eight factors to consider when determining the reasonableness of attorney's fees. 945 S.W.2d at 818.
These factors are:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
(2) the likelihood . . . that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. Id.
The Court addressed a complaint that a trial court erred by awarding fees calculated as a percentage of recovery based on a contingent fee agreement. See id. at 817.
The supreme court was concerned that an award of attorney's fees based solely on the contingency contract did not take into account the factors regarding what constitutes a "reasonable" fee. See id. at 818.
The court stated that a contingency agreement alone was insufficient evidence of what was a "reasonable" fee and therefore could not support a fee award under a statute authorizing recovery of "reasonable" fees. See 945 S.W.2d at 818-19.
The court also stated that "a party's contingent fee agreement should be considered by the fact finder and is therefore admissible evidence." Id. at 818.
In Arthur Andersen, the supreme court declared that evidence of a contingent fee arrangement was "admissible" and "should" be considered by the fact finder. See id.
But the court did not mandate that such evidence must be admitted or considered.
The opinion in Arthur Andersen gives no indication that the supreme court intended to deprive trial courts of their discretion.
In Arthur Andersen, the supreme court did not state that the jury must be instructed regarding the factors but instead stated that the jury must be presented with evidence of the factors and instructed to award a dollar amount rather than a percentage. See id. at 819.