Stueve Siegel Hanson Sees Contingency Gamble Pay Off
Kansas City law firm Stueve Siegel Hanson LLP is rolling along on a string of high-profile cases and settlements that its partners think stem from a business plan hatched 10 years ago.
That model - representing business plaintiffs almost entirely on a contingency basis - was not common when the firm started a decade ago. But partner Norm Siegel said the dour economy has made the practice more attractive. Contingency fee cases normally are the province of personal injury suits, where an individual may not have the money to pay a lawyer's hourly fee, and so the plaintiff agrees to let the lawyer collect a percentage of a settlement or verdict.
"When you're paid by the hour, you can actually make more money by losing a case slowly than by winning quickly because pay is only a function of hours," Siegel said in an e-mail. "In our model, our interests are aligned with our clients' - which is often the light bulb moment for a CEO or general counsel considering this arrangement for the first time."
Teresa Woody, a former Stueve Siegel Hanson partner, said contingency fees can appeal to business plaintiffs for the same reason they appeal to individuals.
"It can be a way for them to get representation and try to get something the way they want without hourly fees, which is a help to entrepreneurial companies or businesses that are not able to pay business litigation rates," she said.
Woody left the firm in 2007 to start The Woody Law Firm PC, which emphasizes representing individuals.
Stueve Siegel Hanson generates 30 percent to 40 percent of its revenue from class-action work, about 10 percent from hourly defense work and the remainder from business plaintiff work.
The firm normally collects 30 percent to 35 percent of a verdict or settlement, and as much as 45 percent if the case goes through trial and multiple appeals.
Stueve Siegel Hanson represents Kansas State University in its effort to invalidate a contract with former football coach Ron Prince that was struck by former Athletic Director Bob Krause, unbeknownst to the school's administration.
The firm helped strike a $19.4 million settlement with H&R Block Inc. in May to end a class action alleging that the company misled consumers in the marketing of its Express IRA product.
Plaintiff firms got about $6 million. Class-action members stood to make back program fees paid to their Express IRA plus 5 percent annual interest.
H&R Block spokesman Gene King said in an e-mail that the company was pleased to have resolved the matter. The settlement does not imply wrongdoing by H&R Block.
July 23, 2010
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