There has been a lot of talk about lawyers making billions of dollars from the tobacco deal. How does this work and what will they make?
The tobacco deal is no different from many other deals negotiated by plaintiff’s lawyers, except for its size. Attorneys who have brought suit to recover state and federal Medicaid expenditures will get contingency fees of between 3 and 33 percent, with most getting between 10 to 25 percent. For example in Texas, Attorney General Dan Morales and his attorneys got $2.3 billion. They secured a record $15 billion settlement with the nation’s major cigarette makers. In Florida, attorneys stand to make $3 billion. The basic idea is that plaintiff’s attorneys put up all the money to try these risky types of cases. Because they are taking such a big risk, they can negotiate huge fees should the cases pay off. In the event of a national settlement of the tobacco cases, which could be as much as $500 billion, the plaintiff’s lawyers would collect a percentage of the negotiated settlement, usually based on how much time and effort they put into the case. A number of people including George Bush,
