Tex. Gov't Code Section 2254.106
Contract Requirements: Computation of Contingent Fee; Reimbursement of Expenses


(a)

The contract must establish the reasonable hourly rate for work performed by an attorney, law clerk, or paralegal who will perform legal or support services under the contract based on the reasonable and customary rate in the relevant locality for the type of work performed and on the relevant experience, demonstrated ability, and standard hourly billing rate, if any, of the person performing the work. The contract may establish the reasonable hourly rate for one or more persons by name and may establish a rate schedule for work performed by unnamed persons. The highest hourly rate for a named person or under a rate schedule may not exceed $1,000 an hour. This subsection applies to subcontracted work performed by an attorney, law clerk, or paralegal who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm as well as to work performed by a contracting attorney or by a partner, shareholder, or employee of a contracting attorney or law firm.

(b)

The contract must establish a base fee to be computed as follows. For each attorney, law clerk, or paralegal who is a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm, multiply the number of hours the attorney, law clerk, or paralegal works in providing legal or support services under the contract times the reasonable hourly rate for the work performed by that attorney, law clerk, or paralegal. Add the resulting amounts to obtain the base fee. The computation of the base fee may not include hours or costs attributable to work performed by a person who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm.

(c)

Subject to Subsection (d), the contingent fee is computed by multiplying the base fee by a multiplier. The contract must establish a reasonable multiplier based on any expected difficulties in performing the contract, the amount of expenses expected to be risked by the contractor, the expected risk of no recovery, and any expected long delay in recovery. The multiplier may not exceed four without prior approval by the legislature.

(d)

In addition to establishing the method of computing the fee under Subsections (a), (b), and (c), the contract must limit the amount of the contingent fee to a stated percentage of the amount recovered. The contract may state different percentage limitations for different ranges of possible recoveries and different percentage limitations in the event the matter is settled, tried, or tried and appealed. The percentage limitation may not exceed 35 percent without prior approval by the legislature. The contract must state that the amount of the contingent fee will not exceed the lesser of the stated percentage of the amount recovered or the amount computed under Subsections (a), (b), and (c).

(e)

The contract also may:

(1)

limit the amount of expenses that may be reimbursed; and

(2)

provide that the amount or payment of only part of the fee is contingent on the outcome of the matter for which the services were obtained, with the amount and payment of the remainder of the fee payable on a regular hourly rate basis without regard to the outcome of the matter.

(f)

Except as provided by Section 2254.107 (Mixed Hourly and Contingent Fee Contracts; Reimbursement for Subcontracted Work), this section does not apply to a contingent fee contract for legal services:

(1)

in which the expected amount to be recovered and the actual amount recovered do not exceed $100,000; or

(2)

under which a series of recoveries is contemplated and the amount of each individual recovery is not expected to and does not exceed $100,000.

(g)

This section applies to a contract described by Subsection (f) for each individual recovery under the contract that actually exceeds $100,000, and the contract must provide for computing the fee in accordance with this section for each individual recovery that actually exceeds $100,000.
Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999.

Source: Section 2254.106 — Contract Requirements: Computation of Contingent Fee; Reimbursement of Expenses, https://statutes.­capitol.­texas.­gov/Docs/GV/htm/GV.­2254.­htm#2254.­106 (accessed Feb. 22, 2024).

2254.001
Short Title
2254.002
Definitions
2254.003
Selection of Provider
2254.004
Contract for Professional Services of Architect, Engineer, or Surveyor
2254.005
Void Contract
2254.006
Contract Notification
2254.007
Declaratory or Injunctive Relief
2254.008
Contract for Professional Services of Physicians, Optometrists, and Registered Nurses
2254.021
Definitions
2254.022
Interpretation of Subchapter
2254.023
Applicability of Subchapter
2254.024
Exemptions
2254.025
Emergency Waiver
2254.026
Contract with Consultant
2254.027
Selection of Consultant
2254.028
Notice of Intent: Major Consulting Services Contract
2254.029
Publication in State Business Daily Before Entering into Major Consulting Services Contract
2254.030
Required Disclosure and Itemization of Certain Expenditures Relating to Lobbying Activities After Entering into a Consulting Services Contract
2254.0031
Indemnification
2254.031
Renewal
2254.032
Conflicts of Interest
2254.033
Restriction on Former Employees of a State Agency
2254.034
Contract Void
2254.035
Dividing Contracts
2254.036
Archives
2254.037
Reports
2254.038
Mixed Contracts
2254.039
Comptroller’s Rules
2254.040
Procurement by Comptroller
2254.041
Distribution of Consultant Reports
2254.101
Definitions
2254.102
Applicability
2254.103
State Governmental Entity: Contract Approval
2254.104
Time and Expense Records Required
2254.105
Certain General Contract Requirements
2254.106
Contract Requirements: Computation of Contingent Fee
2254.107
Mixed Hourly and Contingent Fee Contracts
2254.108
Fee Payment and Expense Reimbursement
2254.109
Effect on Other Law
2254.110
Void Contract
2254.151
Definition
2254.152
Applicability
2254.153
Contracts for Legal Services Authorized
2254.154
Attorney General
2254.0301
Contract Notification
2254.1032
Political Subdivision: Selection of Provider
2254.1034
Political Subdivision: Indemnification
2254.1036
Political Subdivision: Contract Notice
2254.1037
Political Subdivision: Contract as Public Information
2254.1038
Political Subdivision: Attorney General Review of Contract

Accessed:
Feb. 22, 2024

§ 2254.106’s source at texas​.gov