Q21

[lhermary]

How on earth is the answer b?

The LRCWA's recommendation is that an uplifting fee be introduced, where a client pays a bonus if successful.

B talks about reducing a companies operating expense.

It just seems far off.

[demetri.blaisdell]

lhermary,

Thanks for your question. The key to know about uplift fee arrangements is that they are a special type of contingency fees. In all contingency fee arrangements, the lawyer only gets paid if she wins (Lines 7-8). The special thing about uplift fees is that instead of getting a percentage of the winnings, the lawyer gets his fee plus a bonus if he wins (Lines 14-17). Presumably, this is to compensate for the times where the lawyer doesn't win.

(B) gives us an analogous program: the consulting firm doesn't get paid if they don't save the company money (like all contingency fees). But if they do, they don't just get their usual fee but a big bonus (presumably to compensate for the times that they can't save the company and don't get paid at all).

And the wrong answers:

(A) is about groups coming together to share costs. That's not part of a contingency fee arrangement.

(C) again is about joining together to split the risk (and getting the rewards in proportion to the amount of risk). Not like an uplift fee at all.

(D) is about making a prediction about the likelihood of the event. Lawyers don't decide the percentage chance a lawsuit has of winning and adjust their fees accordingly.

(E) is about getting an insurance policy to guard against a future risk. Lawyers would love to be able to buy "losing insurance" but I haven't heard about anybody offering to sell it.

I hope this helps. Let me know if you have any further questions.

Demetri

[kaseyb002]

I guess I understood this wrong, but it seems like the passage is saying how contingency-fee arrangements usually work (all-or-nothing), and the uplift fee is meant to make there is at least a baseline amount whether or not the lawyer wins. If the lawyer does win, then the lawyer some bonus amount, just not the ridiculous amount they would win with a normal contingency fee arrangement.

If that's how it is, then E seems perfect because the seller (the lawyer), makes sure the buyer gives some insurance so that the seller will get some baseline amount of money in case the loan doesn't get paid off (or in case the lawyer doesn't win).

[maria487]

Why can we eliminate D as an answer choice? I thought that "likelihood and magnitude of an eventual loss covered by insurance policy" was a fairly good match for "lawyer's risk of financial loss" (line 9).

More generally, I like to reference other parts of the passage in reaching an answer choice. I know that the passage explicitly refers to lines 13-17, but I also referenced paragraph 1 for the general definition of contingency fee agreements for this question. Is this wise, or should I just stick to explicitly mentioned reference points?

[ohthatpatrick]

The question stem tells us how much of the passage we could / should consider. So for some questions, you may want to / need to consider other parts of a passage. For other questions, they are asking us about a very narrow portion of the passage, so bringing in other parts of the passage wouldn't serve us well and could potentially make us more tempted by trap answers (many trap answers just grab a phrase uttered somewhere else in the passage).

This question stem wants an analogy to the LRCWA's recommended uplift fee. That only appears in lines 12-17, so that's the only info we need to answer this question. General thoughts about uplift fees are of no concern to us, because the question only cares about matching the LRCWA'S.

So, we just remind ourselves what their uplift fee arrangement was:
IF SUCCESSFUL, then normal fee + agreed upon bonus percentage.

It's hard to match any part of (D) to that formula. What does "success" even mean in terms of an insurance policy?

Where do we see "normal" fee or predetermined bonus?

I think you should use this question to remind yourself that if a question stem gives you specific keywords, they're usually testing you on your ability to find THAT narrow slice of the passage. Just find that slice and find the closest match in the answer choices.

The good news is that the correct way to approach this question is much tighter / easier / more efficient than your "cast a wide net" sort of approach.

Good luck.