Under this scheme, the only way to make more money as a law firm would be to increase your costs, so this creates an incentive to prosecute the case as expensively as possible.

The eventual endgame of this system would be that law firms’ costs should rise to eat as much of the settlement as possible, which leaves as little as possible for the actual victims.

A fixed percentage system creates an incentive to maximize the settlement (on behalf of the victims) and leaves the law firm to pay its own costs.