It is a basic tenet of contract law that oral contracts, or “handshake deals”, are just as enforceable as written contracts. However, it is also a basic tenet that one should never enter a long-term agreement based on an oral contract. Over time, parties to a contract may forget, misremember, or just plain lie, as to what they thought the agreement covered. However, these handshake deals are how most Hollywood lawyers enter agreements with their clients.
Now, thanks to Johnny Depp, there’s another reason to avoid these handshake deals. Depp is seeking a full refund of the estimated $30 million he has paid in commission over the years to his attorney based on a handshake deal. A California judge recently ruled that Johnny Depp's oral agreement with his former lawyer is voidable at the actor's discretion because his attorney’s fees were "directly linked" to the actor's success, which isn't guaranteed and therefore considered contingent, in violation of a California law that requires lawyers get contingency fee agreements in writing.
Even though this case arose in California, New Jersey practitioners should be forewarned because New Jersey Rule of Professional Conduct 1.5 provides an identical requirement for written contingency fee agreements.
For more information, see here and here.