Is my lawyer being fair with his fees?

It is common for lawyers to take their fee of 1/3 or whatever off the top. I consider it part of my job to earn my fee to reduce my clients' medical bills and I do NOT charge extra for getting reductions in the medical bills. I can't speak for Washington state, but in Las Vegas where I practice I would say that most personal injury attorneys do not charge extra for getting reductions in medical bills. However, when I first came to Las Vegas to start my career I worked for a firm whose standard retainer agreement did charge extra, like your attorney, for reducing medical bills. In Nevada, at least, attorneys are free to charge extra for that providing that the total fee is not unreasonable, whatever that means. On my website referenced below I discuss what to look for in a fee agreement in a personal injury or accident case and the issue you discuss is a point I raise in that guide. In addition, I am a member of the Nevada Justice Association (trial lawyers who represent accident victim plaintiffs) and we consider it unethical for an attorney to take a larger fee than the client nets after deduction for medical bills. But this is just a voluntary guideline of the Nevada Justice Association and is not a national or state ethical standard. As you know, what is "fair" is subjective. However, you should check with a Washington state attorney to see if there is any Washington state rule or law that applies to your case.

This would be a very common agreement in a contingency fee arrangement.

An attorney's fees must be reasonable in accordance with the Rules of Professional Conduct (RPC) 1.5. http://www.courts.wa.gov/court_rules/?fa=court_rules.display&group=ga&set=RPC&ruleid=garpc1.05.