What Is A Contingent Fee; How Does It Work When Hiring a Lawyer

Categories: Blog

Attorney Fee Overview

Hiring an attorney to represent you is a serious decision.  There are several different fee arrangement you can make with your attorney.

A flat fee means you pay the attorney a fixed sum of money and he does a predefined scope of work on your behalf. This kind of arrangement works well for smaller assignments such as traffic tickets.  Most criminal cases are also done on a flat fee basis.

Attorneys also do work on an hourly basis charging clients by the hour at an agreed hourly rate. Most family and domestic cases are done on an hourly basis. Occasionally it is possible to combine several types of fees. An example would be a flat fee up front and a reduced contingent fee based on the amount collected.

Most personal injury matters are handled on a contingent fee basis.  Items that many attorneys consider taking on a contingent fee basis include auto accidents, medical malpractice, workman’s compensation, Social Security disability, defective products, dog bites, slip and falls, and assault. A contingent fee arrangement provides that the client pays no money to hire the attorney and the attorney is paid a percentage of the amount collected from a third party. Most contingent fee arrangement provides for a certain percentage if the case is settled before suit is filed and a higher rate if it is necessary for the attorney to file suit on behalf of the client. Many agreements also provide an increased percentage fee if the matter is taken to an appeal.  Attorneys are prohibited by ethics rules from accepting criminal cases or domestic cases on a contingent fee basis.

Who is responsible for the expenses incurred?

Clients are responsible for the expenses incurred in pursuing their claim. Most attorneys collect the expenses due from the client when the case settled or from the judgment collected from the other party. An attorney will keep a client informed as to the expenses they are likely to incur as the matter proceeds.

Who takes the risk in a contingent fee arrangement?

The attorney takes the risk that monies will be collected from a third party when he or she agrees to proceed on a contingent fee basis. A contingent fee allows clients to have access to legal assistance when they might not be able to afford paying an attorney on another basis. Attorneys look for clear liability and a source of funds when considering a contingent fee arrangement with a client.  If there is nothing collected the attorney does not get paid for his or her time. Some cases that look straight forward initially but can develop a problem that were unimaginable from the start. Contingent fees must be reasonable, or the attorney may face Disciplinary action.

What Does Hiring an Attorney on a Contingency Fee Basis Mean?

Hiring an attorney on a contingent fee basis to allow the client to access a qualified attorney without having to pay an upfront legal fee and generally the attorney will cover the out of pocket costs until the conclusion of the case.