Hiring An Attorney On A Contingency Fee Basis
It is an unfortunate fact of life that some of us will one day find ourselves in a situation where we’ll need a lawyer. Maybe we’ve been injured by someone crashing their car into us or putting a defective product into the marketplace. Maybe we’ve lost a loved one because another chose not to follow basic safety rules. Maybe we’ve been cheated out of our hard-earned money by some unscrupulous corporation. As a lawyer, I hear about terrible situations like this all the time. And a lot of times, these calls come months after the inciting event, which often prompts me to ask the caller why they waited so long to reach out to an attorney. And the answer I hear the most, by far, is some variation on “well, I just don’t have the money for a lawyer.” If you ever find yourself in a similar situation, it may be because you’re not familiar with the “contingency fee” agreement.
The contingency fee agreement is a mechanism that allows anyone, regardless of income, to hire an attorney and bring a lawsuit, if necessary, when the circumstances justify legal protection. Under a typical contingent fee agreement, the "contingency" is usually the recovery of money, or something of value, for the client. If that contingency/recovery does not occur, then the client owes the attorney and the law firm nothing for the firm’s time and effort, or the litigation costs, in seeing the case through to its conclusion. Under the contingency fee agreement, the law firm takes all the risk, and the client is not out any money to pursue their right to justice.
Contingency fee arrangements offer a number of additional benefits. First, they give injured or wronged people of moderate financial means a fighting chance in the courtroom against the world’s most powerful corporations and insurance companies. Next, contingent fees help to weed out frivolous lawsuits by discouraging attorneys from presenting claims that have negative value or otherwise lack merit. Experienced lawyers will not waste their time on a lawsuit that does not have enough merit to justify investment of their time.
Contingent fees also lock together the lawyer’s incentive with positive results for the client, because the lawyer’s pay is directly proportional to results obtained for the client. A lawyer who will not be paid unless the client is successful is highly motivated to get the optimal result for her client. In contrast, an hourly fee arrangement can encourage unnecessary action, inefficiency and delay to churn fees for the lawyer. Law firms with an hourly rate business model often set billable hour quotas for their attorneys, which often incentivizes the lawyers in a manner that oftentimes does not align with client outcomes.
Contingency fee arrangements also encourage spending efficiency. Litigation expenses can be prohibitively high for injury victims. Law firms like Bordas & Bordas advance the expenses of the lawsuit (including things like filing fees; medical records and document collection; the hiring of expert witnesses, court reporters and videographers; travel costs, etc.) and absorb those costs if a client loses their case. Knowing they will get that money back only if their client wins, contingency fee lawyers are motivated to be prudent and cost-effective, spending only the money necessary to obtain the best result.
Finally, the contingency fee has an implicit benefit for the client. This arrangement gives the client confidence that their lawyer believes in their case, is invested in their case, and will do their best work to obtain a positive resolution. Faith in the case, and the desire to fight for the client, may not always be present when hourly payment is guaranteed regardless of outcome. So if you ever find yourself in the unfortunate predicament of needing a lawyer and thinking you cannot afford it, remember the contingency fee arrangement, and speak to an experienced law firm who offers that method of payment.
It is an unfortunate fact of life that some of us will one day find ourselves in a situation where we�ll need a lawyer. Maybe we�ve been injured by someone crashing their car into us or putting a defective product into the marketplace. Maybe we�ve lost a loved one because another chose not to follow basic safety rules. Maybe we�ve been cheated out of our hard-earned money by some unscrupulous corporation. As a lawyer, I hear about terrible situations like this all the time. And a lot of times, these calls come months after the inciting event, which often prompts me to ask the caller why they waited so long to reach out to an attorney. And the answer I hear the most, by far, is some variation on �well, I just don�t have the money for a lawyer.� If you ever find yourself in a similar situation, it may be because you�re not familiar with the �contingency fee� agreement.