What Is a Contingency Fee?

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book on law on beige backgroundGavel, handcuffs and book on law on beige background

A contingency fee is a method of payment to a lawyer from a client. The amount of the fee is a pre-arranged percentage of the award or settlement that the lawyer wins for the client. When a contingency fee arrangement is in place, the client does not have to pay the lawyer an upfront fee for his or her services. Some attorneys will charge for certain expenses and expect payment for them before the case is concluded, while other attorneys include expenses in the contingency fee.

Under a contingency fee arrangement, if the lawyer does not win a settlement or lawsuit for the client, then the client will not have to pay the lawyer, except for expenses, if that was part of the retainer agreement. Otherwise, the client will owe nothing if no payment is awarded to them. Common expenses are:

  • Court filing fees
  • Deposition costs
  • Copying costs of medical records or reports

When Contingency Fee Arrangements Are Common

Not every attorney will work on a contingency fee basis. Attorneys who do accept contingency fees most often will not do so for every type of case or legal area. Most often these agreements are used for:

  • Personal injury cases: car accidents, boat accidents, work accidents, slip and fall accidents, etc.
  • Worker’s compensation claims.
  • Defective products or services that caused an injury: automobile parts, plastic surgery medical malpractice, etc.
Additional Legal Areas in Which Contingency Fee Arrangements are Sometimes Used

If you are in need of an attorney who accepts a contingency fee for any of the below services, you may have to contact one or more legal firms to find one:

  • Collection of substantial debts
  • Hourly wage issues and employment law
  • Real estate transactions
  • Commercial business-involved lawsuits

Legal Areas in Which Contingency Fees are Not Available

  • Adoption
  • Criminal case defense (murder, drug, DUI, etc.)
  • Immigration
  • Family law (divorces, etc.)
  • Bankruptcy
  • Starting a new business (filing for a license, tax registration, etc.)
  • Contracts (drafting a will, trust, etc.)
  • Copyright, trademark, or patent registration

How Contingency Fees are Determined

Though contingency fees are usually a pre-determined percentage of the settlement amount or jury award, the percentage is not a universal number. It can vary from one law firm to the next, and even from one case to the next. A number of factors influence what an attorney will determine is a fair percentage. Factors include:

  • Expert witness fees
  • Transcript fees
  • Mediation fees
  • Court filing fees
  • The anticipated number of hours and difficulty of preparing the case for a settlement and potential jury trial, which will greatly vary by case)
  • Time limitations of the case and its priority level
  • The lawyer’s experience and ability to handle the case

For more information, or to speak with someone about your case, contact a local attorney today.

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