Contingency fees are a type of payment arrangement used by lawyers in which the client only pays if they win their case. This payment plan is often used by people who cannot afford to pay for legal services upfront or by those who do not want to take on the financial risk of a potential loss.
Under a contingency fee arrangement, the lawyer agrees to take on the case and to receive payment only if the matter is successful.
What Are the Advantages of a Contingency Fee?
The use of a contingency fee can have several advantages for clients.
First and foremost, it can provide access to legal services for people who may not have the financial means to pay for legal services upfront. This can be especially important in personal injury cases where the damages are significant.
For example, a person who has suffered a serious injury in a car accident may be unable to work and facing significant medical expenses, making it impossible to pay for legal representation upfront. In such cases, a contingency fee structure allows the person to pursue a legal claim without having to pay for legal services upfront.
Secondly, the use of a contingency fee can incentivize the lawyer to work hard on the case and achieve the best possible outcome for the client. Because the lawyer’s payment is tied directly to the outcome of the case, they have a strong incentive to do everything in their power to win or obtain the best possible settlement. This can result in a better outcome for the client, both in terms of the amount awarded and the quality of representation.
Thirdly, the use of a contingency fee can provide a sense of security for the client. Knowing that they will only have to pay if they win can give peace of mind and reduce the stress associated with pursuing legal action.
What Are the Disadvantages of a Contingency Fee?
There are also some potential downsides to using a contingency fee arrangement.
One of the main disadvantages is that the percentage charged by the lawyer can be quite high. In some cases, the percentage charged can be as high as 40% or more.
This means that the client may receive a smaller amount of the settlement or damages than they would have received if they had paid for legal services upfront.
In addition, because the lawyer’s payment is tied directly to the outcome of the case, there may be a conflict of interest. Some lawyers may be more focused on winning the case than acting in their client’s best interests.
When Are Contingency Fees Allowed?
It is important to note that contingency fees are not allowed in all types of cases.
For example, contingency fees are generally not allowed in criminal cases. Some states have also placed limits on the percentage that lawyers can charge for contingency fees to prevent excessive fees.
You should speak with a lawyer and understand the specific terms and conditions of their fee agreement. You should also carefully consider the risks and benefits of using a contingency fee for your particular case.
Some of the factors to consider include:
- The likelihood of winning the case
- The potential damages or settlement
- The complexity of the case
- The lawyer’s experience
Keep in mind that not all cases are suitable for a contingency fee arrangement.
Contingency fees are typically used in personal injury cases and wrongful death claims. In these types of cases, the lawyer’s fee is a percentage of the amount awarded, which can be substantial. In cases where the damages or settlement are relatively small, a contingency fee may not be the most cost-effective option.
Contingency Fee Experience
An experienced lawyer will be able to explain their fee structure and the risks and benefits associated with using a contingency fee for your particular case. They will also be able to assess the merits of your case and determine whether a contingency fee is appropriate.
Thoroughly Review the Contingency Fee Agreement Before Signing
In addition to choosing an experienced lawyer, you should carefully review the fee agreement before signing it.
The agreement should outline the percentage that the lawyer will receive if the case is successful, as well as any expenses that the client will be responsible for. The agreement should also outline the circumstances under which the client will be responsible for paying case costs if the claim is unsuccessful.
Overall, a contingency fee can provide access to legal services for people who may not have the financial means to pay for representation. It can incentivize the lawyer to work hard on the case and to achieve the best possible outcome for the client.
Most Personal Injury Lawyers Work on a Contingency Fee Basis
If you’ve been injured in an accident caused by another party’s negligence, consider speaking with a personal injury lawyer. They’ll explain your legal options for compensation and provide guidance and advice on the best course of action. Most personal injury attorneys – including the ones at Curiel & Runion Personal Injury Lawyers – offer a free initial consultation and work on a contingency fee basis. That means there are no obligations, risks, or upfront expenses involved in getting experienced legal representation. If you’d like to learn more, contact our law firm by calling (602) 595-5559.