Under a contingency fee arrangement, clients do not pay their attorneys unless they win their case. For some arrangements, clients may still need to pay expenses and court costs, but in many arrangements the law firm will advance all legal costs until a case is settled or won.
Contingency fees are typically seen in personal injury cases. Car accident, premises liability, defective product, and malpractice claims are frequently conducted on a contingency fee basis. Other types of claims may be handled on a contingency basis in certain circumstances. However, contingency fees are never available for criminal law, immigration, or family law cases.
What is a typical contingency fee?
A typical contingency fee ranges from 33-40% of the total amount won by a plaintiff. However, fees can vary widely based on the particular facts of a case. The time an attorney expects to work, the amount of the potential award, and the overall strength of a case are all factors that the attorney will need to consider.Benefits of a contingency fee arrangement:
- Contingency fee arrangements give access to justice for plaintiffs that are unable to afford to pay an hourly rate or flat fee to their attorney upfront.
- Because a law firm knows it will only get paid if it wins your case, it will only agree to represent you if the firm’s attorneys feel very strongly that you can win. Therefore, if a firm agrees to represent you on a contingency basis, you can rest easy knowing that your attorney fully believes in the validity of your case.
Detriments of a contingency fee arrangement:
- A fair contingency fee is based on the law firm’s best-guess as to what is likely to happen in a case. But, sometimes outcomes can be unexpected. For instance, if an attorney can settle a case more quickly than anticipated, he may gain a large contingency fee for a mere few hours of work. In other circumstances, a case can drag on far longer than an attorney expects and end up costing the attorney far more than the contingency fee was worth. Both clients and attorneys thus take on some risk that a contingency fee may, in hindsight, seem unfair.
- Contingency fees can sometimes cost more in the end. With these arrangements, attorneys are absorbing the risk that their client may lose or be unable to collect their judgment. Despite a high likelihood of success in contingency fee cases, every once in a while, an attorney puts forth time and energy into a case and ends up getting paid nothing. To offset these losses, law firms need to charge more for contingency fee cases.
