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Understanding Contingency Fee Agreements

It's a well-known fact that legal proceedings can become very costly, especially when your lawyer is charging by the hour. 

Some law firms will even choose to bill clients hourly in efforts to extract higher fees, and in some cases, over-bill clients.

So what exactly is a contingency fee? And how does it differ from traditional legal fee arrangements?

In this article we'll discuss the advantages and disadvantages of contingency fees. How they are calculated, and which cases are suitable for these types of agreements.

What is a Contingency Fee?

A contingency fee is a type of payment structure in which a lawyer only receives payment if they win or settle a case.

In other words, the client is risk free. Because the fee is “contingent” on the outcome of the case. If the case is not won, the client does not owe any fees to the law firm or courts. Not only does this type of agreement eliminate the risk for the client, it provides an incentive for the attorney to excel and reach the highest settlement possible. 

In this arrangement, the lawyer agrees to take a portion of the settlement in the case, as their payment or fee. Rather than billing the client upfront and charging hourly.

Advantages of Contingency Fees

When looking at the macro outlook of these agreements, the advantages certainly outweigh the disadvantages 

For Example:  

  • No upfront fees: As mentioned, the client does not have to pay any fees upfront, which can be a huge relief for those who may not have the financial resources to pay for legal representation.
  • Motivation for the lawyer: With a contingency fee arrangement, your attorney has a vested interest in the outcome of the case. If the case is not successful, your attorney does not get paid.
  • No risk for the client: If the case is not won, the client does not need to pay the lawyer anything. This can provide peace of mind for clients who may be concerned about the financial risks of taking legal action.

Disadvantages of Contingency Fees

Contingency Fees aren't always the best bet for some clients. While there are several benefits to using a contingency fee arrangement, there are also some potential drawbacks. 

  1. Reduced Client Control: When a lawyer is working on a contingency fee basis, they may prioritize cases that are more likely to result in a settlement or award, rather than cases that the client feels are most important. Some cases may be outright denied or taken with a higher contingency fee depending on the risk assessment. 
  2. Limited Case Availability: Not all types of legal cases are suitable for a contingency fee arrangement. For example, criminal cases and family law cases are typically not eligible for contingency fees.
  3. You Could Make Less: In some cases, contingency fees may end up in a smaller payout for the client. If the case is resolved relatively quickly it may have been more beneficial to pay an attorney hourly rather than on a contingency basis.

Types of Cases Suitable for Contingency Fees

Not every case is governed by these agreements. It is imperative to note that in certain legal matters, such as criminal cases or matters pertaining to child custody, divorce settlements or other family law cases, contingency fee arrangements may be prohibited.

Contingency fees are most commonly used in personal injury cases, but there are several other types of cases that use these agreements as well

Such as :

  • Medical malpractice
  • Product liability
  • Class action lawsuits
  • Employment discrimination
  • Environmental lawsuits

How Contingency Fees are Calculated

Typically Contingency Fees Vary between 33% and 40% of the award or settlement. Some may even be as low as 25%. 

The fee percentage can vary depending on the complexity of the case, the lawyer's experience and the overall strength of the case. 

At West Coast Trial Lawyers we offer a transparent breakdown of our fees which are agreed upon between the client and the lawyer before the case begins. 

It is important to discuss the contingency fee arrangement with your lawyer and understand the deciding factors that may influence your agreement.

Contact The Best Personal Injury Lawyer In California

By allowing lawyers to get paid if a case is successful, contingency fees motivate lawyers to work diligently to get the best possible outcome for their clients. If you are considering using a contingency fee agreement for your legal case, it is important to thoroughly understand the terms of the agreement and to choose a reputable and experienced attorney, like those at West Coast Trial Lawyers. 

Contact our firm today at 888-539-9582 for a free consultation to discuss your case and map a contingency fee that benefits both parties.

When you work with West Coast Trial Lawyers, you can be confident that your case will be handled professionally and effectively, giving you peace of mind during a difficult time.

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