Understanding Contingency Legal Representation

Contingency fee arrangements between lawyers and their clients have not always been looked upon with favor. At one time, states banned the use of contingency representation as contributing to excessively high legal fees. Now, contingent fee arrangements are accepted as a way for people who cannot afford attorney's fees gain access to the legal system.

What is a Contingent Fee?

Contingency representation is an agreement in which an attorney takes on a case with no fee paid until the case is successfully completed. The lawyer's fee is usually a percentage of the amount recovered on behalf of the client after deduction of expenses and costs. Some states limit the amount a lawyer can charge to 25 or 30 percent of the recovery.

Does a Contingency Fee Agreement Include Expenses?

Expenses and costs are usually advanced by the lawyer, but are not part of the contingency arrangement. Even if the case is lost, the client is still responsible for payment of the expenses and costs. Expenses can be substantial, depending upon the type of case. Doctors called as expert witnesses in personal injury cases expect to be paid for their time in court. These witness fees alone can be several thousand dollars for each doctor.

What Types of Cases are Eligible for Contingency Fee Representation?

The vast majority of contingent fee cases are personal injury actions, but other cases where a sum of money is recovered for a client can have contingent fees. The reality of contingent fee representation is that an attorney must believe the outcome of the case will provide enough money to compensate the lawyer and the client.

What Types of Cases Cannot be Handled on a Contingent Fee Basis?

All states place restrictions or controls on the use of contingent fees. The following are some of the most common restrictions:
• Contingent fee agreements must be in writing and signed by the attorney and client
• Cannot be used in criminal or matrimonial (divorce) cases
• Set limits on the percentage of the recovery an attorney can charge
• Require the filing of all contingent fee agreements with the state
• Require the filing of a closing statement at the conclusion of the case showing the amount recovered, total expenses, the lawyer's fee and the amount paid to the client

What are the Dangers of a Contingent Fee Arrangement?

Clients must understand that the lawyer has taken on the case knowing the risk of possibly not being paid a fee if the outcome is not favorable to the client. The expenses and costs advanced by the attorney must be repaid regardless of the outcome of the case. A person must understand this before entering into the fee agreement with the lawyer.

Peter Wendt is a writer and researcher living in Austin, Texas. Over the years he has become an authority on personal injury attorney in Chicago. If you would like to learn more about this subject, then the author recommends a visit to Willenslaw.com.

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