Contingency Fee
A contingency fee is a special fee arrangement for personal injury lawyers. Under a contingency fee arrangement, a lawyer’s fee is contingent on the outcome of the case. If the lawyer wins the case, the client pays a percentage of the damages. If they lose the case, the client is not obligated to pay the fee at all.
Contingency fees can greatly benefit both clients and lawyers. The Rules of Professional Conduct govern them. However, they are distinct from traditional fee structures. Before engaging a personal injury lawyer, you should learn about the contingency fee arrangements.
What Are The Benefits Of A Contingency Fee?
Contingency fees tend to benefit both clients and their attorneys.
No Money Up Front
The main benefit is that clients are not obligated to pay any money upfront. They don’t pay their attorney until the end of the case, which is incredibly beneficial to personal injury victims.
Most victims struggle to pay increased expenses after an accident. These could include costly medical bills combined with decreased income from missing work. Many people in this situation cannot afford to pay an expensive retainer just to get legal advice.
Since a personal injury client doesn’t have to pay anything upfront, or even as the case progresses, it lets people access justice that they could not otherwise afford. This means that more people can get the legal help they deserve, regardless of their financial situation.
Payment Is Proportionate To Damages
A second benefit is that the attorney’s payment is always proportionate to the damages. At the end of the case, the attorney will take a percentage of the settlement or jury award as their fee.
This means that the client doesn’t have to worry about making the payment. Furthermore, they can always afford to pay their lawyer because the money comes directly from the money that they won.
Aligns The Attorney And Client Interests
In a contingency fee arrangement, the attorney’s and client’s interests are aligned since the client only pays the lawyer if the lawyer wins the case. This is unlike other situations where a lawyer may charge their client expensive hourly rates to complete busy work.
Contingency fees motivate lawyers to work as hard as possible on their clients’ cases and to recover the full extent of damages. Attorneys understand that if the client loses, they will not be compensated for any of their work on the case, which is a huge risk to them.
What Are The Drawbacks Of A Contingency Fee?
The main drawback of a contingency fee is that a client may feel that they pay a large percentage of their damages. Since they aren’t paying their attorney as the case progresses, the lump sum payment at the end of the case may feel like a lot. However, ultimately, it comes out of money that the client would not otherwise have had.
How Much Is A Contingency Fee?
A contingency fee may vary from lawyer to lawyer and case to case. In North Carolina, a contingency fee is usually about one-third of the damages.
Some factors that may impact a contingency fee are:
- The complexity of the case
- Lawyer’s experience
- Whether or not the case goes to trial
- If the case settles outside of court
- Risk for the attorney
- Predicted case expenses
- Estimated damages
Generally, lawyers charge more for complicated cases that are expected to go to trial or drag on for a long time. This is because attorneys know they will have to do more work. It also increases the risk for the lawyer that they may lose and not get paid.
On the other hand, a lawyer may charge less for simple cases that are expected to settle quickly outside of court. These may include run-of-the-mill car accident insurance claims, for example.
What Is Included In A Contingency Fee?
Many people are surprised to learn that a contingency fee doesn’t necessarily include all payments. Some lawyers have certain expenses that are not covered by a contingency fee. It is important to speak directly to your attorney about what is and is not included so that you aren’t caught off guard at the end of the case.
For example, it is common for an attorney to bill clients separately for case expenses like:
- Filing fees
- Expert witness fees
- Record request fees
- Travel expenses
- Investigation or deposition costs
Many lawyers include these fees in their contingency fee agreements. However, you should always be clear with your attorney and make sure that you understand what fees and costs are covered.
Ultimately, you have the right to negotiate with an attorney to find a fee arrangement that fits your needs. Some lawyers will not change their structure, but others may have some flexibility. It is worth discussing the contingency fee in detail during the initial consultation to make sure that you and your lawyer are the right fit. Contact our Charlotte law firm Chandler Volta Personal Injury Lawyers for a free consultation. Call us today at (704) 980-9999.
