Benefits of an Attorney On Contingency: 8 Reasons Not To Pay Upfront

One of several methods that some attorneys use to charge clients is a contingency fee.  This is an arrangement whereby an attorney only bills a client if the client wins his or her case.  In that event, the attorney typically bills the client for a percentage of the moneys awarded.  It is common for the amount billed by the attorney to be one-third to forty percent of the amount the attorney secures for the client at the conclusion of a case, rather than for the amount billed to be totaled on an hourly basis with no regard to the amount awarded to the client.  The collection of money by the attorney, then, is contingent upon the recovery of either money or something else of value by the client.  In other words, if the client does not win his or her case, the attorney does not bill him or her for the attorney’s fees incurred.  This type of billing arrangement is most common in cases related to civil rights claims, personal injury,  medical malpractice, employment discrimination, unpaid wages, and the Fair Debt Collection Practices Act (FDCPA).  The advantages to a client of this arrangement are many.  Below find 8 benefits of an attorney on contingency.

1.  The client pays no out-of-pocket expenses for attorney’s fees.

This is of particular benefit to a client without the means to pay an attorney by the hour in order to see his or her case advanced.  Even if a client and his or her attorney are relatively certain that the client will win his or her case, it may still be difficult for a client under financial strain to pay the large legal bills that he or she may incur along the path to victory.  A contingency-fee arrangement eliminates this concern.  Please note that even if there are no attorney’s fees owed, the client may be responsible for the costs (filing fees, deposition fees, printing costs, etc.) associated with the action.

2.  Contingency fees may be negotiable.  

If an attorney is open to negotiating the contingency fees, the door may open for those who are financially unstable to bring cases that otherwise would not have advanced, thus granting access to legal assistance to men and women who would otherwise have been unable to access it.  Some attorney’s may also be willing to work on a Hybrid Fee agreement which means the attorney may bill at a reduced hourly rate and will also receive a lower contingency fee.

3.  There is no attorney fee due if a client does not win his or her case.

If a client is dependent upon the money that he or she is hoping that a judge or jury will award him or her in a case in order to pay the attorney, this is an ideal payment arrangement.

4.  Odds are improved that the attorney believes in the case.

If an attorney opens himself or herself up to the risk of non-payment that comes with trying a case on a contingency-fee basis, the chances that he or she believes that the client has a good claim. After all, if the client does not have a good chance of winning, then the attorney is working for free rather than working for another client with better odds.  This should give the client peace of mind that he or she has a good chance at winning, and that the attorney believes that the case should result in victory.

5.  An attorney working on a contingency-fee basis has the motivation to work as hard as he or she can to win the case.

In the event that an attorney takes a case on a contingency-fee basis that he or she believes will be an easy win, and then finds the case proving to be closer than he or she originally though, he or she will have every reason to work as hard as possible in order to ensure a favorable settlement or jury verdict.

6.  The attorney shares the risk of litigation.  

An hourly rate billing arrangement means that the client carries all of the risk of litigation, since he or she has to pay the attorney’s fees whether or not the case is won.  With contingency-fee agreement, however, the attorney shares the risk since the client only pays him or her a fee if the case is successful and the client is awarded money or receives a settlement.

7. There is less potential for frivolous litigation.

A contingency-fee arrangement makes it unlikely that an attorney will present a claim that lacks merit of has negative value.  While guaranteed payment may provide incentive to a less than scrupulous attorney to  present a claim without consideration of how successful the outcome of the case is likely to be, a contingency-fee agreement makes it more likely that an attorney will only present a claim that he or she believes has merit.

8. The playing field against wealthy opponents is leveled.

If an individual or a small business has to pay hourly attorney’s fees upfront out-of-pocket, the threat of a lengthy expensive lawsuit can work to the advantage of a wealthier opponent against whom a claim is to be presented.  This threat can cause the party that is not as financially well-off to refrain from going forward with a claim that has merit.  Equally likely is the chance that the financial disparity will result in a party accepting a settlement that is unfair in order to avoid expensive litigation.  When a client only pays his or her attorney’s fees at the conclusion of a successful case or settlement, a wealthier opponent is unable to use his or her position of relative financial strength as leverage.

     To talk more about the possibility of working with a Minnesota attorney on contingency or anything related to a potential claim, please contact Gilbert Alden PLLC, a Burnsville law firm near Lakeville and Eagan, Minnesota.


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