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What’s this I hear about contingency fees?

This is a term injury lawyers take for granted. It’s not a term you hear everyday, except if you’re a personal injury attorney, so it needs to be explained.

What on earth does it mean & how does it work?

It means that the lawyer you hire agrees not to take any fee for his work unless and until a contingency takes place, that is something needs to happen before s/he gets paid. The fee is dependent or conditioned on something happening, an event of some sort. That something is almost always a recovery of money on behalf of the client, which triggers the fee.

Simply put, if no recovery is made, then there is no fee.

If, however, the contingency happens, then a fee is due. The amount of the lawyer fee is based upon the amount of the recovery, typically 1/3 rd.

The way I always explain it, in plain language is as follows: ” It costs nothing to meet with me and I don’t get paid until you win.”

I’m allowed to plug my business a little bit since it’s my blog, right?

Anyway, “I don’t get paid until you win.” That’s the stuff a contingency fee agreement is made of.

How else do lawyers get paid?

The most common is the hourly rate. Win, lose or draw, the client gets a bill. Probably gets monthly billings and might even have to pay a “retainer,” which is a down-payment to get the case going, or should I say, get the lawyer going!

As most folks know, lawyers are incredibly expensive. Hourly rates border on the ludicrous. I’d say in these parts of New Hampshire most lawyers bill at $275-$350 per hour, with some billing much more.

In fairness, the law business is not a cheap operation to run, and the stakes can be high.

Regardless, I’m very glad I don’t bill by the hour.

Sitting at a restaraunt in Walpole, New Hampshire the other day, I wondered how regular, hard-working folks could ever afford to pay a lawyer, especially in this economic recession. There were all kinds of folks, and I imagined that even the wealthiest among them would have a difficult time paying a lawyer by the hour if s/he were in some kind of protracted legal case.

I’d just hate to send my client a big bill. I function so much better as a commission guy.

The contingency fee arrangement lets me work on commission. It puts me to the test. My pay solely depends on what kind of job I do. The better I do for a client, the better I do for me. I’ve never had an injury client complain about my fee, no matter how large, because that means s/he got a large recovery.

It’s a great system. The client does not have to put any money down (retainer), never has to worry about getting stuck with a bill. It allows the client to pursue his or her slice of justice without worrying about money. The client can hire an excellent lawyer, and not have to be afraid of the insurance company.

Best of all, the lawyer and the client, in my view & to use sports language, become team-mates.They are in it together. It’s a win-win, as they say.

I’m sure it’s all too common for a lawyer and client to have bad feelings based upon bills. Using a contingency fee avoids that problem.

Let’s face it, I’m positive many a client curses his lawyer upon receipt of a bill– and probably for good reason. It does not bode well for any case to have the lawyer and client mad at each other.

I need to tell you that the law does not allow lawyers to use a contingency fee in some cases, like criminal or divorce cases, as it does in personal injury claims. Doing so would be illegal.

If you have any questions on contingency fees, feel free to call me. Hopefully, this blog-post helps you better understand the basics of contingency fee agreements.

Keep your strength.

Charlie Donahue
injury law
Keene, New Hampshire

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