Contingency Fee and No Win, No Fee Attorneys

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A lot of people live in fear of ever having to hire an attorney because they think that there is no way they will ever be able to pay for an attorney out of pocket.

A high price tag is not always a foregone conclusion, however, especially if you retain an attorney that operates on a contingency fee. Contingency fee attorneys are a great pathway through the justice system, but there are limitations that you need to be aware of.

Attorneys that operate on a contingency fee are also referred to as “no win, no fee” attorneys.

What is a Contingency Fee?

The main definition of a contingency fee is a payment arrangement that circumvents out-of-pocket costs altogether. Instead, your attorney receives a previously agreed-upon percentage of the settlement that you receive if you win your case.

In other words, your attorney only gets paid if you win.

This may seem like a huge risk for your attorney, but the rewards are considerable.

Contingency fees provide your attorney with an incentive to win you the highest settlement amount possible in as little time as possible.

What is the Standard Contingency Fee for an Attorney?

Contingency Fee and No Win, No Fee Attorneys

The typical contingency fee for an attorney is a percentage of your total settlement, not a fixed dollar amount.

The majority of personal injury attorneys charge 33.3 percent if the case settles with no lawsuit filed and 40 percent if a lawsuit is filed.  

What Types of Attorneys Use Contingency Fee Arrangements?

Just about any attorney is able to work under a contingency fee arrangement, depending on their specialty.

Contingency fees are, however, solely for civil litigation. Criminal litigation does not permit this payment arrangement.

No win, no fee personal injury attorneys are the attorneys most likely to take on a client on a contingency basis. This is due to the fact that injury settlements from medical malpractice suits or large corporations often have price ranges in the hundreds of thousands of dollars.

For example, $200,000 at a 33 percent contingency fee rate would leave the lawyer with $66,000.

The money will come directly out of your settlement once it is received.

Drawbacks to Contingency Fees

It might sound like contingency fees are a great deal, but they are not without their issues. Some ways in which contingency fees are problematic include:

  • Not every attorney will take a case under this arrangement, particularly if it seems like a potential loss or an unusual amount of work.
  • Even though you and your attorney agree on the contingency fee beforehand, it can be quite a shock to see a smaller settlement amount than you were awarded.
  • If the attorney is too fast or too slow to resolve your case, either the client or attorney might feel they got an unfair deal. 
  • Not all fields of legal practice permit attorneys to operate under this kind of agreement. An attorney who agrees to contingency fees in a field that forbids them is risking disbarment.
  • The IRS handles these financial settlements as though the plaintiff received the full amount and independently paid their attorney. This can create big problems when it comes to filing your taxes.

Make sure your attorney thoroughly answers any questions you have.

Contingency Fee Agreement

Before signing a contingency fee agreement, do your due diligence and read through it thoroughly, particularly the fine print. Legal documents are infamous for including information that people overlook because they do not read the fine print. Just look at the Terms of Service for… anything.

Without a comprehensive reading, you might overlook information pertaining to small fees for which you are responsible and inadvertently make your own attorney’s work more difficult.

When you read the agreement, be sure to ask about anything you don’t understand. 

You should also keep a copy of the fee arrangement for your records.

Factors to Consider before Hiring a Lawyer

There are a few things you’ll want to keep in mind prior to making a decision:

Consultation Fees

Attorneys who operate on contingency agreements do not typically charge consultation fees. Prior to your first meeting, you should find out if this cost exists.

During the meeting, there are several questions you should ask in order to find out whether or not this attorney is a good fit for you.

Who Will Represent Me?

The attorney who acts as the advertising spokesperson for the firm is not necessarily the one who will be handling your case. A junior associate with less experience might be the one representing you.

In spite of having the very best of intentions, an attorney with less experience is also less likely to get you the settlement you are seeking.

When Will You Start?

The attorney should be able to give you a definite time frame within which your casework will start. It should begin within two weeks of his date of hire, and you should be given routine updates on any developments.

That being said, it is also your responsibility to check-in on the status of your case.

The smartest move you can following any kind of personal injury to yourself or to someone you love is to speak to Colorado attorneys who have dealt with these matters before. 

If you or someone you love has been injured as the result of another person’s careless driving or any other type of negligent behavior, then you may be entitled to receive financial compensation for damages. You need a reputable personal injury attorney who is experienced in handling these kinds of cases. 

If you are seeking legal representation for a pending lawsuit and you want an attorney who is esteemed, qualified, and knowledgeable in handling these sorts of injury cases, then the personal injury attorneys at the Injury Victim Law offices are just who you’re looking for.

If you would like a free consultation with one of our skilled personal injury attorneys regarding a case you feel you may have, we are here to help. Please reach out to us by calling (800) 245-2774 to schedule your appointment for your free consultation today.

 

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