Legal professionals play a critical role in ensuring that the rights of citizens are protected and that the rule of law is upheld. However, there are certain terms within the legal umbrella that may be daunting to navigate and clearly understand before one decides to retain such services.
One of these intimidating terms that you may encounter is contingency fees. This is a structural mode of payment for lawyers. This payment is, however, dependent on winning or settling a case. This means that the lawyer’s payment is dependent on the success of the case. If they do not succeed, the client doesn’t pay for the services rendered.
As enticing as this may sound, contingency fees are not automatic, and they may be considered ethically inappropriate or illegal in certain cases. For this reason, it is important for you to learn more about contingency fees and understand what exactly it entails before considering it as the perfect payment structure between you and your lawyer.
How Do You Get Into A Contingency Fee Arrangement?
To enter into a contingency fee agreement, you need to consult your lawyer to understand whether they operate on a contingency fee basis and what their exact terms of operation are.
Second, you have to polish your negotiation skills and negotiate on the best terms with your lawyer to protect your interests and ensure that the percentages are not too high.
Upon agreeing on the specific terms, your lawyer will draft an agreement detailing all the terms that you have discussed.
Lastly, you will be required to analyse all the terms drafted and finally sign the agreement, which will be legally binding.
When are Contingency Fees Not Allowed?
Despite being common in various legal areas, there are certain cases where contingency fees are prohibited. These include:
a.Criminal Law: Criminal law works on the presumption of innocence until proven guilty. Therefore, financial rewards should not be the motivating factor in winning the case, as opposed to proving a person’s innocence.
b.Family Law: Family law often involves complex matters such as divorce and child support, which may be emotional for the parties involved. Contingency fees are therefore considered unethical, especially where the parties may desire to resolve their issues, but the lawyer prioritizes their financial reward.
c.State Restrictions: Each state may have extra restrictions on contingency fees and additional areas of law where they are not allowed.
Benefits of Contingency Fees
First, this structural mode of payment is curated primarily to favor the client. It takes the stress of looking for upfront legal fees off the client’s shoulders.
Second, it ensures more due diligence and ‘hard work’ on the lawyer’s part. Without winning the case, they know they may not earn anything.
Lastly, it creates a trustworthy relationship between the client and the lawyer. That is, there is more assurance that the lawyer is doing everything possible within their power to win the case.
Extra Expenses to be Paid
In a contingency fee arrangement, you are only required to pay once your case has succeeded or has been settled. This, however, applies only to the legal fees that are paid to the lawyer for the service provided. There are other costs you may be obligated to pay, regardless of the outcome of the case. These are:
- Court Filing Fees
- Police Report fees
- Expert Witness Fees
- Discovery Costs
- Exhibits preparation costs
Disadvantages of Contingency Fees
Contingency fees may look like the most ideal and secure method when hiring a lawyer. However, there are some disadvantages associated with it:
- High contingency percentages: Depending on how complex your case is and the risks involved, some lawyers may charge higher contingency percentages on the compensation.
- Lack of Representation: It may be difficult to find a lawyer who is willing to risk taking a case without any down payment fees, especially for complex cases.
- Difficulty in agreeing on the terms of the contingency fee agreement: It may not be easy to negotiate with some lawyers on agreeable terms that are legally binding.
Conclusion
Contingency fees are more prevalent in personal injury cases. Hiring an attorney who operates on a contingency fee basis is reassuring that your matter will be handled with the utmost diligence. With most firms embracing it, you don’t need to hesitate to seek legal counsel from any reputable law firm of your choice.
