Paying a lawyer on contingency means that the plaintiff agrees that the attorney's fee will be determined by the amount of the settlement awarded to the plaintiff, should the case be decided in his or her favor. If the plaintiff does not win the case, the attorney will receive no fee. Many people falsely believe that, if they lose the case, they will not have to pay anything. Though they will not have to pay the attorney's fee, they will still be responsible for expenses their attorney incurred in pursuing their case, which could include things like medical reports, investigative services, expert witnesses, court costs, and court reporter fees.
If the plaintiff loses the case, he or she won't have to pay for the lawyer's time and labor, if there is a contingency agreement. Win or lose, however, a plaintiff will be responsible for the other expenses, and the cost of bringing the claim to court will come out of his or her pocket.
When someone agrees to pay a lawyer on contingency, the fee is set at a prearranged percentage of whatever the awarded amount might be. This can add up to much more than the normal fee the lawyer would have earned, but there are many advantages to paying this way:
- If the plaintiff loses the claim, the fees will be lower since the lawyer isn't paid.
- If he or she wins but the award is paid over time via a structured settlement, the plaintiff only has to pay the lawyer as he or she gets paid.
- Someone who cannot afford to pay much upfront may be able to hire a better (and more expensive) attorney on contingency.
- The attorney will arguably work harder on the case because his or her fee is at stake.
- Since the lawyer will not be getting paid by the hour, he or she may have more interaction with the client without being worried about "watching the clock."
- If paying by the hour, the defense could employ delay tactics to exhaust the plaintiff's funds.
- A lawyer who agrees to payment on contingency is more likely to only take cases that he or she thinks are winnable.
The only downside to paying this way is that the client will have to give up a sizeable percentage of any award or settlement. Any unpaid expenses will also come out of his or her share of the award. Considering that it may be a way to secure excellent representation that would normally be out of financial reach, however, it remains an option many people choose when looking to the courts to settle personal injury claims or other cases that involve large awards.
As always, individuals should make sure they fully understand any legal agreement or arrangement they enter into with a lawyer before the sign anything. The attorney's policies supersede any information in this article which is only meant to be generally instructive. If possible, it's best for potential clients to get someone with legal knowledge to look over any contracts before signing.