What Is a Contingency Fee?
The cost of legal representation is typically more than most average Americans can afford, especially for lengthy cases that take months or even years to resolve. Many attorneys bill their work for their clients by the hour, in increments of fifteen or even ten minutes. This can add up to a tremendous cost to the client, potentially overshadowing any recovery the attorney helped to secure. To counterbalance this and offer legal representation to those who need it most, many personal injury attorneys in West Virginia offer contingency fee billing instead of billing their time by the hour.
How Does a Contingency Fee Work?
When an attorney agrees to represent a client, the attorney must provide a clear contract that outlines the client’s financial obligations for legal services. A contingency fee is a payment agreement stipulating the attorney receives a specified percentage of the client’s final settlement or case award. However, the attorney does not collect any fees at all if he or she loses the client’s case and fails to secure a recovery.
Contingency fees are beneficial to clients who otherwise could not afford legal representation. A contingency fee guarantees the client pays nothing unless he or she wins the case. Any fees paid will be a portion of the net case award, ensuring the client receives a significant portion of the total recovery. However, some attorneys do charge by the hour, but then only accept their fees after winning a case. This can mean a significant difference in the client’s total recovery.
Determining a Fair Contingency Fee
Most attorneys who offer contingency fee billing do so using a 20% to 50% margin. The two factors most important for determining the amount of the contingency fee are the complexity of the case and whether you can seek attorneys’ fees as damages. An attorney may meet with a client during a free consultation, determine the client has a strong claim that will require minimal effort and research to win, so the attorney may only ask for a 20% contingency fee. For a more complex case requiring months of research and multiple court appearances, a higher contingency fee reflects the amount of work required to adequately handle the case.
Some plaintiffs may have the option to claim their attorneys’ fees as damages in their lawsuits. If this is possible, the plaintiff and his or her attorney should include some sort of stipulation in their contract concerning who pays legal fees and when. Most attorneys will allow payment at the conclusion of a case, and if the defendant must pay a plaintiff’s legal fees they will go to the plaintiff’s attorney.
If an attorney offers to take your case with a contingency fee agreement, be sure to find out who pays litigation costs and when. If your attorney takes litigation costs out before taking a contingency fee, this may result in a higher recovery for the client. The timing of the payment of litigation costs can equate to thousands of dollars or more depending on the overall value of the case.
When to Look for Contingency Fee Billing
Some clients may wonder if a contingency fee is fair when an attorney can settle an open-and-shut case with a few phone calls and a single court appearance. While it is true that some cases may result in an attorney making more from a contingency fee than he or she would have by billing per hour, contingency fee billing ultimately makes legal representation more accessible. A plaintiff does not need to worry about attorneys’ fees on top of already pressing financial issues from a personal injury.
Contingency fee billing does encourage attorneys to be more discerning in the cases they take, even those that may be more difficult than usual but still winnable. However, attorneys who offer contingency fee billing do so to help injured clients secure legal counsel when they need it most regardless of their ability to pay. A personal injury can cause devastating economic damage to a family and having a contingency fee agreement ensures they do not need to worry about legal fees until their case reaches a conclusion.