How To Make A Contingency Fee Agreement Work For You

August 20, 2020 Off By Glespynorson

Contingency

Hiring an attorney on a contingency fee structure can be an affordable way to take on your personal injury case. This is particularly true when you don’t have the upfront capital to pay standard fees.

In the following article, we’ll be discussing how you can work this arrangement to your advantage. It all starts with knowing what to expect.

1. Understand The Financial Structure

The first question to ask is what is a contingency fee? A contingency fee is when your attorney agrees to take the case with no upfront payment. He or she will only get paid if they win your case or come to a settlement agreement.

The obvious advantage of this to you is that you are not out the $2,000, $4,000, or whatever the attorney charges for civil litigation cases. The disadvantage is that you could end up spending a lot more depending on the size of the settlement.

See, most attorneys will charge anywhere from one-third to 40 percent of the settlement or judgment. One-third is usually for a case that settles pre-trial. Forty percent, if you win a civil judgment.

It’s important to understand this going in. That way, you won’t get hit with “sticker shock” should the final amount be a significant one.

2. Find an Attorney Experienced in Your Area of Need

The contingency fee lawyer is not hard to find. Most attorneys will offer this as an option depending on your case.¬†Cogburn Law¬†recommends it if you’re in a situation where you’re facing personal injury and can’t deal with the stress or burden of upfront fees.

That said, you don’t want to hire the first attorney willing to take on your case in such a manner. Do your research. What are some previous cases like yours they’ve worked on, and what were some of the judgments or settlements?

3. Plan Out Settlement Scenarios

When deciding whether this is the right path for you, looking at a sample contingency fee agreement is a good idea. Let’s say your case has a good chance of settling at $100,000. That would mean a payout to the attorney of around $33,000 versus whatever he or she would normally charge.

If their fee is $200 per hour,¬†as is common, and the case takes approximately 20 hours of work to settle, that’s $4,000. In the contingency fee scenario, you would be paying the attorney over eight times the amount of the upfront fee.

However, that could be worth it to you if your target is somewhere in the $50,000 range and you acknowledge you don’t have the liquidity or knowledge to handle the case on your own. Ultimately, the larger the settlement amount possibility is, the more worthwhile it can be to lean on a contingency fee attorney’s skillset.

4. Talk About The Trial Possibility Upfront

Before hiring an attorney on a contingency fee basis, make sure you’re dealing with a straight-shooter. Don’t fall for empty promises.

Force them to have the conversation with you about the possibilities of the case going to trial. Particularly, you’ll want to discuss when it may or may not be advantageous to take the case that far.

5. Realize That You Can And Should Negotiate

The standard contingency fee agreement is always negotiable. Talk to your attorney about what you can afford. You might consider paying a smaller amount upfront in exchange for a lower percentage on the backend.

Contingency Fee Agreements Can Be Great If You Are Unable to Afford Upfront Expenses

Ultimately, a contingency fee can play to your advantage. Just make sure you know what you’re giving up and that the long-term value is worth it. For more legal information and tips, check out some of our other posts.