4 Advantages of Contingent Attorney Fees

The CDC’s National Center for Health Statistics estimates 31 million people visit U.S. emergency rooms annually due to unintentional injuries. Oftentimes, many of these people or their family members will later find themselves entangled in a personal injury or wrongful death lawsuit. These types of cases are typically accepted on a contingency fee basis. Essentially, we the attorneys will front the costs to investigate a client’s claim, take the client’s case to trial, and handle any other relevant expenses. In these instances, we do not receive payment until the case is finished and only if our client recovers from the defendant. If our client does in fact recover money from the opposing party, we recoup our expenses and take a percentage of the total amount recovered.

There are 4 major advantages of having contingent attorney fees:

#1 David versus Goliath: The average citizen can take on a wealthy adversary

When a person is injured and a major corporation or insurance company does not want to pay, litigation can take months or even years. Rest assured the defendant(s) will likely have a team of high-paid, experienced attorneys. For the average person, hiring a comparable team of attorneys (or even one for that matter) is nearly impossible. If, however, the attorney’s fee is contingent, even clients of modest financial means can “afford” the best attorney to pursue their claims.

#2 No money, no problem: The attorney fronts all litigation costs

This is the crux of a contingent attorney fee payment scheme. The clients have no out-of-pocket costs while their case is being litigated. The attorney will often provide all necessary expenses and will only have to be paid by the client if the attorney is victorious. Even then, no money comes directly out of the client’s pocket but rather it is deducted from the total amount the client is awarded in the settlement or judgment.

#3 No bad apples: Weed out meritless cases

Not every injured person is entitled to financial recovery. There may be various reasons why this is true. Perhaps the client is at fault or maybe the law is not on his side in this particular instance, and this, in turn, bars recovery. Whatever the case may be, a wise attorney likely will not waste valuable time and resources on a case that has little to no chance of resulting in success for the client. Since we provide all upfront costs, we avoid haphazardly spending money that we will not recoup. Not to mention we want to avoid wasting clients’ time or giving them false hope.

#4 Light a fire: Align attorney and client incentives

Outside of personal injury and wrongful death cases, most attorneys bill their clients on an hourly basis. This payment arrangement can boil down to a “the longer we take, the more we make” type of approach by some attorneys. Win or lose, the attorney will be compensated for his or her efforts. When a DC personal injury lawyer knows he will not be paid until the client’s case is resolved, and better yet, the client wins, there is a much greater incentive to make sure a favorable outcome is achieved as quickly as possible.

This type of agreement is certainly a risk for attorneys. After all, there is always the risk that we could invest countless resources, and effort into a case only to recover nothing. However, this risk is a calculated one. We usually offer a free consultation and evaluate the case before taking it on. In doing so, we reduce the likelihood that a case we handle will result in no financial recovery. For the clients, on the other hand, a contingent attorney fee arrangement can be practically risk free.

Thanks to our friends and co-contributors at Cohen & Cohen, P.C. for their added insight into the client benefits of contingency fees.