Lawyers usually charge their clients in one of three ways: Most charge by the hour. Your bill each month for this type of attorney fee is the agreed-upon hourly rate multiplied by the number of hours of work billed to your account. Sometimes attorneys agree to perform a certain task, like writing a simple will, for a set fee. Clients like this approach because they know in advance how much they will pay for the service. The third type of fee arrangement is called a contingent fee or contingency agreement. In this fee contract, you never pay the lawyer out of your pocket. If he wins, he is entitled to a percentage of your judgment, usually between 33 and 50 percent. If he loses the case, he does not get any payment for his time.
Pros/Cons of Contingent Fees
Contingent-fee arrangements open up the courts to people with little or no money. Whereas a wealthy person might not blink at the average attorney's hourly rate, which can be in the hundreds of dollars, it is simply prohibitive for many. Contingent fees also ensure that the attorney's interest stays closely aligned with that of his client, since they win or lose together. On the other hand, when a case resolves quickly, it may seem that the percentage paid to the attorney is outrageous considering the small amount of work he did to earn it.
Areas of Law for Contingency Fees
Attorneys typically work on a contingency fee basis in certain areas of the law. You'll find many in personal injury cases, medical malpractice and other cases where a large money judgment is possible, such as defective product cases and in the collection of large debts. Contingent-fee attorneys are possible but rare to find in real estate and business litigation, and virtually impossible to find in cases that do not involve monetary judgments, like bankruptcy, adoption, immigration and criminal defense cases.
Locating a Contingent-Fee Lawyer
If you are hoping for a contingency fee arrangement, be certain that the type of case you want to bring is the type where you seek a money judgment. Then look for an attorney who regularly practices in one of the areas where contingent agreements are the rule, not the exception, like personal injury. Since attorneys who work on contingent fees will get nothing unless they win, they are likely to be choosey about the cases they accept. If you find an attorney who will take your case, read the fee agreement well before you sign it so there will be no surprises when it's time to divide up the money judgment.
- Comstock/Stockbyte/Getty Images