A Law Firm`s Contingency Fee Agreement: Understanding the Basics

When hiring a lawyer, one of the most critical aspects of the legal process is the fee arrangement. A contingency fee agreement is an arrangement between a law firm and a client where the law firm only gets paid if the plaintiff (client) receives a settlement or a favorable verdict in court.

Contingency fee arrangements are common in civil legal cases involving personal injury, medical malpractice, and contract disputes, among others. This type of agreement allows people who may not have the financial resources to pursue legal action to access the justice system. It also incentivizes lawyers to work hard to win the case because the more they win for their client, the more they earn.

Here are some things to consider when reviewing a contingency fee agreement:

Percentage of Settlement

The percentage of the settlement that the law firm takes as payment is typically outlined in the agreement. In most cases, it ranges between 33-40% of the settlement amount. However, it`s essential to note that this varies from state to state and is subject to negotiation.

Expenses

While the law firm covers the expenses associated with the case, the client is responsible for reimbursing any costs related to the case`s handling. This includes, but is not limited to, court fees, filing fees, expert witness fees, investigator fees, and other expenses incurred while pursuing the case.

Legal Fees

If the plaintiff loses the case, they are not liable for any legal fees, but they may be responsible for the expenses mentioned above. However, some law firms may have a provision in the agreement that requires the plaintiff to pay expenses if they withdraw the case.

Termination

The contingency fee agreement should also outline the process for terminating the agreement and what happens if the plaintiff decides to terminate the agreement. The law firm may include clauses about the timing of termination as it may impact the law firm`s ability to recover expenses paid on behalf of the plaintiff.

Conclusion

Contingency fee agreements are an excellent way for plaintiffs to access legal representation without having to worry about legal fees upfront. However, it`s essential to review the agreement with a lawyer and ensure that you fully understand the agreement`s terms. It`s also crucial to work with a reputable law firm that adheres to ethical practices and provides professional representation. Understanding the terms of the agreement helps ensure that you are clear on all elements of the process, and that there are no surprises or misunderstandings down the line.