(ThyBlackMan.com) There are almost endless reasons you might hire an attorney during your lifetime, and you may find yourself engaging them pretty regularly.
Perhaps you’re a business owner facing tax issues, you’re in the midst of a divorce, or maybe you’re part of a contested estate after a loved one has passed away.
The reasons lawyers can be beneficial in your life are extensive, and in some circumstances, they may work on a contingency. There are many situations where an attorney won’t work on a contingency basis, but for the instances where it’s appropriate, it can be valuable to you as the client.
Below are some of the key things you should know about contingency fees and whether or not that would be something applicable to your situation as you look to hire an attorney.
What Are Contingency Fees?
You may have heard the term floating around before, without really understanding what it means.
Essentially, when a lawyer charges contingency fees for a case, it means instead of being paid a retainer or working hourly, the attorney or law firm will take a case where they don’t make money unless there is a settlement or the case goes to trial and money is recovered.
It can be risky for law firms, so typically they won’t take on these type of cases unless they have some confidence that either a settlement will be reached or they will win during a trial.
What Is the Financial Impact for Clients?
In circumstances where contingency fees could be an option, sometimes clients feel like it’s advantageous to them because they’re not paying anything upfront. Since the firm only gets paid if the client is paid, there is also no risk to them.
On the other hand, contingency fees can constitute a significant portion of money recovered. The common contingency fee is 33% or 1/3 of the settlement or money received during a trial. Some firms will charge as much as 50%, while on the low end it may be as little as 15%, although this is pretty uncommon.
What Types of Cases Work with Contingency Fees?
As mentioned, not every type of legal issue is going to be something where contingency fees will work as a viable option.
Some of the cases that can commonly work with contingency fees as payment to the law firm include accidents and personal injury situations, and also certain estate issues if there is a dispute for example or a dispute regarding the surviving spouse. It should be noted, however, that contingency fees don’t necessarily work for many estate issues, such as the drafting of wills.
Other common legal issues where contingency fees wouldn’t work include divorces, criminal defense, or business-related issues, such as creating a business.
In many cases, if you do have a situation where litigation is involved, and you can find a reputable firm that works on contingency fees, it can be good for you as the client, as long as you do your research and read the fine print of the agreement you have with the firm.
Staff Writer; Michael Snow
