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  • Writer's picturePeter Lamont, Esq.

The Ins and Outs of Contingency Fees: A Comprehensive Guide

When you're facing a legal issue that requires professional intervention, one of the most daunting aspects can be the cost of hiring an attorney. Enter the contingency fee arrangement, a payment structure democratizing access to legal representation. But what exactly is a contingency fee, and when is it the right choice for you? This blog post aims to answer these questions and more.

contingency fees

What Are Contingency Fees?


In a contingency fee arrangement, your lawyer's payment is contingent upon winning your case. Instead of charging you by the hour, the attorney agrees to take a predetermined percentage of the recovery, which is the financial award you receive if you win the case. If you lose, neither you nor the attorney receives any money, although you may still be responsible for other costs like court fees or expert witness charges.


The PROS of Contingency Fees


Accessibility to Legal Services

One of the most significant advantages of a contingency fee arrangement is that it makes legal representation accessible to people who might not have the funds for an upfront retainer. This fee structure allows you to hire a competent attorney without worrying about immediate out-of-pocket expenses.


Alignment of Interests

Your lawyer has a vested interest in winning your case in a contingency fee arrangement. Their payment is directly tied to the outcome, often resulting in a more motivated, committed legal representation. This alignment of interests can be particularly beneficial in complex cases where the stakes are high.


The CONS of Contingency Fees


Potential for High Costs

While contingency fees can make legal services more accessible, they can also be expensive in the long run. If you win your case, the attorney's percentage might take a significant chunk out of your financial award. It's crucial to weigh this cost against the potential benefits of winning your case.


Limited Applicability

Contingency fee arrangements are not suitable for all types of legal matters. For example, they are rarely used in business law cases or breach of contract lawsuits. Lawyers are selective about the cases they take contingently due to the inherent risks involved.


Why Some Lawyers Hesitate to Take Cases on Contingency

Taking a case on a contingency basis is a gamble for attorneys. They are essentially investing their time, expertise, and often their own money (in the form of court costs and other expenses) into your case with no guarantee of a return. Here are some reasons why lawyers might be hesitant:


Risk Assessment

Lawyers thoroughly evaluate the case's merits before agreeing to a contingency fee arrangement. Most attorneys will not take the risk if the likelihood of winning is low.


Financial Viability

The potential financial award must justify the time and resources the lawyer will invest in the case. If the possible recovery amount is too low, the case becomes less appealing for an attorney to take on a contingency basis.


Complexity and Duration

Some legal matters, such as intricate business disputes or intellectual property cases, can be too complex and time-consuming to warrant a contingency fee arrangement. These cases often require extensive research, expert consultations, and a long timeline, making them financially risky for attorneys.


Ideal Cases for Contingency Fees


Contingency fees are most commonly used in cases where a substantial financial award is expected and the odds of winning are favorable. These cases often include:


  • Personal Injury Claims: These cases usually involve clear liability and insurance coverage, making them ideal for contingency fees.

  • Employment Discrimination: Cases involving wrongful termination or workplace discrimination can result in significant awards.

  • Class Action Lawsuits: These collective claims often result in large settlements divided among many plaintiffs.

  • Medical Malpractice: These cases can yield substantial settlements or awards, making them suitable for contingency fee arrangements.


Conclusion


Contingency fees come with their own set of pros and cons. While they can be a lifeline for those who can't afford upfront legal costs, they can also be expensive in the long run. Lawyers are selective about taking cases on a contingency basis due to the financial risks involved. Therefore, understanding when this fee structure is appropriate can save you both time and money. Your first step in any legal matter should be a thorough consultation with experienced attorneys to discuss your case and understand your options. This initial investment can guide you toward making the most informed decision for your unique legal and financial situation.


Do you have questions about civil litigation or defending a lawsuit? If so, contact us today at our Bergen County Office. Call Us at (201) 904-2211 or email Us at info@pjlesq.com

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If you would like more information about this post or if you want to discuss your legal matter with an attorney at the Law Offices of Peter J. Lamont, please contact me at pl@pjlesq.com or at (201) 904-2211. Don't forget to check out and subscribe to our podcast and YouTube channel. We have hundreds of podcasts and videos concerning a variety of business and legal topics. I look forward to answering any questions that you might have.

About Peter Lamont, Esq.

DISCLAIMER: The contents of this website and post are intended to convey general information only and not to provide legal advice or opinions. The contents of this website and the posting and viewing of the information on this website should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. Nothing on this website is an offer to represent you, and nothing on this website is intended to create an attorney‑client relationship. An attorney-client relationship may only be established through direct attorney‑to‑client communication that is confirmed by the execution of an engagement agreement.


As with any legal issue, it is important that you obtain competent legal counsel before making any decisions about how to respond to a subpoena or whether to challenge one - even if you believe that compliance is not required. Because each situation is different, it may be impossible for this article to address all issues raised by every situation encountered in responding to a subpoena. The information below can give you guidance regarding some common issues related to subpoenas, but you should consult with an attorney before taking any actions (or refraining from acts) based on these suggestions. Separately, this post will focus on New Jersey law. If you receive a subpoena in a state other than New Jersey, you should immediately seek the advice of an attorney in your state, as certain rules differ in other states.



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