What Are Attorney Contingency Fees?

Mar 12, 2021

Personal injury victims deserve the best legal representation but are often hesitant to pursue a consultation with an attorney due to the potential fees. For injured victims – whether due to a car accident, bicycle accident, slip and fall, dog bite, sex crime, or other incident – hiring an attorney to fight for your rights and seek a financial damages award can involve an hourly fee or a contingency fee.

Hourly fees are fairly straightforward. Whenever an attorney or paralegal works on your case, you’re essentially “on the clock,” and there is no ceiling for how much you could pay out-of-pocket. Depending on the duration of the case, the total fees incurred can add up to a significant amount of money. Before you hire a lawyer who charges by the hour, make sure to ask if he or she divides that hour into 15-minute or six-minute increments. This can be especially important when making phone calls or receiving case updates.

For example, a five-minute phone call would cost $100 when a lawyer who charges $400/hour breaks any applicable time into 15-minute increments. By comparison, a lawyer operating on the same hourly rate but offering six-minute billing increments would charge $40 (1/10 of the hourly rate of $400) for that same call. Over the course of a case, where hundreds of billable hours are often involved, this can add up to a considerable difference in the total fees owed by a client.

What are legal contingency fees?

The general definition of a contingency fee is a sum of money a lawyer receives on the condition that the case is successful. Legal contingency fees typically apply to personal injury cases. Unlike hourly fees, contingency fees are only payable if there is a favorable result in your case. An attorney’s contingency fee is often one third of a final damages award or verdict, but this can vary on a case-by-case basis. It is always recommended that you discuss the details of your contingency fee agreement with your attorney in advance.

What is a legal contingency fee agreement?

A contingency fee agreement is simply a payment arrangement allowing an injury victim seeking legal recourse to obtain representation by a lawyer, regardless of whether or not they have the financial means to pay that lawyer in the initial stages of a case. In a contingency fee arrangement, your lawyer agrees to accept a fixed percentage of the damages award recovered, which is the final amount paid to the client. Rather than paying an upfront fee and having additional fees due at specific periods throughout the legal process, a contingency fee agreement establishes that any fees will only be paid if and when a successful resolution to the case is reached and financial compensation is recovered.

If you do not win your case and recover monetary damages, you will owe nothing if you and your attorney entered into a contingency fee agreement in advance.