What Is a Contingency Fee?
Lawyers who draft wills or handle divorces operate on a billable hour or set fee basis. This means that if you go to an attorney to have your will drawn up, it is very likely that your attorney will quote you a fee to write the will and have it witnessed and signed. If you are seeking a divorce, your attorney may quote you an hourly rate of pay that will be deducted from an initial retainer. These lawyers are paid based on the amount of work that they do. A personal injury attorney, on the other hand, is often paid by contingency, which means that he or she takes a percentage of the final verdict or settlement.
How Does A Contingency Fee Agreement Work?
In a contingency fee agreement, the attorney agrees to work toward a settlement or a verdict for the victim and to accept payment of his or her fees by taking a percentage of the final amount. This percentage varies from one attorney to another but should be explained clearly in the fee agreement contract.
Contingency fee agreements may require the victim to pay expenses. However, many attorneys bear the cost of expenses for the victims in order to get the best expert testimony and pay for depositions and other expensive necessities. When this happens, the attorney usually has a provision in the fee agreement to recover those expenses from the settlement amount.
What Should I Look For In A Contingency Fee Agreement?
While contingency fee agreements are very common in personal injury law, not all agreements are the same. It is important to review the document carefully to ensure that you understand its terms completely. Some important questions to ask are:
- Will I be required to pay expenses? For large cases, expenses can grow quickly. Some large personal injury lawsuits have more than half a million dollars in expert witness fees, deposition fees and other cost by the time trial is over. Even small cases can quickly consume thousands of dollars in fees. Be sure you understand who will be paying these costs.
- How much will the attorney get? You may focus on the initial percentage, but look for other amounts as well. Is your attorney entitled to more if the case goes to trial? Is he or she entitled to a higher percentage of punitive damages?
- What if I want to change attorneys? The fee agreement may provide for you to split the proceeds of any settlement or verdict if you change attorneys.
For more information on contingency fee agreements, contact Dan Gilleon in San Diego.
