Lawyer Contingency Agreements: What You Need to Know
If you’re considering hiring a lawyer, there’s a good chance that you’ll come across the term “contingency agreement.” These agreements are common in personal injury cases, but they can also be used in other types of lawsuits.
What is a contingency agreement?
A contingency agreement is a contract between a client and a lawyer in which the lawyer agrees to represent the client in exchange for a percentage of any money recovered in the case. The lawyer’s fee is contingent on the successful outcome of the case. If the case is not successful, the lawyer does not get paid.
In most cases, the lawyer’s fee is a percentage of the amount recovered, typically between 33% and 40%. The exact percentage can vary depending on the complexity of the case and the experience of the lawyer.
Why do lawyers use contingency agreements?
Contingency agreements allow people who might not be able to afford a lawyer to have access to representation. If a person has been injured and is unable to work, for example, they may not have the funds to pay a lawyer upfront. A contingency agreement allows them to pursue their case without worrying about the cost of legal fees.
Contingency agreements also give lawyers an incentive to work hard for their clients. If the lawyer’s fee is tied to the success of the case, they have a strong motivation to do everything they can to win.
What are the risks of contingency agreements?
While contingency agreements can be beneficial for both clients and lawyers, there are some risks involved. Because the lawyer’s fee is tied to the outcome of the case, they may be more selective about which cases they take on. If a case is unlikely to be successful, a lawyer may decline to represent the client.
Contingency agreements can also encourage clients to settle for less than they deserve. If a lawyer knows they will get a percentage of any settlement, they may be more likely to encourage their client to accept a lower offer rather than pursue a higher one that may be more difficult to obtain.
Finally, contingency agreements can be complex and difficult to understand. Clients should take the time to read the agreement carefully and ask questions if they don’t understand anything.
What should you do if you’re considering a contingency agreement?
If you’re considering hiring a lawyer on a contingency basis, it’s important to do your research. Look for a lawyer with experience in the type of case you have and ask for references if possible. Read the contingency agreement carefully and ask questions if anything is unclear. And most importantly, don’t be afraid to shop around and compare fees and services before making a decision.
In conclusion, contingency agreements can be a valuable tool for those who need legal representation but can’t afford it upfront. However, they do come with risks, and clients should take the time to understand the agreement and make an informed decision. With the right lawyer, a contingency agreement can be a win-win for both parties.