I often spend a lot of time at the beginning and the end of a relationship with a client explaining what a contingency fee agreement is and how it works. Generally speaking a contingency fee contract is an agreement by which the fee is only payable if there is a favorable result. It is very commonly used in personal injury and other plaintiff oriented litigation. Typical contingency fees in the Kansas City area range from one third to one half, with variation by firm, type of case, and the stage of litigation at which the case is resolved. The benefit of a contingency fee agreement is that the attorney or law firm takes the case without being paid a retainer or hourly fee, and generally they pay all of the case related expenses. Additionally, if there is no recovery the client pays nothing and is not responsible to pay for the case expenses. (Case expenses typically include the cost of medical records, depositions, filing fees and expert witness fees and often run into the thousands of dollars on any case, and the tens of thousands in a medical malpractice case). What I have found is that clients are very happy to have a lawyer take their case on a contingency at the beginning when they are spared writing a big retainer check, and very unhappy at the end when they read in the settlement statement that one third of their great recovery will be paid to the attorney. Some things that are important to remember if you are considering signing a contingent fee agreement. First, I would bet that 99.9% of attorneys will take your case on an hourly basis if you are prepared to pay them. Most people prefer to avoid that kind of financial commitment, and many simply can’t afford to pay a lawyer $200 an hour, especially when they learn how many hours go into litigating a case. Second, the average amount of time between filing a case and resolving it is 18 months (that does not consider the time spent investigating and preparing a case for filing). That means that a lawyer will spend tens or hundreds of hours (that they might be billing at $200 an hour) on your case, for a year or two, without being paid a penny. The law firm will pay all of the people who are necessary to move your case forward, including some very expensive experts (I have seen doctors who charge $1400 per hour to work on a medical malpractice case- yes- per hour). The lawyer will also pay the court reporters, mediators, consultants, investigators and various fees related to filing and litigation. The figure a lawyer receives at the end of the case may seem high until you factor the time and resources that have gone into prosecuting a case diligently and aggressively. And there is always the possibility that a jury will decide that the plaintiff is not entitled to any recovery at all, in which case the client owes nothing and the lawyer receives nothing.
Some other things to consider are that a plaintiff will be responsible for their medical bills out of their portion of the recovery. The damages a plaintiff claims will include medical bills, lost wages, property damages among others. When a plaintiff settles a case or wins a judgment they are being compensated for bills they have incurred and sometimes pain and suffering. A good lawyer may be able to help you reduce your medical obligations depending on the circumstances, but they are the client’s responsibility (and often the basis of the settlement).
Also, have your prospective lawyer explain all of the details of the contingency contract before you sign it. And don’t trust a lawyer who tries to make you sign up before you have time to think about it, reflect and ask questions.
Tags: By Rachel Smith
