Misconceptions Regarding Contingency Fees

The purpose of this blog article is to dispel a number of misconceptions potential clients have regarding attorneys accepting matters on contingency fees.  Simas & Associates, Ltd.’s client intake team receives dozens of calls per month inquiring about legal representation on a contingency fee.

What is a Contingency Fee?

A contingency fee involves a lawyer taking a case and getting compensated from any potential recovery of damages. Most common in personal injury cases, attorneys take a percentage ranging from 30 to 40% typically of the recovery of a potential plaintiff’s damages. The issue of who pays costs such as court filing fees, legal service of process, depositions, experts, etc. varies among contingency fee arrangements; the nature of getting paid at the end is consistent throughout contingency fee arrangements.

Contingency Cases are a Specialty

Because of this arrangement, law firms in cases that provide for contingency fee representation have some common themes:

  1. There always must be a recovery of potential damages from which the contingency fee may be paid.
  1. Contingency fee attorneys must manage litigation, legal fees, and costs throughout the duration of the case in an entirely different way than do lawyers who handle matters on a non-contingency basis.
  1. Lawyers who exclusively practice on a contingency fee basis cautiously and carefully scrutinize their potential cases, the recovery, the merits and evaluate their chances of success.
  1. Many contingency fee cases that are unsuccessful mean the attorney does not get paid.
  1. Because contingency fee arrangements work only in cases where recovery is possible, not all areas of law can accommodate a contingency fee arrangement.

Contingency fees are usually best for civil litigation with somewhat certain recovery of damages. For these reasons, contingency fee lawyers carefully screen their cases.
This is one reason Simas & Associates, Ltd., which does not handle matters on a pure contingency basis, has a difficult time automatically referring clients to a contingency fee attorney. The contingency fee attorney is looking at things very differently in terms of a potential recovery whereas lawyers who get paid on an hourly basis or flat fee do not evaluate cases the same

Practice Areas Incompatible with Contingency Fees

We are often asked at Simas & Associates, Ltd. by potential clients if we can handle a license defense, writ petition, other administrative law matter on a contingency fee basis. The answer is unfortunately no. License defense like civil litigation defense does not involve any potential recovery thus not potential contingency fee. For this reason, law firms and lawyers who defend clients in civil litigation or administrative proceedings do not provide such defense on a “contingency fee basis.”
Being familiar with the concept of a contingency fee will help potential clients seeking legal counsel save time in searching for appropriate legal counsel.