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What Is a Contingency Fee?

April 28, 2021

The number one reason most injured accident victims hesitate to hire an attorney is concern over how much one costs. The Denver personal injury lawyers at the Fang Law Firm know that a client is often not in a position to spend money on legal services after an accident. They solve this issue and allow any plaintiff – regardless of financial situation – to benefit from legal representation by offering their services on a contingency fee basis.

What Is a Contingency Fee?

How Do Contingency Fees Work?

If you see that a law firm operates on a contingency fee basis, it means the law firm will only charge a fee for the attorney’s services if and when the attorney secures a financial recovery. In other words, charging attorney’s fees is contingent upon the attorney winning the case. This is in contrast to an hourly rate, in which you would have to pay the attorney for his or her services by the hour whether or not he or she wins your case.

With a contingency fee arrangement, if the attorney does not succeed in achieving a settlement or positive jury verdict on your behalf, you will not owe a penny in attorney’s fees for services rendered. If the attorney does win your case, he or she will charge a fee as a percentage of your settlement or judgment award.

The benefits of a contingency fee arrangement are that you never take on any of the financial risk of bringing a personal injury lawsuit out of pocket. It also motivates the attorney to maximize your payout, as he or she will not get paid unless you do.

How Much Is a Contingency Fee?

Every personal injury law firm charges differently for its services and legal representation. Before you sign a contract, make sure you understand exactly how the law firm and attorney charges. With a contingency fee arrangement, a lawyer will take an agreed-upon percentage of the financial compensation won as his or her final payment.

The average percentage deducted is around 33.33 percent, or one-third of the financial recovery. However, this will depend on the law firm’s policies and the amount of work that must go into the case. If your case has to go to trial, for example, the attorney will most likely charge a higher percentage, as this means your case will require more work. You and your lawyer will work out the percentage removed before you sign a contract.

Can You Negotiate Contingency Fees?

A contingency fee rate may be negotiable depending on the specific details of your case and the Denver car accident attorney. You always have the right to try to negotiate a lower rate with an attorney before you sign to hire him or her for representation. After you sign a contract, the right to negotiate the rate is lost.

Always ask the attorney if rates are negotiable. Ask other attorneys in your area for fee information as well to compare prices. In general, the odds of negotiating a lower rate increase if you have a good reason to present to the attorney. If you already completed a considerable amount of the legwork of your case, for example, this is a valid reason for a reduced fee. The estimate of your final settlement amount can also change how much the attorney charges for legal services.

Are There Other Fees You Still Have to Pay?

If an attorney operates on a contingency fee basis, you should not have to pay anything upfront. The law firm will take on 100 percent of the financial risk of your case by fronting the costs of investigation and litigation. It is important to realize, however, that you may still have to pay other fees connected to bringing a lawsuit.

For example, you may have to pay court filing fees, discovery costs, the cost to hire expert witnesses and overhead costs. Always discuss every possible fee you may have with a personal injury lawyer before beginning a case. Your lawyer should be honest, transparent and upfront about exactly how much your case will cost you.