A contingency rate agreement may cost you more than a normal hourly rate. Once you agree to the contingency fee, you'll need to pay the agreed amount. Of course, as with anything else, contingency fees also have certain disadvantages. Once you agree on the contingency fee, you owe the agreed percentage no matter how long the case takes, whether it takes a year or a week.
This is especially true in clear cases that may require only a few phone calls and a couple of working hours to reach an agreement. Be sure to discuss your options with your lawyer before making a decision. Some attorneys may offer a flexible contingency fee depending on the outcome of your case. Contingent fees promote efficiency and discourage frivolous demands.
Because attorneys assume all financial risk if there is no recovery or if recovery doesn't cover their costs, they act as guardians and don't accept frivolous or unjustified lawsuits. Lawyers also strive to be efficient, since the additional costs come from their profits and not from the client's pocket. Conversely, attorneys who charge hourly fees have an incentive to lengthen proceedings, in order to maximize their billable hours of time. By far the most common argument against contingency fees is that they create an incurable conflict of interest.
According to the argument, lawyers should not be allowed to have a financial interest in the outcome of the process. The theory is that if lawyers are paid the same regardless of the outcome for their client, they are more likely to bring an independent mindset to their work, for the benefit of everyone involved. While unforeseen fees can be beneficial in the short term, one of the major drawbacks is that attorneys are often left with a substantial percentage of the settlement or award. The great advantage is that you don't have to pay money to a lawyer to take care of your case and resolve it if you hire that lawyer on a contingent basis.
Therefore, the aspect of contingency fees that gives lawyers a financial interest in the outcome of the dispute and that they are only paid if they win is nothing new. Unforeseen fee cases can sometimes be considered a risk, as the lawyer doesn't get paid unless he wins the case. A contingency fee agreement is a contract between a client and their attorney in which the attorney's fees depend on the outcome of the case. Several recent studies have shown that, with regard to the number of hours worked, the average fees on a contingent basis are comparable to the average hourly fees of lawyers in similar cases.
A contingency fee agreement is a form of billing that allows an attorney to receive a percentage of the damages awarded at the end of the case instead of an hourly rate. For example, the client may be responsible for court filing expenses, evidence costs, expert fees, and other overhead expenses in order to move their case forward. A contingency fee agreement allows the client to compete more fairly, since they won't have to pay the lawyer up front and will only have to pay a fee if they win. Although the lawyer does not receive his fees until the end of the case (and unless the case is won), the client may still be responsible for some initial fees related to the processing of the case. Even corporate attorneys who traditionally work on hourly rates are adopting results-oriented fees.
In addition, professional ethics rules prohibit lawyers from working on a contingent basis in family law or criminal law cases, because this would appear to condone or even encourage divorce or criminal activity. Be sure to discuss fees at your first meeting with your lawyer and ask them to discuss all possible options before making the decision to hire an attorney. In contingency arrangements, the lawyer undertakes to take charge of the case without charging his usual hourly fees. When working with a contingency fee agreement, clients may be more inclined to choose an attorney based on their willingness to take charge of the case, rather than their experience or expertise.