Contracts with Lawyers (3 of 3)

The first post in this series dealt with retainer contracts.  The second dealt with flat fee contracts.  This is the third and final post in the series, and deals with contingency fee contracts.  Remember that these just are broad overviews, and a particular contract can be a blend of two or all three.  Read any contract very carefully and make sure you understand it before signing.

Contingency fee contracts are normally used in situations where there is a chance of a large payout, but it will either take a lot of investment and/or the client cannot front the money to pay the lawyer without a successful outcome.  Good examples are personal injury cases.

Contingency fee contracts can require clients to pay expenses associated with the case, but typically do not require payment for attorney/staff time.  Instead, the client will pay a portion of any recovery to the attorney as the fee.  Expect at least 33% of any recovery to be taken by the attorney, up to 50%.  It just depends on the individual case.  Some even break out the percentage further, with (for example) 30% of any recovery before a demand letter is sent, 35% of any recovery after suit is filed, and 40% of any recovery of a judgment, should the case go to trial.

As always, read the contract closely.  Each contract can vary so pay close attention to the terms.  If you have a question, ask!  Your lawyer would rather have you understand the contract and the process up front so that both of you know what to expect.

Retainer Contracts: Contracts with Lawyers (1 of 3)

Flat Fee Contracts: Contracts with Lawyers (2 of 3)

 

Contracts with Lawyers (2 of 3)

Post two of three deals with flat fee contracts.  These are the simplest contracts.  You pay the lawyer a set amount for a legal matter and that is it – no variance for how successful or not the case turns out.

Flat fee contracts are typically used for situations where the legal work/time/fees needed is easily determined.  Common cases would be a no-contest divorce or a criminal matter.

The problem with flat fee contracts is that most are nonrefundable, and the contract spells out the terms of the representation.  If your case evolves outside of the contract, you lose that money and the representation.  For example, you pay a flat fee for a no-contest divorce, then it becomes contested.  At that point, your lawyer is free to step out because the contract states his representation is only for a no-contest divorce, which no longer applies.  Should a situation like that arise, most lawyers are happy to renegotiate the contract, but do not expect another flat fee!

As always, read the contract closely.  Each contract can vary so pay close attention to the terms.  If you have a question, ask!  Your lawyer would rather have you understand the contract and the process up front so that both of you know what to expect.

Retainer Contracts: Contracts with Lawyers (1 of 3)

Contingency Fee Contracts: Contracts with Lawyers (3 of 3)