A contingency fee arrangement means a lawyer’s payment is contingent upon the successful outcome of a case. If the client wins, the lawyer receives a pre-agreed percentage of the settlement or award. If the client loses, they generally owe no attorney fees. This structure contrasts with hourly billing, where clients pay for legal services regardless of the case’s outcome.
Contingency fees, at their core, are an alternative billing method in law. Instead of paying an attorney by the hour or a fixed rate, a client agrees to give the attorney a percentage of any monetary recovery received from a lawsuit settlement or a court judgment. For most clients who have lost a loved one, paying an attorney on a hourly basis is impossible.
A typical contingency fee agreement might stipulate the lawyer receives 33 1/3 % if the case settles before filing a lawsuit, 40% if it settles after a lawsuit is filed but before trial, and 45% if the case goes to trial.
The contingency fee usually applies only to the attorney’s professional fee. Case expenses, such as court filing fees, deposition costs, medical expert fees, and record retrieval charges, are generally separate. These expenses are often advanced by the law firm and reimbursed from the gross settlement amount before the attorney’s fee is calculated and distributed.
This structure shifts the financial risk from the client to the law firm. The firm invests its resources – time, expertise, and capital – into the case, believing it has a reasonable chance of success. This investment acts as a strong incentive for the firm to thoroughly evaluate cases and pursue those with merit.
When a lawyer works on a contingency basis, their financial success is directly tied to the client’s success. This creates a strong alignment of interests. The lawyer is motivated to secure the best possible outcome for the client, knowing that their compensation depends on it. This contrasts with hourly billing, where a lawyer may be compensated regardless of the case’s ultimate resolution.
State bar associations and legal ethics committees typically regulate contingency fee agreements. These regulations often require agreements to be in writing, clearly state the percentage, outline how expenses are handled, and specify how the fee is calculated in different case scenarios. This regulatory framework aims to protect clients and ensure fairness.
Lawyers Responsible: Levi A. Monagle, and George “Ben” Davis.
Office Location: 127 Bryn Mawr Dr SE, Albuquerque, NM 87106.
Primary practice locations: New Mexico.
Ben Davis is licensed in Texas and New Mexico. Levi Monagle is licensed in New Mexico. Lawyers advance litigation costs which the client repays with a successful case. RESULTS ARE NOT GUARANTEED.