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Pros and Cons of Contingency Fees
One method that lawyers can use to bill their clients is the contingency fee. A contingency fee is an agreement where the lawyer does not collect a fee unless the client wins the case – the lawyer then takes a percentage of the award. Contingency fees have some advantages and one main disadvantage.
One main advantage of contingency fees is that you do not have to pay your lawyer up front. That way, you are not faced with large legal bills while you are waiting for the case to make its way through the courts. Many feel that this “opens the courthouse doors” to lower-income people who otherwise would not have access to legal assistance.
Another advantage is that your lawyer does not collect a fee if you lose (although you still may be responsible for costs the lawyer incurs trying your case). This can provide some peace of mind for you as well – if your lawyer is willing to risk not collecting a fee based on your case, then you probably have a good shot at winning your lawsuit.
The main disadvantage of contingency fees is that it may end up costing you more than standard hourly billing. If you agree to a contingency fee of one third of your eventual award, you owe that amount regardless of whether it takes one year for the case to wind its way through the courts, or if your case is settled within one week. Some lawyers may offer a flexible contingency fee depending on the result of your case, and it is worthwhile to ask if that is available when hiring a lawyer.
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