How Contingency Agreements Work

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How Contingency Agreements Work

Two business partners signing a document

We all know that lawyers cost money, sometimes lots of money, and for people without plenty of extra funds on hand, some have a basic question when they need a lawyer: How do I pay for one? In many cases, a program called a contingency fee is used.
At the offices of Matthew Jube, contingency fees are common for many of our personal injury attorney services. How does a contingency fee work, and what are some of the factors that affect it? Let’s take a look.

Purpose of Contingency Fees

The purpose of a contingency fee is to allow people without the means to pay for an attorney up front to still receive the services they deserve. This is an agreement where any payment to the lawyer is contingent upon them winning a result, generally a sum of money – only at this time can they be paid. The typical split goes as follows:
• For cases settled before a trial: 33 percent to the lawyer, 66 percent to the client
• For cases won in trial: 40 percent to the lawyer, 60 percent to the client
Now, these rates are negotiable. But the basic theme remains the same: Without a successful result, you won’t have to pay the lawyer an exorbitant fee of any kind.

Effect of Case Costs

Now, there are a couple extra factors you have to consider here, one of which is case costs. There are numerous elements of a given personal injury case that may cost money to develop – areas like the police report, investigator fees, medical bills and reports, filing fees, service costs, arbitrator or mediation fees and even potential witness fees could play a role.
How these costs are allocated will depend on the contingency contract you sign. In some cases these costs are taken off the top before deciding on fees, and in others the fee is taken before the costs are taken out of the client’s share.

Lien Effects

In some cases, liens will be incurred. These can be for things like ambulance bills or emergency room care – in some cases, these will reduce the amount the client is re-paid by the amount of the attorney’s fees, though this can be complicated and can depend on the type of lien.
For more on contingency fees, or to learn about any of our criminal defense services, speak to the staff at the offices of Matthew Jube today.