Contingency Fees: Read this Before You Hire a Lawyer

Before you hire an attorney on a contingency fee basis, make sure you understand the risks to you and how to protect your rights.

Learn which areas of law generally involve contingency fees and what you should consider before hiring a contingency fee lawyer.

Contingency Fees Can Be Frustrating

Contingency fees can be frustrating to clients and attorneys. In general, contingency fees are usually a problem for the client or attorney:

  • If a case settles quickly or recovers a lot of money, clients may feel frustrated that the attorney was paid more than the attorney deserves.
  • If a case goes longer than expected or recovers little money, the attorney may be frustrated by lost time and expenses.

In other words, contingency fees by nature will not be accurate, and either the attorney or client may feel shorted. Attorneys understand this risk, and they offset being paid too little on some cases with being paid more than expected on others. Still, clients paying a large fee to an attorney may feel frustrated.

Contingency Fees are Not Available for All Legal Matters

Our firm is often contacted by people who have never worked with an attorney. Their impression of attorneys is shaped by TV commercials, shows, and movies. They often think most attorneys are paid on contingency, but in reality, contingency fees are only available for a few areas of law, which happen to be presented frequently on TV.

Contingency fees ARE generally available for these legal areas:

  • Car accidents, boat accidents, work accidents, and other personal injuries
  • Fair Debt Collection Practices Act (FDCPA) violations against creditors for harassing debtors
  • Defective products that cause injuries

Contingency fees MAY BE available for these legal areas:

  • Employment law and hourly wage issues
  • Collection of large debts

Contingency fees are RARELY available for these legal areas:

  • Real estate
  • Business litigation

Contingency fees are NEVER available for these legal areas:

  • Criminal defense (DUI, traffic, drug, and other charges)
  • Adoption
  • Immigration
  • Divorce and similar family law issues
  • Bankruptcy
  • Drafting a contract, will, trust, or other legal documents
  • Starting a business
  • Registering a trademark, copyright, or patent

Which Lawyers Accept Contingency Fees?

Here are some of the factors that lawyers consider when determining whether to accept a case on a contingency fee basis.

In general, most lawyers prefer not to do contingency cases because (1) there is a risk the firm will get paid nothing, (2) there is a risk the firm will get paid too much and the client may be frustrated by that, and (3) any payment is delayed until collected from the opposing party. For these reasons, many firm rarely accept contingency fee cases.

The lawyers who frequently accept contingency fee cases:

  1. practice in an area where contingency fees are common (see the list above);
  2. generally represent people without resources to pay hourly attorney fees; and
  3. are very selective in the cases they accept.

What is a Typical Contingency Fee?

As you probably know, contingency fees mean you only pay attorney’s fees if the attorney wins money for you. In general, contingency fee percentages range from 33% to 40%, depending on the amount the client could potentially win, the strength of the case, and other factors. I have seen contingency fees as high as 50% (for small cases) and 15% (for very large cases).

  • Typical: 33% (one third) to 40%
  • Highest I have Seen: 50%
  • Lowest I have Seen: 15%

What is a Fair Contingency Fee?

One factor affecting contingency fees is the amount of out-of-pocket expenses the firm will need to cover the case. These include mediation fees, court reporter fees, transcript fees, expert witness fees, filing fees, etc. Although the client may ultimately be responsible for these expenses, the firm may not ever recover them, resulting in losses of both time and money if the case does not result in enough money.

Under Minnesota law, the factors to be considered in determining the reasonableness of a fee include the following:

  1. the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
  2. the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
  3. the fee customarily charged in the locality for similar legal services;
  4. the amount involved and the results obtained;
  5. the time limitations imposed by the client or by the circumstances;
  6. the nature and length of the professional relationship with the client; and
  7. the experience, reputation, and ability of the lawyer or lawyers performing the services.

In other words, since every case is different, these factors will need to be applied to the individual facts and circumstances of your case.

Should You Hire a Lawyer on Contingency?

Normally, people who hire a lawyer on contingency do not have the option of paying the lawyer’s hourly rates because they simply can’t afford them. To seek justice, they must accept a contingency fee arrangement.

If you are hiring a lawyer on contingency, keep in mind that the lawyer is first concerned about ensuring the lawyer benefits from the deal. In general, lawyers are far more experienced with contingency fees than clients, so lawyers know better how to calculate contingency fees so the lawyer is not disadvantaged.

Experienced attorneys do not take contingency fee cases if it is a bad deal for them. For example, attorneys routinely reject being paid on contingency for small financial cases, complex cases, and time-consuming cases. However, attorneys routinely accept contingency fee cases that have the potential to win a lot of money, are simple, and will not take much time.

Conclusion: Contingency Fees May Be Unfair

Attorneys who are selective about the contingency fee cases they accept will succeed financially. Attorneys who take small or difficult cases on contingency may struggle financially. As a result, people may feel frustrated because their lawyer makes a lot of money from little work, or people feel frustrated because no lawyer will take their case.

In conclusion, contingency fees are generally a very inaccurate (some would say “unfair”) way to pay attorneys, but since people may not have the funds to pay usual attorney rates, our justice system permits the use of contingency fees. JUX generally does not take any cases on a contingency basis.

Leave a Public Comment

  • Michael
    October 22, 2016, 5:06 am

    Unfortunately, the attorney’s explanation makes it clear that in America the legal system is reserved for the wealthy and almost wealthy. Regular folks need to just get over it. No one is on our side.

  • I. comfort
    October 16, 2016, 9:25 pm

    I have an obvious medical malpractice, discrimination based on disease and disability, vulnerable adult/elder abuse case, possibly wrongful death . I have research to back up the multitude of wrong doing. I even have paid for a medical legal company to review of medical records. I could not find a lawyer to take the case, Not even the pro bono lawyer(s).
    I am struggling for one year with brain and other injuries sustained in a high way semi accident (I was rear ended). For one it is not recommended and 2, It is impossible for me to file this case myself since it is too complicated for my physical, emotional, psychological and mental status to handle.
    How does the statutes of limitation apply to me and my situation? Is there a possibility I can petition for an extension of the statutes of limitation? Is there a lawyer that can help in anyway? There is no way I can afford the expert opinions to confirm the legal report I have. (One of the lawyers said he will take the case if I obtain the expert opinion). Besides, the experts only deal with attorneys. Where and how do people in my position get a day of justice? How do l access legal the system and quality health care as promised by this country? What are my options or what can I do? Happened in Minnesota. I need all the help I can get.

  • Jolene
    August 9, 2016, 11:48 am

    Unjustifiable conduct at Saint Cloud Hospital Arbitrary and Capricious Drug Testing resulting in termination/ denied unemployment benefits. 10/29/13- I had filed an incident report in regards to a Registered Nurse stealing narcotics from a patient and during our shift, she had been assisting a patient with transferring in which the patient had fallen and received serious injuries. Prior to filing the incident report, I have never received any complaints, negative performance reviews, or any remediation pertaining to my practice of nursing. 11/1/13- Reprimanded while at work by supervisor in which she had stated, ” I have grave concerns about the safety and well-being of your fellow co-workers and the patients while you are at work Jolene”. I had asked her what about the incident report that I had sent to you, in which she sternly replied, “we are not here to talk about anyone other than yourself Jolene”. 11/3/13- Terminated due to refusal to provide an UA. Reasonable Suspicion Drug Testing. I had provided two UA samples in 2.5 hour time frame, in which the heat strip mechanism had been defective/faulty of measuring temperature. (The Lab Technician had stated this within my presence) The Lab Technician did not document any pertinent information on the chain of custody document, did not provide a signature on the chain of custody document (I have evidence of falsification/alteration of the chain of custody document) Negligence of documentation/providing quality assurance of procedure, provided no safeguards/reliability for me as an employee due to reckless conduct. Only one Chain of Custody form when I had provided two urinalysis samples.(NO mention of UA volume insufficiency) 11/5/13- I called the scheduler on Neuroscience and Spine unit to verify if I could come back to work, she said I was in the system but my name had been crossed off the list. The scheduler reported my phone call to my supervisor in which she had proceeded to call me and stated again, “I still have grave concerns regarding the safety of the patients and co-workers while your at work Jolene”. I asked her when I was able to return to work, in which she had replied, “you are not to return to work until further communications are made,” in which I asked, “what does that mean?” She stated that, “there is going to be a meeting with human resources”. She also stated that I was not allowed to return back to work because I did not provided a viable UA sample, I had replied, “it was beyond my means of control” in which she had stated, “you still were unable to provide a suitable UA”. (NO mention of UA volume discrepancy) 11/18/13- I called Human Resources to find out what was going on in which I was told I had been terminated effective 11/3/13 due to providing two urinalysis samples that were 28ML and not the required 30ML and that my urine was too cold. I know for a fact that I had provided a sufficient amount, it was never voiced as a concern during the collection process that they could not use UA samples due to insufficient volume. I have countless documents in which my Supervisor had recklessly slapped together information that is false. (The chain of custody document that I have has extremely peculiar markings over the lab technicians signature/ date and time/ and other fields) I without a doubt believe that they erased or covered up her signature on the chain of custody document. I had called the laboratory to find this information and was told that they had no records on file, I had called the Neuroscience and Spine department in hopes of contacting one of the charge nurses whom I had sent the incident report but only was able to talk to voice mail machine. I received a letter in the mail stating if I contact the hospital again that they would be filing a harassment charge against me. I absolutely cherished my career at Saint Cloud Hospital, and it is still just absolutely devastating to me that I been treated this way after doing what I thought was the ethical/right thing to do.
    (I have a substantial amount of evidence to back up my claims)

  • RuthWoods
    August 5, 2016, 2:45 am

    My other half got up diarera plus vomiting. Checked in emergency room. They gave him iv’s for about 12 hr plus $13000 tests. After 12 hr tests doc said lest test you by giving you some water. My Tom started through in up. Doc said let’s keep you thru night. Next morning doc said, “are you ready to go home young man?” NO feed back about tezts. No apparatus knowledge that Tom could not keep any liquid down mush less at least check his intake ability. I Hollard to doc , you will not check him out without seeing if he could keep breakfast down. Thus he kept liquid breakfast down. Checked out near noon 2/22/16. No f=dback about tests even. Out of hospital Thursday, dies massage heart attack next Mon PM.
    Who would be a Denver or Aurira, Co attorney & most likely on contingency?

  • Faith barrow's
    May 21, 2016, 10:03 pm

    I have a question, but first I will explain my situatoon I sued my former boss/ job for working off the time clock and various other related violations , well it resulted in them settling to pay $8000 dollars, but for some reason my attorney will get $5000 all at once and I am getting ,,$3000 spread out over ,3 months is that right

  • Sayed
    February 23, 2016, 2:20 pm

    I brought my car from overseas in December and it passed all the federal and state inspection. I then had the car serviced at the dealership to ensure that it was cared for. A few weeks later I had a brake problem and took it to Brake World. I was told that the master cylinder needed to be replaced along with all need brake pads and two new rotars.Two days later I was contacted and told I needed a new brake booster as well. I agreed to have the additional work done.
    I was then contacted the following day and they told me that while they were trying to test the car they turned it on and one min later there was white smoke from the exhaust pipe and the engine blew.
    His insurance company has denied any wrongdoing and has refused two times to cover the claim that we have against him.

    I would like to know if Indo have a case against Brake World or not. There are three hole in the engine and I have video from the dealership showing that when the lower engine block was removed along with the oil pan the oil was straight out of the bottle clean . The dealership and its technicians all agree that the damage is not internal engine failure. It was something they did to the car and then tried to cover up.

  • Iris Wait
    February 17, 2016, 4:28 pm

    If you hire Representation on a contingency basis for a divorce case and then the Attorney deserts you 1week before the final court appearance or trial, does he/she still eligible to receive money? Is it lawful for the same Attorney that deserts you, to put a lien on the client’s awards after the divorce was finalized by another Attorney? Please let me know. Thanks.