Contingency Fees: A Double-Edged Sword for Attorneys?

Contingency fees can be a good deal for attorneys, or a really bad deal. A typical contingency fee is one-third of the settlement awarded, or 33 percent, but they may go as high as 50 percent or as low as 15 percent, depending on the type of case and the attorney handling it.

Why Do Attorneys Accept Contingency Fees?

The attorneys who accept contingency fee cases typically represent clients who don’t have the resources to pay high hourly attorney fees, are very selective about the cases they take, and practice in an area of law in which contingency fees are common, such as:

• Personal injury
• Cases involving the Fair Debt Collection Practices Act
• Product liability matters

Contingency fees are occasionally available in these legal areas:

• Employment law
• Hourly wage issues
• Large debt collection cases

Contingency fees are almost never available in these areas of law:

• Family law issues, including divorce, adoption, and child custody
• Criminal defense
• Bankruptcy
• Immigration
• Business law, including contracts, wills, and trusts
• Trademark, copyright, or patent law

The Cons of Contingency Fees

Generally, most attorneys would rather not work on a contingency basis because:

• There is a chance that they (and their firm) won’t get paid at all
• There is a chance that their client will perceive that they were paid too much (if the case settles quickly)
• Any recovery is delayed until it is collected from the opposing party (which can take several years)

Experienced attorneys typically know a good case from a bad one, and don’t take cases where there isn’t a reasonable expectation of winning a fair amount of money. Basically, attorneys who are selective about the contingency fee cases they accept will likely succeed financially, while those who take small or difficult cases on contingency may struggle.