Law firms and attorneys can bill their clients in several different ways. For example, they may charge a flat rate fee for a specific issue or bill at an hourly rate for work they complete on a case.
Lawyers may also use a fee structure called a contingency fee arrangement. A contingency lawyer in California, or an attorney who works on a contingency fee basis, is an attorney who agrees to work on their client’s case in exchange for a percentage of the damages award that the client is awarded if they win the case.
Generally, the percentage will typically fall somewhere between five and fifty percent of the damages that the client recovers. A contingency fee arrangement may be very beneficial for a client who is in need of legal representation.
A client may want to inquire about this type of fee arrangement because they will not be required to pay the lawyer who works on a contingency fee basis until the case is over and only if the lawyer can win their case. This means that the client will not have to pay their attorney for their work unless they win their case.
It is important to note, however, that there may be exceptions, such as when the client and the attorney choose to enter into an agreement that specifies something different or when a client has to pay some court costs, such as filing fees. A client and their attorney will typically work out these details during the client’s initial consultation meeting with their lawyer.
Attorneys who use contingency fees are typically hired to represent plaintiffs in complex civil cases. Examples of the types of lawsuits that contingency fee attorneys commonly work on include:
- Bankruptcy cases
- Personal injury lawsuits
- Professional malpractice disputes or lawsuits filed against surgeons, doctors, lawyers, etc.
- Various types of class action lawsuits
It is important for clients in California to be aware that an attorney must adhere to the California business and Professions Code (BPC) section 6147, which outlines the following requirements that contingency fee agreements between lawyers and clients must include:
- The agreement must be in writing and signed by the lawyer and the client
- The agreed-upon contingency fee amount
- A statement of the how the costs and disbursements will affect the contingency fee as well as the client’s recovery
- If the client will have to pay the lawyer for matters not covered by their contingency fee
- The fee is negotiable between the lawyer and the client and is not set by law
The lawyer must give a signed copy of the agreement to their client or client’s representative when the contract is entered into. California law also requires that, following a settlement or win, the lawyer has to provide a written statement to the client that shows the recovery and how it was calculated.
If an individual needs to file a civil lawsuit in California, they should consult with a local attorney in California and inquire whether or not they work on a contingency fee basis.
How to Find a California Lawyer Who Will Work on Contingency Basis?
If an individual is looking for a civil lawyer who works on contingency, there are several methods they can use to help them find an attorney. For example, they can perform a quick online search for contingency lawyers in their area who practice in the legal field their issue involves.
An individual can also find a California contingency lawyer by submitting their issue to LegalMatch.com. LegalMatch can match an individual with a lawyer who practices in their area and in the proper legal field and ensure that the lawyers who contact them are willing to work on a contingency fee basis.
How Much Do Contingency Lawyers Charge?
The contingency fee structure will depend on the agreement between the attorney and their client. Attorneys cannot use a contingency fee arrangement if the case involves a criminal or family law issue.
An attorney is not permitted to collect a portion of the damages award if it is against the statutory laws in California or unreasonable. Some attorneys or firms may assign different percentages based on the different stages of the lawsuit.
For example, if the case is settled before it goes to trial, the attorney may take twenty or twenty-five percent of a client’s settlement award because they did not have to put in the additional work that is required for a trial. In contrast, if the case does go to trial and the lawyer prevails, they may take a higher percentage of the client’s damages award because they did have to put in the extra work on the case, such as working during the trial.
In addition, if the opposing party appeals the decision of the court, the attorney’s cut may increase because they will be required to perform additional work on the case, which may last until the court issues a final decision.
How Is the Percentage Determined?
The percentage an attorney charges will depend on numerous factors, including:
- The amount of work and time that the attorney will need to put in to officially resolve the legal issue
- The number of issues and the complexity of the issues in the case
- The skill, reputation, and experience of the lawyer being hired
- The professional relationship that exists between the lawyer and the client, for example, a 20-year business relationship vs. a brand new client
- The chances of the client winning the case
- The portion of costs that will not be covered by the contingency fee arrangement, such as:
- The cost of hiring an expert witness
- Filing fees
- Various other court-related expenses
Additionally, when evaluating these factors, the attorney will be required to make an educated guess regarding how complex the issue may become and how long it may potentially take to resolve the case. For example, a lawyer may be required to predict whether they believe the case will settle before it goes to trial or if the legal issues involved will require a trial court to issue a final decision.
In general, an attorney will be more inclined to work on a contingency basis if they believe there is a good chance that their client will prevail and that the amount of damages that may be awarded will be substantial enough to compensate them for their time.
How Can I Negotiate a Contingency Fee Agreement with a Lawyer?
It may be possible to negotiate a contingency fee agreement with a lawyer. There are steps a potential client can take before engaging in negotiations to help support their request for a specific fee amount.
Potential clients should take the time to research the rates that lawyers are charging in their location for similar types of cases. They can also discuss aspects of their case with their attorney. These include how complex the case is expected to be and whether there may be the opportunity for fee reductions if a quick settlement or minimal litigation is required.
It is important for potential clients to get their contingency fee agreement in writing. It is important to be aware that it is possible to agree to different percentages when different outcomes occur in the case as well.
There are several things to keep in mind when trying to negotiate a contingency fee, including:
- The standard percentage for the area
- This typically ranges from 20% to 40%, with most falling in the middle
- The complexity of the case
- If a case seems straightforward, it can impact the fee percentage
- Incentives for settling the case early
- It may be possible to get a lower percentage fee if the case settles before going to court
- Client participation
- A potential client may be able to request a lower fee if they are actively helping gather evidence or assisting with case preparation
- Tiered fee structure based on the outcome
- It may be possible to agree on a tiered fee structure, with the fee decreasing the earlier the case is resolved
A potential client should approach a fee negotiation keeping the following issues in mind:
- They should be informed of the average contingency fees for similar cases in their area
- A client should be open about their expectations and financial situation
- The client should ask what will be included in their contingency fee, for example, filing fees or expert witness costs
- It is possible to speak with multiple attorneys, especially if they offer free consultations, to see who will best fit an individual’s needs
- Get the final fee agreement in writing with signatures of the potential client and attorney
When negotiating contingency fees, it is important to remember that attorneys are bound by ethical rules on these issues, so they may not be able to agree to an unreasonable demand. In addition, if a potential client has questions or concerns about a potential agreement, they can always have another lawyer review the contract before they sign it.
What Types of Lawyers Work on Contingency Fees?
Personal injury attorneys are the type of lawyers who are most commonly employed to work on a contingency fee. This is typically because their clients are individuals who have been injured and would not be able to afford the attorney’s legal services without the contingency fee arraignment.
Employment lawyers may also work on a contingency fee basis, specifically those that handle employment discrimination cases. Similar to a personal injury lawsuit, an employment discrimination case is usually brought by an individual who may be entitled to damages but cannot afford the cost of an attorney without a contingency fee arrangement.
Other types of cases where an attorney may agree to work for a contingency fee may include:
- Sexual harassment lawsuits
- Professional malpractice cases
- Debt collection disputes
When Are Contingency Fees Not Allowed?
As noted above, contingency fees are not ethically and legally permitted in cases involving family or criminal law issues because these could potentially encourage attorneys to promote divorce or criminal activity. It is not necessarily illegal to use a contingency fee arrangement in a case with an obvious outcome. However, it would be wise for an attorney to bill at an hourly rate if a case would clearly lead to a win.
Will I Get Monthly Bills from a Lawyer Paid on Contingency?
Whether or not a client will receive a monthly bill from their contingency lawyer will depend on the arrangement of the parties. For example, some lawyers may send their clients a monthly breakdown of their work so that a client can see what work their lawyer has been doing on their case.
In some situations, a client may also request that their attorney send them a monthly bill so they can account for the time and resources the attorney is spending on their case. Clients may also receive monthly bills for different reasons.
For example, a contingency lawyer does not get paid until the case is completed and they win. At the same time, the client may still be responsible for the payment of certain costs that are incurred during the course of the case, such as court filing fees or the costs of hiring an expert witness.
Even though attorneys have an ethical duty to discuss the client’s billing arrangement, the client should ask questions about any billing issues they do not understand.
What Are the Pros and Cons of Contingency Fee Agreements?
There are numerous benefits and risks to using contingency fee lawyers and fee agreements. When an individual needs legal assistance and are considering hiring an attorney who charges clients using contingency fees, there are things to keep in mind, including:
- The benefits of using contingency fee agreements:
- The client does not have to make upfront payments
- Not getting paid unless they win is motivating for the lawyer to work as hard as they can
- Because they are no upfront costs, it allows individuals the opportunity to file cases against defendants they normally would not have the means to
- The risks of using contingency fee agreements:
- The client may pay higher fees if their case is successful
- The availability of lawyers who will handle smaller claims may be limited
- A client may have to pay their lawyer a high percentage of their award
Should I Hire a Lawyer on a Contingency Fee Basis?
You might have a legal issue that requires assistance from an attorney but you cannot afford the cost of hiring a lawyer. In that case, it may be helpful to look for contingency lawyers in California. You can contact lawyers in your area and ask whether they charge on a contingency fee basis.
LegalMatch is an excellent resource for finding a contingency lawyer in your area who is ready to begin work on your case. Finding a lawyer who works on a contingency fee basis can help you get the legal assistance you need without having to pay an expensive hourly or flat rate.
