What is a contingent fee agreement, and what should I look out for?

Access to Justice

A contingent free agreement gives everyday people access to justice because the attorney earns a fee only upon recovery on behalf of the client.  If the attorney makes a recovery, the fee is a percentage of the compensation recovered. Thus, the fee is “contingent” or conditional upon recovering of some money for the injured client as compensation.

When Are Contingent Fee Agreements Used

Attorneys use contingent fee agreements when representing clients on personal injury matters, including auto collision injuries, third-party claims arising from Oregon Workers’ compensation cases, or Employer Liability Law claims related to construction or logging accidents. Although contingent fee agreements are great because they allow an injured person access to legal representation, there are a few things to look out for when reviewing a contingent fee agreement.

What is the Fee?

These agreements provide that the fee is a percentage of the "recovery" or "settlement."  The typical fee many people see calls for a fee of one third of the recovery amount, depending when the case resolves. When reviewing a contingent fee agreement, look to see what "recovery" the fee is charged from.  Some attorneys may offer a lower percentage as a fee, but it may not truly better your recovery when you consider what the fee is charged from.

For example, in an auto collision case, many people have personal injury protection coverage, which is a benefit that pays medical expenses, regardless of who is at fault.  There are some cases where there may be a dispute about whether certain medical treatment is necessary, but in many cases, these expenses are covered, and the attorney will have no role in making sure these bills are covered. Should an attorney include this as the "recovery" on a contingent fee agreement? This is a good question to ask.

What About Costs?

Another part of the agreement addresses expenses, or "costs." Costs are the expenses an attorney will incur in building a case for their client.  Typical costs in an auto injury claim include the cost of obtaining a police report, medical records, and court filing fees. Many attorney’s contingent fee agreements provide that the client is responsible for any costs incurred in preparing the case. Some attorneys may require that the client deposit funds into the attorney client trust account, and others will offer to pay the costs in advance, and then seek recovery at the case’s conclusion. It is a good idea to get a clear understanding of how costs are handled in the case. Also, a prospective client should ask what items are considered “costs.” Some attorneys will charge for long distance calls, photocopies, and postage.

Does the Contingent Fee Amount Change?

Many fee agreements will have a graduated fee schedule. This means that the fee goes up depending on how far the case goes.  If a case is filed in court, the costs are going to go up and the fee amount may increase as well.  This only makes sense because trials are risky, labor intensive, and expensive.  Our office has seen fee agreements from other attorneys that charge 50% of any recovery should the case go to trial. Frankly, that’s ridiculous. 

What If I Don't Like My Lawyer

Finally, we tell all potential  clients that they can fire us if they are unhappy with our work. However, our fee agreement provides that we are entitled to be compensated for the time we have in working on the case. Any client consulting with an attorney needs to know what the fee agreement says if the client or the attorney decide to dissolve the relationship and move on.

We go through the fee agreement paragraph by paragraph with all our potential clients so you can make an informed decision. If you are concerned about whether you can afford an attorney or whether you need an attorney in the first place, contact us. We will explain our fee agreement and help you decide whether an attorney should get involved with your claim.

Joe Di Bartolomeo
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Top-rated Personal Injury Lawyer Helping Oregon and Washington Families