There are basically two ways attorneys
are paid. Attorneys can bill an hourly rate and
charge by the hour, or attorneys can work on a
contingency fee basis. A contingency fee is one
where the lawyers get paid only if money is recovered
for a claim. Payment for services is “contingent”
upon recovery. The contingency fee is a percentage
of that recovery.
Most attorneys who defend insurance
companies and big businesses charge their clients
by the hour. These defense attorneys bill their
clients on a regular basis, and they get paid
on a regular basis, regardless of whether they
win or lose their cases.
While insurance companies and big
businesses can afford to spend money on both the
attorney’s fees and the thousands of dollars
necessary to finance a case from beginning through
trial, most ordinary citizens would be unable
to afford to bring a lawsuit if they were required
to “pay as you go.”
To keep the courthouse doors open
for everyone, many trial lawyers agree to get
paid only when a successful result is achieved
for their clients. The contingency fee is based
on a percentage of the recovery. A contingency
fee can be any percentage as long as it is fair.
Fairness is determined by the complexity of the
individual case. Typically, contingency fees range
from 25-40 percent of the total recovery.
The contingency
fee levels the playing field. It allows anyone
to walk into a law office and say, “I have
been wronged, and it is not right.” If it
weren’t for contingency fees, only the very
rich would be able to challenge a wrong.
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