The big advantage is that you don't have to pay money to a lawyer to take your case and work on your case, if you hire that lawyer on a contingent basis. The lawyer does the work and usually pays all of the litigation costs, out of his or her own pocket. The costs of litigation can be substantial. However, for most lawyers, especially personal injury and workers' compensation veterans, why wouldn't you want contingent compensation? Contingency charges allow you to receive payments (because many slip and fall sufferers don't have the money for an hourly rate advance).
In addition, you can end up with a case that pays nothing. Or you could end up with 40 percent of a multi-million dollar verdict; the latter would require an unfathomable amount of billable hours to achieve the same payment. A contingency-based practice can be lucrative for those who can bear the risk. Contingency charges allow you to serve customers who would otherwise be unable to pay for your services.
One of the advantages of a contingency fee agreement is that you can negotiate the contingency charge. If you happen to have lower incomes, this allows you to hire quality legal representation instead of an inexperienced lawyer. In addition, if your claim is decided in a week or two, this means that you will have a little flexibility in how much you pay your lawyer. If you've been involved in a car accident, a victim of medical malpractice, or involved in a personal injury lawsuit, then you know the financial hardship it can cause for you and your family.
Having to worry about medical expenses, out-of-pocket costs, and legal fees can be daunting. If you are filing a lawsuit for injuries that were due to another party's negligence, then an attorney who provides contingency fees may be an excellent option. A contingency fee is a form of payment to a lawyer for his or her legal services. Unlike a fixed hourly rate, in a contingent fee agreement, lawyers receive a percentage of the monetary amount their client receives when they win or resolve the case.
That is, generally in a contingency fee agreement, the lawyer only receives compensation if the lawyer has successfully represented the client. In addition, the amount the lawyer receives depends on the outcome the lawyer obtains and often on the stage of the litigation at which the dispute is resolved. Contingency fees are particularly common in personal injury cases, where the successful lawyer receives between 20% and 50% of the recovery amount. The tax implications of your agreement and the benefits of hiring an attorney in a contingency agreement are complicated, and while they are consistent in most personal injury cases as described above, it is important to ensure all the consequences by consulting with a tax expert.
But, in some cases, such as in a personal injury lawsuit, a client may not have the funds to pay expensive attorney fees upfront.