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What Is A Contingency Fee?

What Is A Contingency Fee?Few relationships have such an alignment of interests as an attorney / client contingency fee payment plan.  Simply put, a contingency payment is a payment based on a recovery for the injured person.  In a contingency fee arrangement, the attorney receives no payment until the lawsuit is tried to verdict or settled.  After all the work has been done, the attorney receives a percentage of the recovery.

The percentage of the recovery a lawyer charges is dependent on the type of case and the complexity of the matter.  Nonetheless, the exact percentage should be agreed upon in writing soon after the retention of the lawyer.

In all cases there is a chance there will be no recovery–the case may not have merit or the defendant goes bankrupt, ect..  Under a contingency fee contract, if the lawyer does not win the case then the client will not be required to pay a fee. The client is not responsible for paying the lawyer for any of the time he spent on the case.

The ability to collect a percentage of the settlement or judgment provides a solid incentive for a lawyer to best serve a client. This is another reason why contingency plans are very popular with clients. After all, the potential financial reward of getting the highest settlement benefits the attorney and the client equally. So, the attorney will not perform at anything less than his or her best because there is a huge incentive for successfully litigating the case.

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