Contingency Fees

If you are the plaintiff (the one suing another) in a commercial lawsuit your attorney may be willing to take your case on contingency. If you win he gets a cut and if you lose he does not charge you for his/her time.

The typical contingency fee is 33%. But it can be lower and as high as 50% depending on the case and the legal specialty.

Some attorneys have a scale depending on how the case is resolved. For example the contingency fee might be 33% if the case is settled prior to going to trial, 40% if you go to trial and get paid without an appeal and 45% if you have to go though the appeals process before you collect on your judgment.

One of the things that can be subject to negotiation that has always bothered me is that these contingency fees are caculated based on a percentage of the gross settlement before expenses are subtracted. So for example if you get a $200,000 settlement and have had $25,000 in expenses with a 40% contingency fee here is how it is how the fee is usually calculated: 40% of $200,000 = $80,000 fee. But another way to do it and one that also provides the attorney more encouragement to keep the expenses down would be to calculate the fee as follows: $200,000 gross settlement less $25,000 in fees = $175,000. The fee would then be $175,000 * 40% = $70,000 or $10,000 less than the standard method.

If you are confident that you are going to win and collect on your lawsuit and have sufficient funds you may want to negotiate paying for the fees as you progress in order to receive a lower contingency fee.