Everything To Know About Contingency Fees

Houston has the highest number of accidents in Texas. Drivers should be careful when they drive through Houston to avoid getting into a collision. If you’ve been injured in an accident, you have the right to seek compensation for your losses.

However, hiring a personal injury attorney to represent you can be a challenging task, particularly if you are worried about the fees.

Most personal injury attorneys offer contingency fee arrangements. A contingency fee arrangement means that you only pay the attorney if you win your personal injury case. It is advisable to hire a Houston, TX injury attorney who works on a contingency fee basis.

This article is going to discuss the benefits and disadvantages of the contingency fee arrangement and help you decide if it is right for you.

What is a Contingency Fee Arrangement?

A contingency fee is a payment to your lawyer that only occurs when you get some type of financial recovery in your case. Based on the complexity and risk involved in your case, your attorney will take an agreed-upon percentage of your recovery, which is often around 33% or 40%.

For instance, if you recover $100,000 in your case, your attorney will receive $33,000 or $40,000 as their fee, and you will keep the rest. If you do not recover anything, you do not have to pay anything to your lawyer.

What Types of Cases are Eligible for Contingency Fees?

Lawyers often use contingency forms of payment in most personal injury cases. Some of them include:

• Motorcycle and truck accidents
• Drunk driving accidents
• Wrongful death
• Dog bite accidents
• Slip and fall accidents

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The Variation on a Standard Contingency Fee

A standard contingency fee can be arranged in two alternative ways, depending on the type and outcome of the case.

Contingency Hourly Arrangement

In this type of arrangement, the client agrees on an hourly rate for the attorney’s services, but the attorney only gets paid if the case is successful. The lawyer’s fee depends on how much time the case takes and how much the lawyer charges per hour.

The attorney will also get a percentage of your recovery as fees.

Mixed-Hourly Contingency Arrangement

In this type of arrangement, the attorney and the client agree on a reduced hourly rate for the attorney’s services, and the client pays the attorney as the case progresses. The attorney also gets a percentage of your recovery if the case is successful, but the percentage is lower than in a standard contingency fee arrangement.

This way, the attorney gets some payment regardless of the outcome but also has an incentive to win the case.

The Pros of the Contingency Fee Arrangement

The following are the benefits of hiring a personal injury attorney on a contingency fee basis:

• You do not have to pay any upfront fees to your attorney. This can be a relief if you are struggling with economic difficulties due to your injury and cannot afford to pay for legal services out of pocket.
• You do not have to bother about paying for the litigation expenses associated with your case. Your lawyer will cover all these expenses and deduct them from your recovery at the end of the personal injury case.
• You can benefit from the expertise and experience of your attorney, who will handle all the legal aspects of your personal injury case.
• You can have peace of mind knowing that your attorney has a strong incentive to work hard and achieve the best possible outcome for you.

The Cons of the Contingency Fee Arrangement

Here are some of the downsides of hiring a personal injury attorney on a contingency fee basis:

• You may end up paying more than you would have if you had hired an attorney on an hourly or flat fee basis. Depending on the amount and timing of your recovery, the percentage that your attorney takes may exceed the amount of work they actually did for your case.
• If you have a risky case, then your attorney may negotiate a higher fee from you. Attorneys who work on contingency fees can be very choosy about the personal injury claim they take and avoid cases that appear to have a lower chance of winning.

Final Thoughts

The contingency fee arrangement is one of the easiest and most affordable ways to hire a personal injury attorney. 

Before you sign any contingency fee agreement, you must understand the terms and conditions of the contract and discuss any questions you may have with your attorney. That’s why you should consult with more than one attorney and compare their experience, fees, communication style, and reputation.

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