To put it another way, with a contingency fee, payment for your attorney's services is "contingent upon" your receiving some amount of compensation. Your attorney will take an agreed-upon percentage of your recovery. This percentage is often around 1/3 or 33%.
That is, in a contingency fee agreement, the lawyer only receives compensation if the lawyer has successfully represented the client. Further, the amount the lawyer receives is contingent upon the result the lawyer obtains and often on the phase of litigation in which the dispute settles..
The standard contingency fee for an attorney is a percentage amount rather than a fixed amount. Most personal injury lawyers charge 33 1/3 percent if the case settles without filing a lawsuit and 40% if a lawsuit is filed. Most employment lawyers charge a 40% fee.
[3] Contingent fees, like any other fees, are subject to the reasonableness standard of paragraph (a) of this Rule.
The TF is of the view that performing an engagement for a contingent fee for an audit client creates a self-interest threat in that it puts the firm in a position of wanting the same outcome as the client.
Factors to be considered as guides in determining the reasonableness of a fee include the following: (1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.
Phase Contingency This contingency is normally calculated as a percentage. If the phase is 100 days of effort, contingency at 20% would be another 20 days. As the project progresses, the level of risk reduces as the requirements and issues become known, so the percentage will be reduced.
A flat fee is when a lawyer charges a specific, total fee. Lawyers typically offer flat fees for cases that are relatively simple or routine, such as creating a will, getting an uncontested divorce, or resolving a traffic ticket.
As such, contingency fees are only used in cases where money is being claimed: personal injury, medical malpractice, wrongful death, workers' compensation, disability, and some employment law claims, for example.
Contingency fee cases can sometimes be seen as a risk, because the lawyer does not get paid unless they win the case. However, the risk is lower if you are more likely to win your case. With a lower risk, the more likely you are to find an attorney willing to take the case.
The acceptance fee is the fee charged by the lawyer for merely accepting the case. The rationale behind this is, once the lawyer agrees to act on behalf of a client, he generally loses the opportunity to handle cases for the opposing party.
Commissions/Contingent Fees Acceptance of a commission or contingent fee is allowed, but payment of a commission is prohibited. Acceptance of a referral fee is also prohibited.