In a law firm, “contingency” refers to a type of fee agreement between a lawyer and a client where the lawyer’s fees are contingent upon the outcome of the case. Under a contingency fee arrangement, the lawyer only gets paid if they win the case or achieve a settlement favorable to the client. Here are key points about contingency fees in law firms:

  1. No Win, No Fee: The primary characteristic of a contingency fee arrangement is that the lawyer does not charge any fees if the case is lost. This can make legal services more accessible to clients who may not be able to afford hourly or fixed fees upfront.
  2. Percentage of Recovery: If the case is successful, the lawyer’s fee is typically a percentage of the amount awarded or settled upon. This percentage varies depending on the complexity of the case, the jurisdiction, and the law firm’s policies, but it commonly ranges from 20% to 40%.
  3. Expenses: While the lawyer might not charge fees unless the case is won, the client may still be responsible for other expenses related to the case, such as filing fees, costs for expert witnesses, and other court costs. Some law firms might advance these costs and recover them from the settlement or award, while others may require the client to pay these expenses as they arise.
  4. Incentive for Lawyers: Since the lawyer’s payment depends on the case’s success, there is a strong incentive for the lawyer to work diligently to win or favorably settle the case.
  5. Common in Certain Areas of Law: Contingency fee arrangements are most common in personal injury cases, workers’ compensation, and other types of civil litigation where large financial damages are sought. They are less common in criminal defense, family law, and other practice areas where monetary compensation is not the primary focus.

Contingency fee agreements provide an opportunity for individuals to seek legal redress without the barrier of high upfront costs, aligning the interests of the client and the lawyer towards a successful outcome.