Updated: Nov 17
Learn how no win - no fee works and why most cases aren't contingency friendly in California.
What Does Contingency Fee Basis Mean in California?
If you hire a California attorney on a contingency basis, you agree to pay for his or her services only if he or she wins your case. This payment structure protects the typical claimant who lacks the financial resources to pay legal expenses out of pocket. It enables any plaintiff, regardless of their financial status or economic standing, to have competent legal counsel without going into debt. Attorneys specializing in personal injury, medical malpractice, sexual harassment, and employment law frequently use this payment method.
In general, legal firms that work on a contingency fee basis do not charge any fees up ahead. To employ a lawyer, you will not be required to pay a retainer fee. In addition, the lawyer will cover all of your case's fees, so you won't have to worry about money. An investigation, filing fees, and the expense of engaging an expert will all be covered by your lawyer. If and when your lawsuit is won, the lawyer will be compensated for these expenses.
How Does a Contingency Fee System Work in California?
You will only pay a contingency fee lawyer at the end of your case and only if the lawyer successfully obtains a financial recovery on your behalf. You will not have to pay out of pocket when you do pay. Rather than charging you for legal services, your lawyer will charge you a portion of the settlement or judgment award as a service fee. The percentage charged varies depending on the law firm and the case.
The most typical contingency fee rate is 33.33 percent, equating to roughly one-third of the plaintiff's total recovery. The percentage may be higher if the lawyer is taking a greater financial risk by accepting your case. Most law firms charge extra if your case must go to trial because a trial involves more effort than an insurance settlement. Before the commencement of your case, you and your lawyer will agree on a percentage. Every legal company is unique. Discuss all of the fees and litigation costs that may be associated with your case with your lawyer ahead of time.
What Are the Benefits of Contingency Fees?
The most apparent advantage of hiring a lawyer who works on a contingency fee basis is that you can always pay the legal expenses. However, having highly driven counsel is a distinct benefit. Your lawyer will not be paid until you win your case. The amount of money your lawyer collects on your behalf will determine how much money he or she earns. This is a tremendous motivation for an attorney to seek the highest amount of compensation for you and your damages.
What Are Some Of The Costs A Contingency Lawyer in Los Angeles Pays On My Behalf?
In some cases, regardless if you win or lose your case, you probably will have to pay court filing fees, the costs related to deposing witnesses, and similar charges.
Some of the expenses typically fronted by lawyers that work on contingency may include:
Investigation of the accident scene by experts
Re-creation of the accident scene & trial exhibits
Obtaining medical records
Obtaining police reports
Fees for hiring expert witnesses
Filing a lawsuit and other filing fees
Discovery phase costs of gathering all evidence available
Tracking down witnesses and parties in the case and issuing a subpoena
Ongoing phone calls, visits, and dialogue with all parties in the case
Most Cases Are Not Contingency Fee Friendly
Let's assume you cannot pay your rent. Your landlord sues you and gives you a 30-day notice to vacate the apartment. One night, you watch a commercial from an attorney who says he won't charge any fees unless he wins.
You call the attorney, and he immediately rejects your case, and you are left to wonder, "why won't he accept my case on contingency?" The reason he's not interested in taking your case it's that there no way he can be compensated for his legal services.
Similarly, a divorce attorney, a business litigation attorney, and most other attorneys will not accept a contingency fee arrangement. A lawyer will accept contingency fee cases where the lawyer is likely to be paid well. This is the case of personal injury claims (where there are actual bodily injuries) or employee rights cases because the lawyer can go after the insurance company.
Lawyers don't work for free and can’t stay in business if they accept a bunch of weak cases.
Even some personal injury cases can't be accepted on a contingency basis. For example, let's assume you accept a high-paying job out of state as a drilling engineer at a prestigious oil company. You immediately arrange to move closer to your job and pay for a moving truck, then proceed to terminate your current lease and start packing.
You then hire some guy outside a home improvement store to help you move. Unfortunately, in the process, he accidentally drops a television and breaks your foot. You go to the emergency room, and the doctor tells you that he needs to perform surgery because you require titanium screws. You end up spending three days in the hospital and cannot perform strenuous physical activities for the next six months.
As a result, you can no longer take that succulent job out of state; you lost your deposit on the moving truck AND your deposit at the new apartment out of state. You're also stuck with a $15K bill for the ambulance and other medical-related expenses. Your life is ruined, and you are thirsty for blood; you want revenge.
You consult with half a dozen law firms, and each swiftly rejects your case. Why? Well, who are they going to sue? The home improvement store? The guy you hired on the street? Does he have liability insurance? Does he have any assets? Maybe a few million in the bank? a Ferrari, perhaps he can sell, so he pays for your losses?
You get the point!
Why It's Important To Make Sure Lawyers Are Vetted?
The California State Bar investigates on average, 16,000 complaints of professional misconduct by attorneys annually.
We conduct due diligence by researching and recommending the best local attorney in your area specialized in the type of law related to your legal issue. We verify each attorney is in good standing with the California State Bar and is not under investigation for committing crimes.
Our objective is that you receive the best comprehensive, high-quality legal representation while holding California attorneys to the highest standards of professional conduct.