Why Don’t All Lawyers Prefer Contingency Fees?
When you’re ready to hire a lawyer, there’s one thing that will likely come up which may seem puzzling at first, why don’t all lawyers prefer contingency fees? Contingency fees are compensation that a lawyer receives if they take on your case and win it. For example, a contingent commercial litigation lawyer in New York will receive a flat fee for taking your case and a percentage of the damages that they win on your behalf.
The majority of lawyers don’t prefer to practice this way because of the risk associated with it. On a contingency fee basis, if the lawyers lose the case and you aren’t reimbursed, then they can’t collect any fees. This is the main reason that almost all lawyers practice a flat fee arrangement with their clients. However, a lot of clients prefer relying on contingency fees because it removes them from the risk of losing money if their lawyer loses their case.
Here are some reasons why all lawyers don’t prefer contingency fees.
There is a risk that the lawyer will get paid nothing
When a lawyer practices on a contingency basis, they are taking on all the expenses of their client if the case is lost. This means that if the lawyer doesn’t win your case, then they won’t get paid for their time. However, this shouldn’t be a problem because lawyers who charge a contingency fee spend more time in preparation for the case than lawyers who work at an hourly rate.
There is a risk the firm will get paid too much and the client may be frustrated by that
If the contingency fee is high enough, then the lawyer will be paid more than their regular rate. This could end up being a problem for the client if the client is not happy with how much they have to pay for their lawyer’s services. This means that on a contingency basis, there is a risk that the client will try to negotiate down the fee, and then this could lead to conflict between you and your attorney.
The lawyer’s fees are delayed until collected from the opposing party
When you hire a lawyer to take your case on contingency, then the fee is usually paid after a win or a settlement for their services. This means that the lawyer’s fees will only be paid after the settlement of your case.