Austin & Round Rock Offices

Contigency Fee Contracts

Most individuals who hire lawyers to represent them in personal injury claims enter into contingency fee contracts with the lawyer. A contingency fee contract means that the lawyer agrees to represent the person and will be compensated by receiving a portion of any recovery. The lawyer is not paid as the case goes along. Generally, the lawyer advances any costs necessary to pursue the injury claim. The client pays nothing until there is a monetary recovery. If there is no monetary recovery to the client, the lawyer does not get paid. Generally, in that circumstance the lawyer also is not reimbursed the expenses he has advanced.

Contingency fee attorney representation contracts allow individuals with little or no money or assets to hire a lawyer, when otherwise they would not be able to do so. Without the ability of the individual to hire a lawyer on a contingency fee basis, the individual would not be able to hire a lawyer. Basically, lack of the finances would mean that the individual would be unable to pursue his claim for monetary damages.

Corporations and insurance companies have plenty of money to hire and pay lawyers on an hourly basis. They can pay the lawyer as he or she does the work - generally their lawyers are paid based on the number of hours that he or she works on the case.

A person severely injured due to an auto collision, unless they are independently wealthy, will be unable to pay a lawyer like a corporation or insurer does. The only way the injured person can hire a lawyer to pursue their injury claim is by hiring the lawyer on a contingency contract.

A benefit of this method of representation is that the lawyer for the injured person will evaluate the chances of success early on during the representation. A lawyer who is only going to be paid if a successful monetary recovery is made will not continue working on a case if the case will not result in a fee proportionate to the work involved in the case.

For example, in a traffic intersection collision case, the lawyer hired by the injured person will have a great incentive to confirm that his client was injured due to the fault of the other driver. If he finds out that his client was the one at fault, the lawyer working on a contingency fee contract will withdraw from the case. This incentive to only take meritorious cases is strong reason to allow lawyers to be retained via a contingency fee contract. (A lawyer paid based on the hours worked on the case, regardless of the outcome, would have the incentive to continue to work on the case.

In summary, contingency fee contracts allow those without financial means to hire lawyers to represent them in pursuit of compensation for damages incurred. Additionally, contingency fee contracts have the desirable incentive of having lawyers refrain from pursuing non-meritorious claims.