The Contingency Fee

Madeleine Jones
July 24, 2013

A contingent fee is any fee for services where the fee is payable only if there is a successful outcome.  In the personal injury world, this is how attorneys usually get paid.  Rather than charge an hourly rate that is payable by the client as the services are rendered, a personal injury attorney waits to be paid from the settlement or verdict proceeds of a case.  The contingent fee is normally a percentage of the total money awarded.  While the exact percentage can range from attorney to attorney, in Nevada the typical fee for a personal injury case is 33 1/3% for pre-litigation. Pre-litigation is any work performed on a case prior to filing a civil lawsuit.

Fortunately, most cases settle during the pre-litigation phase, but sometimes a suit must be filed.  In cases where a suit is filed, most attorneys charge a higher percentage for the contingent fee, usually around 40%.  The reasoning is more work is involved once a suit is filed. There is also a third phase of litigation: the appeal stage.  This stage happens only after you receive an unfavorable jury verdict. Most personal injury attorneys will charge anywhere from 45-50% for their contingent fee for this phase of litigation.  Again, the reason being more work is involved at this state of litigation.  When choosing an attorney, make sure you understand what percentage the contingent fee is for each stage of your case. 

Advantages of the Contingency Fee

The contingency fee has two advantages: (1) it provides access to the courts for all persons regardless of income; and (2) it provides no risk to the injured party.  Take the first advantage, most people cannot afford to pay an attorney an hourly rate.  An attorney’s hourly rate can range from $200-$800 an hour; even higher in some cases depending on the experience of the attorney.  While some cases may require more work than others, it does not take long for an hourly rate of $200 to add up, and quickly.  For an attorney billing at $200 an hour, the average attorney fee in a civil lawsuit is $100,000.00, and this is a very conservative estimate.  Obviously, for individuals who are injured and likely missing work due to their injuries, this is not feasible.

With respect to the second advantage, if your case is not successful, you will not owe any money to the attorney.  While this outcome is rare, it is a reality in some cases. Having the contingency fee available as a means of payment allows you to stress about one less thing should your case not succeed.

If you have additional questions or concerns, contact Cogburn Law today at (702) 747-6000