Contingent Fee Agreements: How A Lawyer Evaluates The Case

Most people are familiar with the concept of a contingent fee agreement with a lawyer. The lawyer gets a percentage of the recovery as a fee and is not paid if there’s no recovery. What most folks are not familiar with are the steps an attorney goes through to determine whether to take a case on a contingent basis.

A contingent fee contract opens the doors to the courthouse for a lot of folks who could not otherwise afford to hire an attorney. The client is willing to pay the lawyer more than she might on an hourly contract because the lawyer is taking a risk – there may be no fee at all. Unfortunately, we have to turn down many more of those cases than we take. While we often take cases with a high risk and high potential reward, we have to stay in business. Let’s discuss the process generally.

The basic formula in a negligence case is pretty simple:
a) Do we represent the good guy?
b) Did the bad guy do the good guy wrong?
c) Are the damages the good guy suffered enough to merit the time and trouble it will take to bring this case to resolution? and
d) If the answers to the three questions above are yes, can we collect a judgment that we get against the bad guy?

As simple as it seems, the reality is that reading these tea leaves is harder than it looks. Specifically, items b) and c) can be awfully difficult to evaluate. Often times, while there are horrible damages, the bad guy’s conduct did not directly cause or contribute to those damages. As for those damages, sometimes they are not caused by the bad guy’s misconduct. An easy example to illustrate negligence is driving a car. The driver of a car has a duty to follow the rules of the road. If he runs a red light, he breaches that duty. If, while running that red light, he hits the driver who had the green light and injures that driver, he is negligent and should be held responsible.

Pretty simple, huh? Let’s change the facts a little. The driver of the car that ran the red light is a state trooper on a high speed chase. Or, the good guy driving through the green light was in another wreck the week before and suffered back and neck injuries in that collision. Or, within a month of the collision, the good guy is diagnosed with a syndrome that doctors believe may or may not be related to trauma – is it caused by this incident? Or, even though the bad guy clearly did wrong, the law gives him an out (for instance, sovereign immunity or the exclusivity of a worker’s compensation award – concepts we will address in future posts). How are all of these issues weighed in relation to the rest of the facts?

Evaluating a case takes experience. We have more than 100 years of collective experience at our firm and believe that we have become pretty good at making these calls. Because we deal in complex cases that are labor intensive, require more staffing and may take longer to resolve than other types of cases, we have a lot of overhead. Often times, we conclude that, while you have a meritorious case, our firm would lose money handling it because of that. When that happens, we make every effort to find the right lawyer to fit your situation.