Know The Basics Before You Sign a Contingency Fee Agreement

The contingency fee has been called the "key to the court room" because it allows people of any income level to hire the finest legal talent available. Before entering such an agreement you should know the following essential facts about these agreements in the State of California.

  • The amount of the fee is not set by law. The fee is negotiable.

  • Although the fees are not set by law, some fees may be limited by statute. e.g. In cases involving minors, and in medical negligence cases.

  • Contingency fee agreements must be in writing or they are not enforceable.

  • The fee agreement should set forth that the attorney does not carry errors and omission insurance if he/she is not so covered.

  • The typical contingency fee rate is 33 1/3% if the case settles and 40% is the case proceeds to trial. Some lawyers will charge the higher fee after the case is filed or after the case is merely set for trial.

  • Although you have signed a contingency fee, the client is legally entitled to switch lawyers at any time. If this is done, only one contingency fee is charged to the client. The fee is split between the lawyers involved in the case. The fee is not paid until successful resolution of the claim.

  • Who pays the costs? Costs may include such things as filing fees, deposition costs, investigative costs etc. You should understand what costs the lawyer will be charging for. Some lawyers require the client to pay all costs up front. You should find a lawyer who will advance the costs of suit for you. He will then be reimbursed at the time of the resolution of your case.
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