Sometimes, when you hire an attorney, he or she will not charge you upfront for the services. Instead, the professional will work on a contingency fee plan.
According to Cornell Law School, a contingency fee means a payment the attorney takes from the settlement you get. This type of payment arrangement is most common with personal injury lawsuits.
If you win
If you win, you will agree to give a percentage of the damages the court awards you to your attorney as payment for his or her services. The percentage is something you will negotiate with the lawyer. Common ranges are from 20% to 50%. It really depends on the amount of work in the case and how complex it will be.
If you lose
If you lose your case, the attorney does not make any money. This is part of the overall agreement. It is part of the risk the lawyer takes when working on a contingency basis.
Benefits and disadvantages
Using a contingency fee can be beneficial because it gives your attorney incentive to work especially hard to win your case. It also allows attorneys to only take on cases they believe they can win, which helps reduce frivolous suits making it to court.
Of course, working on contingency could also mean an attorney does not receive payment, which is a huge downside. It could also mean your attorney rushes through the settlement process to receive payment more quickly.
If you decide to do a contingency fee basis with your attorney, you should make sure the agreement is in writing. You also should ensure you understand all the terms, including how much the attorney will get if you win your case.