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I ran across an interesting article in the Pittsburgh Post-Gazette where a lawyer was arguing that the contingency fee isn't a very good deal. The basic argument being that if the person is paid on an hourly basis, they would get more money. While I can see that argument in some cases, it doesn't really work overall.

The contingency fee is really the keys to the courthouse for most people. They don't have the money, expecially after a horrible collision, to pay a lawyer up front. They don't have the resources to pay the experts or other associated expenses that accumulate over the time of a case. They also rarely have the experience to know what is the right choice to make in the case.

So they hire a lawyer, and hopefully get one with the experience to handle the case, the track record to get them the right results, and most importantly, the resources to take care of the all of the costs that are needed to make the case the most presentable.

Now if the person does have the resources, then I'm sure you can find someone who would get paid up front, but that would be a case where they have no risk themselves. We take part in the risk when we sign on and expect to get paid and our costs back sometime in the future.

The incentive is to maximize the return and keep the case moving.

What the article really seems to do is to present a cherry picked case and say "look at this very easy one, the lawyer shouldn't have done much, so why should they get paid?" I would look closer at the case.

  • Why didn't the insurance company just pay the limits?
  • Are there health insurance liens or Medicare interests that need to be considered in the settlement?
  • Is this really all the coverage available?
  • Have all of the potential defendants been looked at?
  • How much is the lawyer's experience and abilities playing into the amount being paid?

Each of these answers can give a much better perspective on what is really going on with the case, but the insurance companies have used the argument in this article to keep people away from lawyers, which in most cases usually involves the person getting less or their rights not truly being protected. Because, the insurance company doesn't work for you. When you hire a lawyer who you trust and has the ability and experience, you have someone on your side.


  1. Gravatar for Drake Shunneson

    I read the same article and totally agree with your analysis. As a practical matter, I believe the idea that clients should pay on an hourly basis is fine as an idea, but in practice it would be almost immoral for an attorney to ask for the clients to pay on an hourly basis in most cases. Most clients are living paycheck to paycheck following an injury and cannot work. They don't need an additional financial burden of paying for a lawyer while, simultaneously, paying rent, food, gas, utilities and other necessities.

    Insurance companies have an almost infinite amount of resources by comparison and, thus, if it became widely known that they were fighting everyday people and, if the bottomline is the most important thing as this article suggests, then what would prevent the insurance companies from using that same logic? In this regard, they could litigate these matters to the max, forcing the plaintiffs' attorneys to rack up a huge hourly attorney bill, while also making the attorneys pay for the (on average) $15,000 cost of the case. Soon a 33% fee of 40k on a 100k case could become a bill for 115k from the attorney. Contingency fees have long been supported by the Supreme Courts throughout this nation exactly for the purpose of leveling the playing field works!

  2. Like I said it is the keys to the courthouse for many. Thanks for the comment and stopping by to read.

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