What is the difference between a legal firm that?
Mr. Christopher asked:
What is the difference between a legal firm that
operates on “contingency” and a legal firm that
operates on a “retainer”?
What is the difference between a legal firm that
operates on “contingency” and a legal firm that
operates on a “retainer”?
March 18th, 2009 at 2:31 am
Contingency is when a law firm agrees to take the risk with the client. If the client wins the case, the law firm will get a percentage of what the client wins. Usually contingency law firms will take actual costs (i.e. paper, filing fees, fax copies, deposition costs, etc.) out of the winnings prior to taking another piece with the percentage. A lot of times, costs are not contingent so the client has to pay for them win or lose.
A retainer is sort of a deposit on fees that a firm might charge. So, if the case might cost $100,000 to take to trial, the attorney will ask for say a $20,000 retainer to start work and will then bill you for the extra work usually on a monthly basis.
March 20th, 2009 at 11:45 pm
If you pay a retainer, it’s like an advance payment for legal fees not yet incurred. It must be put into a trust fund and you must receive an accounting each month until its all spend or the case is over. If there is money left from the retainer, it must be refunded to you. In a contingency fee case, the atty gets no money unless he/she wins the case. Then the lawyer gets a pre-established amount of the money won. One-third is common for a contingency fee. If the lawyer loses he gets nothing in a contingency fee case. A word of caution, however, you are responsible for “costs” regardless of the outcome. “Costs” are things like the court filing fee, the service of process fee or, in other words, fees your lawyer has to pay to someone else.