Contingency fees, as the name implies, are contingent upon the outcome of your case. If you win, you pay your attorney a percentage. If you lose, you pay nothing. The amount of a contingency fee may vary slightly, but it's generally 1/3 of what you recover. If you sue someone and the jury awards you $60,000, your attorney gets $20,000. Contingency fees also apply to amounts received in settlement.
Contingency fees are charged when you're suing for money
If you aren't suing for monetary damages, a contingency fee doesn't make sense. For example, if you're facing criminal charges and hire an attorney to defend you, you will pay hourly. There will be no award of money at the end of your case. On the other hand, if you're suing the other driver after a car accident for medical bills, lost wages, and pain and suffering, you will get money if you win. In this situation, you'll be charged a contingency fee by your attorney.
Contingency fees only charged in "big" cases
The general rule is that contingency fees are charged in cases where the client is seeking monetary damages. However, if the case is small, say $10,000, you might be charged hourly instead. If your case is small, the amount of the attorney's fee if they win would not be enough to compensate them for their time. If you have a case for $9,000, an attorney would get $3,000 for a contingency fee. If they have to spend 30 hours on your case, it won't be worth it to them. If their typical fee is $200 an hour, they could earn $6,000 by charging hourly for those 30 hours. Basically, in a small case, there is still risk, but no reward, from the attorney's perspective. For these cases, an hourly fee is common.
If you are the defendant, you'll pay hourly
Contingency fees are common in personal injury lawsuits, but only if you're the one suing. If you're the defendant, you will pay hourly. The reason is simple: At the end of the case, there is not a monetary award from which the attorney can get paid.
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