Many clients wonder what is considered a ìreasonableî contingency fee. A one-third fee is considered fair and reasonable for most cases. While the fee may be higher than one-third, a 50% contingency fee is generally considered to be too high. The reasonableness of a contingency fee depends heavily on your attorneyís cost-risk-reward analysis of your case.
The Attorneyís Cost Analysis
To determine a reasonable contingency fee, the attorney will estimate the costs involved in winning your case. The attorney will try to predict how many hours will be required to win your case, how much research will be involved, and whether the case is likely to settle or go to trial. The attorney may also consider whether taking your case will require the attorney to decline other work.
The Attorneyís Risk Analysis
The attorney will also analyze the risk involved in taking your case. The attorney will look at the merits of your case to determine your chances of success at trial or a in settlement negotiations. To do this, the attorney may focus on any weaknesses in your case, your credibility, the relevant law, and the outcomes of similar cases.
The Attorneyís Reward Analysis
Finally, the attorney will analyze the potential reward involved in taking your case. To do this, the attorney will estimate what your case is worth by predicting the money damages at stake.
The two types of money damages include ìcompensatory damagesî and ìpunitive damages.î Compensatory damages compensate the plaintiff for actual losses, while punitive damages are awarded to punish the defendant. Depending on the circumstances of your case, compensatory damages will usually include recovery for economy loss, including:
-Loss of earnings
-Medical expense
-Property damage
Compensatory damages may also include recovery for non-economic loss, such as:
-Emotional distress
-Pain and suffering
-Loss of consortium
-Defamation
-Disfigurement
Punitive damages are rare. They usually are only awarded where the defendant acted intentionally or egregiously, or the defendantís actions were extremely harmful.
The Attorneyís Determination of a Reasonable Contingency Fee
After balancing the cost, risk, and potential reward involved in taking your case, the attorney will determine a reasonable fee, which may range from 20% to 50%. Generally, a one-third fee is fair and reasonable for most cases. If the fee is higher than one-third, it is likely because the attorney assessed extremely high risks and costs involved in taking your case.
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source http://www.rickzimmer.com/reasonable-contigency-fee/
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