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Q: What is a lawyer “contingency fee?”

An attorney’s “contingency,” fee is a fee that is agreed upon prior to the commencement of the attorney’s representation of the client. Typically, these fees vary depending on the complexity of the type of claim being handled. In Maryland, for example, most personal injury lawyers operate on a contingency fee basis such that the lawyer is paid contingent upon recovering money for the client. In these types of cases, lawyers are paid out of the money recovered and it usually a percentage of the total recovery.

Many lawyers advertise the phrase, “No Fee, No Recovery,” however this can be misleading because prospective clients sometimes equivocate the terms “fee” and “costs.” It is important to note that occasionally, a client will be responsible for litigation costs, court costs (filing fees) or other costs, medical expenses incurred, etc. regardless of whether there is a recovery or not. Therefore it is important to discuss with your lawyer whether you will be charged any of these costs, depending on the result of your case.

Depending on what type of insurance coverage’s are available for example, you may or may not be left owing medical expenses if you lose your case and this will depend uniquely on the facts specific to your particular case. You should discuss these fee items with the prospective lawyer before deciding to hire them so there are no misunderstandings down the road.

Additionally, it should also be noted that some lawyers will charge higher fees than others, so it is always a good idea to make sure you are comfortable with the amount of the fee, as well as the experience and reputation of the lawyer who will be handling your case or whatever other factors are most important to you. Sometimes, the fee being charged by the lawyer is commensurate with the difficulty or complexity of the legal matter, the amount of time it will take to handle the legal matter or the experience and reputation of the lawyer.

For further information: Wikipedia has a nice entry on contingency fees.

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