Understanding the Significance of the Contingency Fee Model

What is a contingency fee?

Lawyers who promote themselves under the umbrella of “no recovery, no fees” are actually telling you that they take cases on a contingency fee. 

In simple terms, a contingency fee arrangement means that legal fees are contingent upon the successful outcome of the case. If the lawyer secures a recovery, whether through a settlement or trial verdict, they are entitled to a fee. If there is no recovery, there is no fee—hence, the popular taglines "no recovery, no fee" or "you don't pay unless we win."

Origins of Contingency Fees

History shows us that the contingency fee model has existed since the formation of the American legal system and mirrors fundamental American values. At its core, this model ensures the system's fairness and that people from all walks of life will have access to the court system regardless of their resources. 

Despite its ultimate goals of accessibility and fairness, the contingency fee model has faced criticism. Detractors allege contingency fees cause a “flood of litigation,” a claim which has largely proven to be untrue. But at the end of the day, even if the number of lawsuits increases, we must ask ourselves, “Do we want a system open to all comers or one whose doors are closed to the vast majority?”

Who offers contingency fee models?

Personal injury lawyers are the ones most likely to offer their clients a contingency fee model. By virtue of what we do- represent everyday people who have been harmed by more powerful and wealthy defendants- this model is paramount to our practice. Our clients cannot afford to take the financial risks that go hand in hand with litigation. We choose to shoulder the burden for our clients so that they can have their day in court and their voices heard.

What purpose does the contingency fee serve?

LPM attorney Russ Brudner summarizes it best, “Most people would not be able to afford to pay a lawyer an hourly fee to prosecute even the simplest civil case. Without contingency fees, most people would be left without access to our civil justice system. Consequently, the importance of the contingency fee model is that it levels the playing field for ordinary people to take on big companies. I would say that it has benefitted every client that we have ever had.”

Of Interest References:

• Stephan Landsman, The History of Contingency and the Contingency of History, 47 DePaul L. Rev. 261 (1998) 
• Peter Karsten, Enabling the Poor to Have Their Day in Court: The Sanctioning of Contingency Fee Contracts, A History to 1940, 47 DEPAUL L. REV. 231, 231 (1998).

For more detailed information, visit our page on the Contingency Fee Model.