My client Cantor, Dolce & Panepinto (www.cldplaw.com)
recently discussed this in a blog post and hope it helps explain
contingent fees to anyone conducting research or considering legal
action:
A contingent fee arrangement is an agreement between an attorney
and a client where the client agrees to pay the attorney a
percentage of any money recovered through a favorable verdict or
settlement. Under a continent fee arrangement, the attorney pays
all the costs and absorbs all the expenses related to pursuing the
lawsuit, including, but not limited to, filing fees; time spent
conducting legal research, drafting and filing motions; negotiating
settlements; preparing and trying the case; and expert witnesses.
If the attorney does not recover any money, then the client does
not owe the attorney anything.
A contingent fee arrangement is a cost-effective way for a
plaintiff to finance a lawsuit. At times it may actually be the
only way to finance a lawsuit because a plaintiff might not
otherwise be able to afford it. After all, litigation can be very
expensive and there are lawful tactics used by defendants and
insurance companies to make the process take longer, thereby
increasing the cost. Contingent fee arrangements are commonplace in
personal injury cases.
Law firms often charge a slightly higher percentage if they have
to take a case to trial than they charge if they are able to
negotiate a settlement.
Source:
http://www.cldplaw.com/2013/07/contingent-fee-agreements-explained/