Contingency Planning for Contingency Fees

more+
less-

Credit market conditions remain extremely tight for all business sectors, including law firms. I recently got a new perspective on this issue from a client who is handling major contingency cases. The cost of funding these cases has gone up so much that he is financially strapped. Contingency fees, of course, are often used in personal injury and collection matters, where the lawyer's fee is a flat percentage of the value recovered for the client. Until there is a recovery, the lawyer has only a cash outflow for handling the case and has to bear all the associated costs.

What costs are we talking about? First is the cost of labor, the attorneys and staff required to handle the case. After all, even without money or fees coming into the firm for the matter, people in the firm expect their salaries to be paid. Also, all the firm's cost of operation continue, such as rent, insurance and all the other items necessary to keep the lights on and doors open. All these costs, one might say, are expected. However, in large contingency fee cases, one defense objective is delay. This can cause the case to drag on, placing even more financial strain on plaintiff's lawyers. The longer the case continues, it's also likely that more expert witnesses will be needed for the plaintiff side to counter defense experts. The cost of this kind of battle can be significant.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ed Poll, LawBiz | Attorney Advertising

Written by:

more+
less-

LawBiz on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×