If you have dealt with a personal injury matter, you probably paid a contingency fee to your lawyer. This fee is contingent on the outcome of the case. You pay your attorney a percentage of the compensation recovered in a settlement or court award, and you pay nothing if the lawyer loses the case.
While the Florida Rules of Professional Conduct generally approve contingency fees, they also prohibit them in two specific situations. Lawyers cannot charge a contingent fee in criminal matters or certain domestic matters. Instead, you will typically pay an hourly or flat fee for these legal services.
What Is A Contingency Fee?
A contingency fee is a billing structure commonly used in personal injury matters. It compensates the lawyer for the outcome they obtain rather than the time spent on the case. In other words, the lawyer earns the same fee for settling a personal matter in one day or three years.
This fee is simply calculated as a percentage of the compensation recovered for the client. Larger settlements and court awards generally produce larger fees.
Some clients believe this fee structure incentivizes the lawyer to fight for larger payouts. However, lawyers have an ethical duty to put their client’s interests before their own. As a result, lawyers must advise clients objectively. Thus, personal injury attorneys must tell clients when they receive reasonably good offers.
However, a contingency fee does have a few other benefits. First, accident victims can hire lawyers without spending money on legal fees. This arrangement allows them to save money for medical and living expenses.
Second, the fee is paid at the end of the case. Thus, a lawyer will start working on the case without any upfront payments.
Finally, lawyers can work on a case without worrying about the client’s ability to pay. If the lawyer produces results, the client will have the resources to pay their legal fees.
What Alternate Billing Arrangements Do Lawyers Use?
Many lawyers do not charge a contingency fee. According to The Florida Bar’s 2022 Economics and Law Office Management Survey, only 9% of law firms use contingency fees as their primary billing structure. Just over 34% accept contingency fee cases, while 66% do not have any contingency fee cases.
The firms that do not take contingency fee cases typically use the following alternate billing structures.
Flat Fee
A flat fee is an agreed amount for a defined project. For example, a lawyer might charge $500 to write a client’s will. Law firms use flat fees for discrete projects with a predictable amount of work. A corporate law firm might charge a flat fee to prepare and file articles of incorporation because the lawyers know how much time the project will require.
Hourly Fee
According to The Florida Bar’s survey, hourly fees are the most common type of fee structure. Lawyers track the time spent on the client’s matter and send periodic bills. The total bill will be the lawyer’s time multiplied by their hourly rate.
Blended Fee
A blended fee combines the other billing structures. For example, a lawyer might charge a flat fee for the first 10 hours worked on a matter, then their normal hourly fee for any time over 10 hours. This gives the client certainty in their legal fees if the project ends quickly while ensuring the lawyer is fairly compensated if it takes longer.
Restrictions On Domestic Matters
The rules specifically prohibit lawyers from charging a contingency fee for matters where the amount of the fee depends on any of the following:
- Securing a divorce
- The amount of alimony or support
- The value of a property division
These restrictions prohibit the use of contingency fee arrangements for most divorce cases. Divorces involve four issues:
- Child custody
- Child support
- Alimony
- Property division
Three of these appear on the list of matters for which lawyers cannot charge contingency fees. The fourth, child custody, would be difficult to split with your lawyer.
This restriction also covers bonus arrangements. Thus, a domestic relations lawyer cannot charge an hourly fee to work on a divorce and then ask for a bonus based on the alimony or property division they obtain.
These are important limits because the lawyer’s financial interest in the outcome might cause them to consciously or subconsciously advise the client against settling their case.
However, family law cases involve much more significant issues than money. The lawyer and their client must also consider long-term family relationships, even if it means receiving less money or property.
The restriction on contingency fees does not apply to collections of amounts due. For example, suppose your ex-spouse owes you $100,000 in past-due alimony. You can arrange with a family lawyer to pay a percentage of any amounts they collect as a legal fee.
Family Law And Contingency Fees
Contingency fee billing in family law matters is extremely complex. Consult a lawyer to learn more about the billing structures used in domestic cases.
Contact an Experienced Orlando Family Law Firm Today
At the Law Office of Paulette Hamilton Divorce Lawyers we can help you navigate the Florida divorce process. Contact our law office today at (407) 420-2311 to talk with an Orlando family law attorney to discuss your case
