Can the Contingency Fee Structure Work with Business Cases?

Fee structure is an important consideration when going into your own practice. Traditionally, your practice areas dictate how you got paid. Attorneys who work with private individuals typically work with on a contingency basis. Attorneys who work with businesses, on the other hand, generally work on retainers and/or hourly fees.

But there are some attorneys who are taking the contingency approach with corporate clients. Can this fee structure work? Is it even advisable?

A Growing Need

Contrary to popular belief, not all corporations have unlimited sources of wealth. Corporations with limited resources are often forced to endure injustices because they simply cannot afford to counsel. They have no means of seeking compensation, as no win no pay lawyers are far and few between in business law.

There's a growing need for business attorneys who will work on a contingency fee basis. And there may be some advantages to offering this option.

Many business clients are unable to afford legal fees, but they’re generally happy to cover other costs, like those related to depositions, meals and travel. When businesses cover these out-of-pocket costs, attorneys are risking nothing more than their time.

Additionally, business cases are often easy to prove. The damages are often fixed, as contracts are usually fixed. The amounts are justifiable to jurors. If the defendant failed to pay a $200,000 note, awarding $200,000 in damages makes sense. Damages are quantifiable, solid and real.

Commercial cases are usually document cases, which means the key to winning the case is usually buried somewhere in a document. It may not be as glamorous or interesting as other fields of law, but these types of cases tend to be more cut and dried.

Another advantage to working on a contingency fee basis is the lack of competition. While not impossible to find, fewer attorneys are willing to work on contingency with corporations. That leaves more room for brave, risk-taking lawyers to fill the need for them.

The Risks

Of course, there are risks to taking the contingency route with corporate clients. One of those risks is time.

As mentioned previously, business cases are often document cases. Yes, the trail of proof is easier to find, but that trail can be long. Finding the proverbial needle in the haystack can take substantially longer, as there’s more hay to sift through. The answer is in the documents, but the time it will take to get there may be too risky for some attorneys.

Business cases are also typically difficult to settle, although most still do. That may mean having to spend more time in court than, say, a personal injury lawyer.

Ultimately, it’s up to you as an attorney whether you want to work with businesses on a contingency fee basis. While there are drawbacks, there is also a growing need for attorneys that offer this option. If your ultimate goal is to help “the little man,” you may do some good by helping businesses who have no other means to fight against injustices.

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