You Only Pay If We Win

Many potential clients ask me if we can have an arrangement whereby I will agree to take a percentage of the judgment if we are successful. These arrangements are typically called contingency fee agreements.  These agreements are common and legal in the U.S. and in every province except Ontario.

For years, lawyers have been trying to change the law to allow these arrangements in Ontario.  Some say that it is necessary to ensure access to justice for those that cannot afford to pay a lawyer unless they win.  I think that it is simply a mechanism to get more fees for lawyers.

I don?t think that contingency fees will have any great impact on the way I practice law.  I don?t think that I will suddenly start taking on a large proportion of contingency fee cases with clients. Here?s why:

I don?t think that contingency fee arrangements are good for clients.  Think about it:  The only clients that are helped by it are the ones that lose their cases!  Do you really want to be in that category?

Contingency fees are a gamble for the lawyer.  I am taking a risk that I might lose.  People only take risks when the potential reward is greater.  In other words, I am going to charge a higher fee in exchange for taking on that risk.

I have to assume that I will not win all my cases, so I know that a certain percentage of my work and time will go unrewarded. So, to make the same amount of money in a year, I will have to charge my other files more fees to make up for the files where I didn?t get paid.

The real push for contingency fees is from the lawyers that take on the big cases where, for example, a person has been catastrophically injured in a car accident.  Does that person really want to pay 40% of the judgment in fees under a contingency arrangement or would they rather pay what might be 25% under a normal arrangement?  Remember, those multi-million dollar judgments are to pay for that person?s lifetime care costs and loss of income as a result of the injury.  If they have to give a greater percentage of it to their lawyer, what will that do to their quality of life? 

The client that wins a case and has a contingency fee arrangement does not benefit, because they will invariably pay more in fees.  The other clients of the lawyer pay more in fees to offset the time the lawyer spends on losing cases.  The only person that ?benefits? is the client that loses and doesn?t have to pay their lawyer. 

By the way, if you lose, a contingency fee deal doesn?t mean that you don?t have to pay some costs to the winning party to pay for their lawyer.

I expect that, if continency fee arrangements become legal, not too many of my clients will want to enter into them with me after I explain the ?benefits? to them.